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Opportunity Zone 2.0 Application SubmissionCity of Dubuque City Council ACTION ITEMS # 4. Copyrighted August 3, 2026 ITEM TITLE: Opportunity Zone 2.0 Application Submission SUMMARY: City Manager recommending City Council approval for submission of an application for Opportunity Zone 2.0 designation through the Opportunity Iowa program, administered by the Iowa Economic Development Authority (IEDA). SUGGUESTED Receive and File; Approve DISPOSITION: ATTACHMENTS: 1. MVM Memo Opportunity Zone 2_0 Application Submission 2. Staff Memo 3. Application Narrative 4. DI Support Letter 5. CFGD Support letter 6. Proposed Opportunity Zones Map 7. GDDC Support letter Page 1257 of 1281 THE CITY OF DUBE Masterpiece on the Mississippi TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Opportunity Zone 2.0 Application Submission DATE: July 29, 2026 Dubuque AI WIN av 2007-2012.2013 2017*2019 Economic Development Director Jill Connors is recommending City Council approval for submission of an application for Opportunity Zone 2.0 designation through the Opportunity Iowa program, administered by the Iowa Economic Development Authority (IEDA). The application was submitted online using the attached narrative, and support letters from key community partners were emailed directly to IEDA staff. This application represents the first designation opportunity under the recently enacted federal Opportunity Zone 2.0 legislation. While Dubuque previously received Opportunity Zone designations under the Tax Cuts and Jobs Act of 2017, all prior designations expired under the new federal law, requiring states to undertake a new designation process. I concur with the recommendation and respectfully request Mayor and City Council approval. Mic ael C. Van Milligen MCVM:sv Attachment cc: Crenna Brumwell, City Attorney Cori Burbach, Assistant City Manager Jill Connors, Economic Development Director Page 1258 of 1281 Dubuque Economic Development Department THE CITY OF 1300 (wain street All-AM111094 Dubuque, Iowa 52001-4763 UB E vxxwi Office (563) 589-4393 1 I I TTY (563) 690-6678 I® http://www.cityofdubuque.org 2007-2012*2013 Masterpiece on the Mississippi 2017*2019 TO: Michael C. Van Milligen, City Manager FROM: Jill M. Connors, Economic Development Director SUBJECT: Opportunity Zone 2.0 Application Submission DATE: July 29, 2026 INTRODUCTION This memo recommends City Council approval for submission of an application for Opportunity Zone 2.0 designation through the Opportunity Iowa program, administered by the Iowa Economic Development Authority (IEDA). The application was submitted online using the attached narrative, and support letters from key community partners were emailed directly to IEDA staff. This application represents the first designation opportunity under the recently enacted federal Opportunity Zone 2.0 legislation. While Dubuque previously received Opportunity Zone designations under the Tax Cuts and Jobs Act of 2017, all prior designations expired under the new federal law, requiring states to undertake a new designation process. BACKGROUND Opportunity Zones were originally established through the federal Tax Cuts and Jobs Act of 2017 to encourage long-term private investment in economically distressed communities through federal capital gains tax incentives. Following enactment of the legislation, Iowa nominated Opportunity Zones in 2018, and the City of Dubuque successfully received designation for several census tracts Congress recently enacted Opportunity Zone 2.0, creating a new program with updated eligibility requirements and requiring every state to submit a new set of designated census tracts. Previous designations do not automatically carry forward, making a new application necessary. Page 1259 of 1281 The Iowa Economic Development Authority (IEDA), through Opportunity Iowa, established a competitive statewide application process to identify recommended census tracts for designation. Applications required substantial documentation demonstrating economic distress, redevelopment readiness, community support, and a pipeline of investment -ready projects. DISCUSSION Preparation of the application required extensive collaboration among City staff, Greater Dubuque Development Corporation (GDDC), and private -sector. The team evaluated eligible census tracts, identified redevelopment opportunities expected to move forward beginning in 2027, documented redevelopment barriers, and secured letters of support from key community partners. Particular emphasis was placed on identifying projects that meet the objectives of Opportunity Zone 2.0 by demonstrating near -term investment potential, significant private capital leverage, housing production, job creation, and catalytic redevelopment opportunities. The City's application narrative outlines a vision for transforming legacy industrial districts into vibrant mixed -use neighborhoods, providing housing, employment, neighborhood - serving businesses, recreation, and public amenities. The areas specifically requested/prioritized for designation are Census Tracts 1.00 and 