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Kandiyohi County OKs candidates for new opportunity zone program

WILLMAR — Three census tracts in Willmar are in the running for designation as opportunity zones under a new federal program to spark economic development in low-income and urban neighborhoods.

The Kandiyohi County Board of Commissioners adopted a resolution Tuesday to forward the list of the three tracts to the governor's office for consideration.

The board's action gets the process started, although it may be months before the nationwide program is ready to be implemented.

It likely will be "at least a year before this rolls out," said Connie Schmoll, business development specialist with the Kandiyohi County and City of Willmar Economic Development Commission.

The opportunity zone program is part of the Tax Cut and Jobs Act of 2017. Local units of government can submit eligible low-income census tracts as candidates for consideration. Governors in each state are then allowed to designate 25 percent of eligible tracts for potential participation in the program, which relies primarily on tax incentives to stimulate business and housing growth.

Of 509 tracts in Minnesota that meet the criteria, Gov. Mark Dayton can choose 128.

Counties have until Thursday to submit their recommendations, so the timeline has been both short and urgent.

"It came on quickly. We have to respond quickly," Schmoll said.

Three census tracts in Kandiyohi County meet the guidelines. In a hasty meeting earlier this week, a panel of city, county, EDC, Housing and Redevelopment Authority and Mid-Minnesota Development Commission representatives reviewed the candidates and ranked them by priority.

At the top of their list is the census tract that includes downtown Willmar.

Second on the priority list is a sprawling tract that includes the north side of Willmar and stretches east to encompass the MinnWest Technology Campus.

Both tracts have potential for commercial and housing development.

The third choice lies along South First Street from Kandiyohi Avenue to 24th Street Southwest. It's seen as ripe for more commercial and retail development.

The County Commissioners were supportive Tuesday of the priority list and a chance at some tax incentives that could create jobs and expand the tax base.

"If we don't apply for it, we could miss out on an opportunity," Commissioner Steve Ahmann said.

But there seemed to be more questions than answers about the new program, especially about the eligibility criteria.

No other census tracts outside the city of Willmar qualified as "distressed," leading some of the commissioners to wonder whether the program will end up favoring some communities at the expense of others.

"It seems a little lopsided here," Commissioner Roger Imdieke said.

Many of Kandiyohi County's smaller towns could benefit from a tool that spurs long-term investment in business development and housing but they don't meet the opportunity zone guidelines, he said. "You're going to have a lot of small towns that are going to have a lot of needs that won't have the opportunity this can provide."

Schmoll agreed there are still many unanswered questions about the details of the opportunity zone program. But by submitting its recommendations to the governor, Kandiyohi County can position itself for a chance at being selected, she said. "We want to include what we can."

Anne Polta

Anne Polta covers health care, business/economic development and general assignment. Her HealthBeat blog can be found at Follow her on Twitter at @AnnePolta.

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