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Staff recommends nominating downtown for Opportunity Zone 2.0; council voices displacement concerns
Summary
With state nominations due June 21, staff recommended Asheville nominate the downtown census tract for Opportunity Zone 2.0, noting the program is now permanent and the income threshold dropped to 70% AMI. Council questioned displacement risks, prior OZ-funded projects, and asked for more data before final direction.
City economic development staff asked the City Council on June 18 for feedback on proposed Opportunity Zone 2.0 nominations and recommended submitting the downtown census tract to the state for consideration.
Rachel Taylor, economic development division manager, told council the federal program was renewed in 2025 and is effectively permanent, allows remapping every 10 years, and has lowered the income threshold for eligibility from 80% AMI to 70% AMI. She underscored a compressed timeline: "we're seeking feedback on these recommendations that were provided to the city manager for state nominations, which are due this Sunday, June 21st," Taylor said.
Staff framed the choice as a trade-off. Opportunity Zones add a private-investment tax incentive that can support infill and redevelopment, but staff and council repeatedly warned that the tool has been used heavily for market-rate projects in other places and could heighten displacement pressure in vulnerable neighborhoods. Council members asked for evidence of how often OZ financing was actually used in Asheville projects and for examples; staff cited projects developers attributed to OZ financing, including the Duke site and an Artful Way project, noting some were market-rate.
"This program sort of has that inherent opportunity and high-risk for these areas," Taylor said, explaining staff’s conservative approach given limited time for community engagement. Staff presented seven eligible tracts under 2.0 and recommended nominating one (downtown) while teeing up two others for council consideration; four tracts were not recommended pending more study.
Council debate focused on three issues: the speed of the federal timeline (staff said state nominations are due June 21), the risk that OZ designation might accelerate displacement in legacy neighborhoods (East End, Burton Street, Shiloh, Oakley), and the fact that if the city declines to nominate tracts, the state or other stakeholders could still propose nominations. "If we don't submit anything, we will have no Opportunity Zones in Asheville under 2.0," staff clarified; staff also noted the state may convene local governments to refine nominations.
Several council members said they were inclined to support the downtown nomination because it aligns with adopted plans and has infrastructure for higher density, but they expressed reservations about nominating tracts that overlap sensitive legacy neighborhoods without more analysis and community engagement. One council member said they were "hesitant to remove any zones if we didn't have any negative impact" while another said they would not support the more vulnerable tracts given the risk to residents.
Next steps: staff said they will complete the state nomination form by the June 21 deadline if council wants staff to submit downtown and follow up with more analysis about past OZ use, displacement risk, and how OZ financing might interact with the city's anti-displacement tools and the upcoming UDO rewrite. No formal nomination decision or vote was taken at the briefing.
Provenance: staff presentation and council discussion on June 18 (Rachel Taylor and multiple council members).