5.00. Census Tract 7.02 was submitted as a secondary priority. Census Tracts 1.00 and 5.00 were identified as the City's highest priorities because they contain a significant concentration of redevelopment opportunities with the greatest potential to leverage private investment while advancing long-standing community redevelopment goals. Census Tract 7.02 was submitted as the City's secondary priority should additional designations become available. These areas have long served as Dubuque's industrial backbone but continue to face redevelopment barriers, including brownfield conditions, environmental uncertainty, underutilized land, rising construction costs, and financing gaps. The application documents a substantial pipeline of redevelopment projects anticipated to begin construction on or after January 1, 2027. Collectively, these projects represent hundreds of millions of dollars in potential private investment across mixed -use development, housing, commercial redevelopment, health care, hospitality, industrial expansion, and adaptive reuse. The availability of Opportunity Zone designation is F, Page 1260 of 1281 expected to strengthen project feasibility by attracting additional equity investment to developments that continue to face challenging financing conditions. Support letters were provided by: • Greater Dubuque Development Corporation (GDDC), emphasizing the economic need and investment opportunity in Census Tracts 1.00 and 5.00. • Community Foundation of Greater Dubuque (CFGD), highlighting the importance of flexible and catalytic capital for redevelopment and community benefit • Dubuque Initiatives (DI), underscoring the need for patient investment and the readiness of these neighborhoods for transformative projects. All letters strongly support the City's application and encourage favorable consideration by the State. These organizations were selected because of their direct involvement in economic development, community investment, and redevelopment financing within the proposed Opportunity Zone areas. Their letters collectively demonstrate broad community support and reinforce the readiness of these census tracts for additional private investment. RECOMMENDATION I respectfully request approval for submission of an application for Opportunity Zone 2.0 designation through the Opportunity Iowa program, administered by the Iowa Economic Development Authority (IEDA). Staff will continue to coordinate with IEDA throughout the review process and to update the City Council regarding designation decisions and any subsequent implementation activities. 3 Page 1261 of 1281 What is the vision for the top priority census tract(s), and how will having an Opportunity Zone assist in realizing that vision? The City of Dubuque envisions a future in which its legacy industrial districts become vibrant mixed -use neighborhoods that provide housing, employment opportunities, neighborhood -serving businesses, recreation, and public amenities while strengthening the community's connection to the Mississippi River. The priority census tracts encompass the North Port, South Port, and Washington Neighborhood —areas that have long served as the city's industrial backbone but continue to contain vacant, underutilized, and environmentally challenged properties that limit private investment. Over the past three decades, Dubuque has demonstrated that strategic public investment can transform underutilized and environmentally challenged properties into thriving community assets. Building on that success, the City is advancing a pipeline of redevelopment opportunities that will expand housing choices, support commercial and hospitality development, strengthen health care services, improve public infrastructure, and create quality employment opportunities. The recent award of a $500,000 EPA Brownfields Community -Wide Assessment Grant positions the City to accelerate this vision by funding environmental assessments, cleanup planning, and redevelopment strategies for priority sites. These activities will reduce environmental uncertainty, improve site readiness, and provide developers and investors with the information needed to move projects from concept to construction. Opportunity Zone designation would provide another critical tool for financing projects that remain challenging despite strong market potential. When combined with environmental assessment, strategic public investment, and private capital, the designation can help close financing gaps, accelerate redevelopment, and transform long -underutilized properties into productive assets that expand the local tax base, increase housing and employment opportunities, and strengthen the long-term economic vitality of these neighborhoods. Dubuque has repeatedly demonstrated its ability to transform challenging sites into productive community assets, and Opportunity Zone designation will help extend that success to future redevelopment opportunities. Describe any economic hardships the top priority census tract(s) has faced over the last 5 years. Page 1262 of 1281 Many of the City's most significant brownfield