Letter to Iowa Federal Legislators regarding Opportunity ZonesCity of Dubuque
City Council Meeting
ITEM TITLE
SUMMARY:
SUGGESTED
DISPOSITION:
Copyrighted
July 19, 2021
Consent Items # 6.
Letter to Iowa Federal Legislators regarding Opportunity Zones
City Manager providing a copy of a letter to be sent to Iowa Federal
Legislators regarding the Opportunity Zone program.
Suggested Disposition: Receive and File
ATTACHMENTS:
Description Type
Opportunity Zone Letter Supporting Documentation
THE CITY OF
DUTBQTE
Masterpiece on the Mississippi
Dubuque
City Manager's Office
City Hall
All AnErip C11J
50 West 13th Street
Dubuque, IA 52001-4845
1
Office (563) 589-4110
Fax (563) 589-4149
TTY (563) 690-6678
2007-2012.2013
ctymgr@cityofdubuque.org
2017 * 2019
www.cityofdubuque.org
July 8, 2021
«CompleteOFFICIALName_Address»
Dear «Title» «Last»,
When the Opportunity Zone legislation was first passed in 2017, one of its stated
purposes was to elevate the visibility of neighborhoods and deals that investors might
not have considered otherwise. As a small metro in the Midwest that traditionally has
not seen a lot of outside investment interest, this sounded like just the ticket. We
worked quickly to qualify our low-income census tracks under the legislation and
developed information on exciting local projects for investors. While one project is
moving through the design phase there has been little interest from developers and
investors.
As shown by many studies, the Opportunity Zone projects and incentives have flowed
disproportionately to large metropolitan areas and disproportionately to real estate
development with little or no local job creation. There also appears to be a sort of "red-
lining" occurring, where only communities that can support an above market rate of
return are considered for Opportunity Zone investment. Unfortunately, Dubuque, and I
venture to guess the rest of Iowa, does not appear to be well positioned under any of
those criteria.
As we work to recover from the negative impacts of the recent Covid pandemic we
thought it might be an appropriate time to seek your advice and assistance in making
this Federal tool more relevant to communities like Dubuque. There are two
adjustments to the Opportunity Zone program that we would like to see considered.
First, require that Opportunity Zone Funds and Investments must include a minimum
percentage of projects or dollars in communities under 250,000 in population. This
would certainly help Dubuque and the overall premise of the Opportunity Zone
legislation to elevate the visibility of deals that investors might not have considered
otherwise.
Second, for communities under 250,000 broaden who can invest. Because only a
limited number of (mostly wealthy) taxpayers have capital gains, limiting OZ incentives
to capital gains holders freezes out most stakeholders in low-income or lower -return
communities from investing in their own revitalization. A refundable tax credit, rather
than a capital gains exclusion, could open up opportunities for these investors.
«Title» «First» «Last»
July 8, 2021
Page 2
There may certainly be other ways to change the Opportunity Zone program to
accomplish better outcomes for communities like Dubuque (and states like Iowa). We
would love to hear your thoughts and suggestions.
Sincerely,
Michael C. Van Milligen
City Manager
MCVM:as
The Honorable Joni Ernst
United States Senate
111 Russell Senate Office Building
Washington, DC 20510
The Honorable Charles Grassley
United States Senate
135 Hart Senate Office Building
Washington, DC 20510-1501
The Honorable Ashley Hinson
House of Representatives
1429 Longworth House Office Building
Washington, DC 20515