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DeSoto staff to recommend three census tracts for Opportunity Zones 2.0; council presses for community benefits
Summary
Economic development staff said they will submit recommendations for three eligible census tracts under the federal Opportunity Zones 2.0 rules and described potential capital-gains tax incentives; council members pushed for accountability, job requirements and transparency about targeted industries.
Economic development presenter Josh McKea told the DeSoto City Council that the city plans to submit recommendations for three eligible census tracts under the updated federal Opportunity Zones program, which staff said must be turned in to the governor’s office before the state deadline.
"Opportunity Zones is a program that was enacted by federal legislation with the intent to attract investment to some low income distressed census tracts throughout the U.S.," McKea said, explaining that revised 2025 rules require previously contiguous tracts to be submitted as separate recommendations. He identified the tracts under consideration as 166.19, 166.10 (which includes the Kroger shopping center on Pleasant Run), and 166.35 (noted as the most distressed of the three). McKea said investments in approved tracts could qualify for capital-gains tax benefits and that the governor and federal reviewers will make the final determinations.
Council members repeatedly asked how the city would ensure community benefits from investors taking advantage of the tax incentive. Councilwoman Leticia Hughes pushed staff on accountability and transparency, asking whether the application process or subsequent agreements could require job creation or other measurable community returns rather than merely offering tax advantages to outside investors. "What does that look like?" Hughes asked, pressing for examples of measurable commitments.
City Manager Majid Delgafri and McKea said the designation is an overlay that does not change local land-use control and that the city can use performance agreements, targeted industry recommendations and master planning to steer investments toward desired outcomes. Delgafri added staff can pursue grants, philanthropic support and formal letters of support to strengthen the city’s case to the governor’s office. Council members asked staff to return with specific ideas for performance terms and a communications plan so residents can track how the tool is used.
The council did not act on the recommendation at the meeting; staff said they would submit the recommendations before the state deadline and return with follow-up material on targeted industries, potential performance agreements, and outreach plans.