sites are located within these census tracts, where decades of manufacturing, rail activity, petroleum storage, utility operations, and other industrial uses have left vacant and underutilized properties burdened by real or perceived environmental contamination. The resulting uncertainty increases redevelopment costs, limits access to conventional financing and discourages private investment. During the past five years, these longstanding challenges have been compounded by rising construction costs, higher interest rates, supply chain disruptions, and increased financing costs that have made complex redevelopment projects more difficult to complete. Properties requiring environmental investigation have been particularly affected because developers must absorb both market uncertainty and potential remediation costs before redevelopment can begin. As a result, otherwise viable redevelopment projects frequently experience financing gaps that cannot be bridged through conventional lending alone. The priority census tracts also continue to experience socioeconomic challenges, including household incomes that remain below state and national averages and poverty rates that exceed national averages in portions of the project area. These conditions reduce market demand, limit private -sector willingness to assume redevelopment risk, and reinforce the need for strategic public investment to catalyze private development. Despite these challenges, Dubuque has continued to invest in planning and infrastructure that position these neighborhoods for revitalization. Most recently, the City secured a $500,000 EPA Brownfields Community -Wide Assessment Grant to evaluate priority redevelopment sites within these census tracts. By reducing environmental uncertainty and preparing sites for reuse, the grant will help remove one of the most significant barriers to redevelopment. Opportunity Zone investment would complement these public investments by providing an additional source of patient capital for projects that face higher redevelopment costs because of environmental conditions, site preparation needs, or adaptive reuse challenges. Do you have any development projects proposed for the census tract(s) over the next 10 years? Note: only projects with construction starting on or after January 1, 2027, are eligible. Page 1263 of 1281 The City of Dubuque has identified a strong pipeline of redevelopment opportunities within its priority Opportunity Zone census tracts that are expected to begin construction on or after January 1, 2027. These projects represent a mix of housing, commercial, health care, hospitality, industrial redevelopment, and adaptive reuse initiatives that are well positioned to leverage Opportunity Zone investment in combination with local, state, and federal resources. In each of the following potential projects there are cost challenges to moving the project toward financial feasibility. Moving these projects forward has the potential to transform our downtown and whole community— essential to growing our population. (Census Tract 1) South Port —This area has been the subject of multiple brownfields assessment, planning, and cleanup activities of both private and public properties, using EPA brownfields grant proceeds. A major private property owner is currently working with consultants to prepare for the redevelopment of several buildings and parcels in the NE portion of the area to create a mixed -use area including multi -residential, commercial and retail offerings. Redevelopment expected to begin in 2027. Bridge Lofts — The property owner has begun design of a $45 million mixed -use building at the gateway to the City from Illinois, to include 94 apartments as well as commercial and retail space. Opportunity Zone investment could help close the remaining financing gap and advance the project toward construction. North Port — The City has already invested in infrastructure improvements and environmental due diligence that have reduced redevelopment risk and positioned the district for continued private investment. With one hotel currently undergoing a $9 million remodel and another $18 million hotel project scheduled to begin construction in the fall of 2026— and with more than 10 acres of land suitable for development in the area —we expect additional development in the coming years. A developer has made an offer on a vacant office building with the intention of creating for -sale condos. And we expect a variety of additional projects to fill the open areas of the North Port in the near future. New developments will spur additional activity at existing facilities such as the Grand River Conference Center, Diamond Jo Casino, and the National Mississippi River Museum and Aquarium. Medical College Campus —The transformation of an existing office building into a facilitythat will accommodate the first new medical college to open in over a century is currently underway. However, we anticipate an expansion of the campus in the downtown area, as the college grows its programs. Page 1264 of 1281 Historic Federal Building — This building is currently