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Council and staff discuss incentive thresholds, targeted tools and Opportunity Zones 2.0
Summary
Staff and council discussed where to target incentives, typical thresholds (15-20%) used in economic-development packages, the need to be performance-based, and the city's role in Opportunity Zones 2.0 (the city suggests census tracts but investors work with federal rules; OZ 2.0 begins 2027-01-01).
City staff framed incentives as a balancing act between attracting investment and protecting taxpayer dollars, urging targeted use of tools and performance-based agreements. Staff said historically a 15% to 20% economic-development package has been typical in peer communities, though some projects now seek low-20% packages or higher because construction costs have risen.
On Opportunity Zones, Skenel explained that the city can identify candidate census tracts for the regional council and governor but that the federal program functions between investors and the federal government. He said the first iteration of Opportunity Zones is sunsetting and Opportunity Zones 2.0 begins Jan. 1, 2027. Council members raised housing as a key target area and discussed whether incentives should be opened to more small and medium-sized projects.
