SUBJECT/RECOMMENDATION:
Title
Informational Update on Opportunity Zone 2.0 Redesignation and Nomination Submission for Census Tracts 258, 262, 264.01, and 264.0
Body
SUMMARY:
Staff is providing an informational update regarding the submission of Census Tracts 258, 262, 264.01, and 264.02 to Florida Commerce and the Governor’s Office for consideration as designated Opportunity Zones under the federal Opportunity Zone Program.
This presentation to City Council provides:
• An overview of the Opportunity Zone Program.
• Identification of the nominated census tracts submitted to Florida Commerce.
• A summary of the nomination process and timeline.
• Potential opportunities and considerations associated with designation; and
• Next steps pending state review and determination.
Opportunity Zones are a federal economic development tool intended to encourage long-term private investment in economically distressed communities through targeted capital gains tax incentives. The nominated census tracts were identified based on qualifying economic indicators, redevelopment potential, infrastructure access, and alignment with broader economic development objectives and planning considerations within the City of Clearwater.
The city currently has an existing Qualified Opportunity Zone designation that includes portions of Downtown Clearwater within Census Tracts 259.01 and 259.02. These areas were designated under the original federal Opportunity Zone framework established through the Tax Cuts and Jobs Act of 2017, which was initially introduced as a temporary federal economic development initiative intended to stimulate long-term private investment in economically distressed communities.
Historically, the original Opportunity Zone program experienced varying levels of utilization nationwide. In many communities, including portions of Clearwater, the program was underutilized due to evolving federal guidance, limited investor familiarity, market uncertainty, and the temporary nature of the original designation structure. While several redevelopment and investment projects have occurred within the City’s existing Opportunity Zone area, the current Opportunity Zone 1.0 designation will transition out under the original federal framework and was not included within the City’s Opportunity Zone 2.0 nomination package due to updated federal eligibility requirements.
Changes in economic conditions, private investment activity, redevelopment patterns, and updated U.S. Census Bureau demographic data resulted in the existing Downtown Clearwater Opportunity Zone census tracts no longer qualifying under the revised federal criteria established for redesignation consideration.
In 2025, the One Big Beautiful Bill Act (Public Law No. 119-21) made the Opportunity Zone Program a permanent part of the federal tax code. As part of the updated implementation framework, states and local governments are now required to reevaluate and redesignate qualifying census tracts using revised federal eligibility standards and updated census-based economic indicators to continue participation in the program.
As a result, communities throughout Florida are currently competing for designation recommendations through a state review process administered by Florida Commerce and the Governor’s Office. Given the increasing level of redevelopment and private investment interest occurring throughout Clearwater, maintaining Opportunity Zone eligibility is viewed as an important economic development tool that may assist the City in remaining competitive for future investment opportunities.
Failure to secure redesignation could place Clearwater at a disadvantage relative to other Florida communities seeking to attract private capital, redevelopment activity, housing investment, infrastructure funding, and business expansion opportunities associated with Opportunity Zone investment incentives.
The nominations were submitted within the timeline established by the State of Florida for consideration. City Council was previously informed of the nomination effort prior to submission. Due to the limited timeframe associated with the state nomination process and the preliminary nature of the designation request, formal community outreach was not conducted prior to submission.
At this stage, the nomination represents an eligibility and consideration process only and does not authorize specific development projects, zoning changes, financial incentives, or financial commitments by the City. Should any of the nominated census tracts receive designation approval, future project-level planning, redevelopment discussions, and investment initiatives would include opportunities for community and stakeholder engagement.
Recommended Action
No formal action, the presentation is informational and will allow the Council to provide feedback and direction, if any, regarding future community engagement and Opportunity Zone planning efforts.
APPROPRIATION CODE AND AMOUNT:
N/A
USE OF RESERVE FUNDS:
N/A
STRATEGIC PRIORITY:
Objective 2.1: Strengthen public-private initiatives that attract, develop, and retain diversified business sectors.
Objective 2.2: Cultivate a business climate that welcomes entrepreneurship, inspires local investment, supports eco-friendly enterprises, and encourages high-quality job growth.
Objective 2.4: Support equitable housing programs that promote household stability and reduce the incidence of homelessness within Clearwater.