comprised of the United States Post Office; office space for several public and private lessees, as well as the City's Housing Department; and City Council chambers. Multiple developers have expressed interest in adaptive reuse opportunities such as multi -residential use or a boutique hotel, demonstrating market demand once financing and redevelopment challenges can be addressed. Its proximity to the Medical College would likely ensure success for either use. Wilmac Building— Located in the Historic Millwork District, this vacant former warehouse is currently held by a local developer/construction company which plans to undertake a $25 million redevelopment of the property, creating 126 apartments and with the intention to include community benefit space that would provide commercial/office space for nonprofit organization(s). Millwork Flats —Also located in the Historic Millwork District, the property owner is working to close the $17 million project's financing gap to create at least 62 apartments and first floor commercial space. ImOn Ice Expansion — Chaplain Schmitt Island along the Mississippi River boasts several economic engines such as the Q Casino, two hotels, a new amphitheater, baseball fields, restaurants, a marina, and an ice rink. This is the result of recent investments of over $71 million from the public sector and over $83 million in private dollars. Based on the rink's demand exceeding available capacity, and given the popularity of hockey in the community, there has been serious conversation about adding another sheet of ice to accommodate this demand. We would anticipate a $10 million investment to bring this to reality. Pack Site — This 35-acre site is privately held and is ripe for redevelopment. At the gateway to Dubuque from Wisconsin and existing utilities adjacent to the site, it has been considered by several potential projects over the past 10 years. With the nearby improvements on Chaplain Schmitt Island, such as a new amphitheater and a new high -end hotel, we expect complementary uses to locate on this property. Crescent Health / Washington Neighborhood — The Greater Dubuque Impact Investment Fund has recently purchased a brownfield site (former scrap yard) which, when redeveloped, is intended to provide expansion space for the nearby federally -funded Crescent Community Health Center. The site has taken advantage of several EPA brownfields cleanup grants, as well as funds from an EPA revolving loan fund, and requesting targeted brownfield assistance dollars from the EPA — with continuing environmental challenges which make this property difficult to fund and finance. The City and several non-profit organizations are committed to a collective effort involving multiple stakeholders to bring this property back to its best and highest use in this census tract. Page 1265 of 1281 (Census Tract 5) Five Points — For nearly a decade the City has worked to identify a private developer to undertake a project at this location. Adjacent to a $200 million stormwater flood mitigation project, it has the potential to serve the residents of this census tract, as well as residents from across the community who come to the area to enjoy the linear park that was created as part of the flood mitigation project. Privately -held property across the street is being considered for redevelopment by the owner, with several potential project ideas already having been shared with City staff. Dubuque Malting — This property, which holds historic and sentimental value for the residents of this census tract, as well as residents across the community, has fallen into disrepair over the years. Portions of the buildings have been demolished due to their condition. The neighbors have long requested the redevelopment of this former brewing and malting facility, but without additional funding/financing opportunities, the project is not economically viable. Page 1266 of 1281 DUBGQUE INITIATIVES July 28, 2026 To Whom It May Concern: On behalf of Dubuque Initiatives, I am pleased to offer our strong support for the City of Dubuque's application for Opportunity Zone 2.0 designation for its priority downtown census tracts. Dubuque Initiatives was created to advance transformative redevelopment projects that strengthen neighborhoods, improve quality of life, and generate lasting community benefit. Our organization has made significant investments within these census tracts and understands firsthand both the opportunities they present and the financial challenges that continue to limit redevelopment of former industrial and brownfield properties. Through our work, we have seen that many of these sites possess exceptional redevelopment potential but require complex capital stacks and patient investment to overcome environmental conditions, site preparation costs, and financing gaps. While the City has made substantial investments in infrastructure, environmental assessment, and redevelopment planning, additional private investment tools remain essential to bringing many projects to fruition. Opportunity Zone designation would provide an important financing resource that complements these existing public investments. It would strengthen the ability of organizations like ours, along with private developers and community partners, to attract long-term investment for projects that create housing, expand access to healthcare, stimulate commercial activity, and return underutilized properties to productive use. Our experience demonstrates that these neighborhoods are ready for investment. With strategic public leadership already in place and a strong pipeline of redevelopment opportunities, Opportunity Zone designation would help accelerate projects that might otherwise remain financially out of reach, creating lasting economic and community benefits for Dubuque residents. For these reasons, Dubuque Initiatives enthusiastically supports the City of Dubuque's Opportunity Zone 2.0 application and respectfully encourages favorable consideration of this request. Sincerely, Page 1267 of 1281 Kzv_-'� C� 0 Kevin Lynch Dubuque Initiatives, President (563) 582-2655 kIVnch net-smart.net Page 1268 of 1281 Community Foundation OF GREATER DUBUQUE July 22, 2026 To Whom It May Concern: 700 Locust St., Suite 195, Dubuque, IA 52001 563.588.2700 1 dbgfoundation.org On behalf of the Community Foundation of Greater Dubuque, I am pleased to express our support for the City of Dubuque's application for Opportunity Zone 2.0 designation for its priority downtown census tracts. The Community Foundation of Greater Dubuque supports efforts that strengthen communities through redevelopment, expanded opportunity, and long term economic vitality. The City's vision for these tracts to transform legacy industrial areas and underutilized properties into vibrant mixed use neighborhoods with housing, employment opportunities, neighborhood serving businesses, healthcare expansion, public amenities, and stronger connections to the riverfront is both compelling and aligned with the kind of community building work that creates lasting regional benefit. These priority census tracts continue to face significant redevelopment barriers, including brownfield conditions, environmental uncertainty, underutilized land, rising construction costs, and financing gaps that limit private investment. Opportunity Zone designation would provide an important additional tool to help close those gaps, complement existing public investments, and attract the patient capital needed to move complex projects from concept to construction. Through the Community Foundation's work, including the NEI Impact Investment Fund, we recognize the importance of flexible and catalytic capital in helping community serving and redevelopment projects advance where conventional financing alone may not be sufficient. We see this designation as complementary to those efforts and as another way to strengthen the broader toolbox available to the community. We believe this designation would help advance projects that expand housing, strengthen community health, improve public infrastructure, and create employment and investment opportunities in areas that have long faced economic and environmental challenges. For these reasons, the Community Foundation of Greater Dubuque strongly supports the City's request and appreciates your consideration. Please do not hesitate to reach out if additional information would be helpful. Respectfully, VG`l-fl/ Nancy Van Milligen President and CEO Community Foundation of Greater Dubuque Our Mission: Strengthen communities and inspire giving. Page 1269 of 1281 c IWILI I 111] 9:111 A HUI I Fail Dodge St aooe Tract 1 East Dubuque Wiscons THE CITY OF DUB t b UE— Masterpiece on the Mississippi omit Development\Opportunity Zpogby �or�tt Nfftlmx July 20, 2026 To Whom It May Concern: On behalf of the Greater Dubuque Development Corporation and the greater Dubuque community, we are pleased to submit our Census tract recommendations to Governor Kim Reynolds for Opportunity Zone 2.o designation. Based on the program's criteria, we understand the following Census tracts are currently eligible: Census Tract 1.00 Census Tract 5.00 Census Tract 7.02 The first two are active Opportunity Zones under the existing program. Their current economic profiles are as follows: Census Tract i.00 • Percent of People in Poverty: 13.89% • Percent of Area Median Income: 56.o1% Census Tract 5.00 • Percent of People in Poverty: 34.26 • Percent of Area Median Income: 43.58% We convened a group of 20 private developers alongside City of Dubuque City Manager and Economic Development staff. All participants concurred that the two current Opportunity Zone tracts represent the greatest economic need and investment opportunity for our community, with Census Tract too as the top priority. While we would welcome designation for all three tracts, we recognize that the new program rules result in fewer approved zones. Our primary ask is that Census Tracts 1.00 and 5.00 receive Opportunity Zone 2.o designation. Please do not hesitate to reach out if we can provide additional information or assistance. Respectfully, Jason E. White, President and CEO Greater Dubuque Development Corporation Page 1271 of 1281