SOUTH SIOUX CITY -- State officials in Nebraska and South Dakota have nominated five Siouxland census tracts to be designated as "Opportunity Zones," meaning they could receive future investments through a new federal program meant to spur development.
In Nebraska, the nominated tracts include the northern portion of South Sioux City and the northern portion of Thurston County that includes the Winnebago reservation. In South Dakota, the zones include the outer areas of Vermillion, a portion of western Yankton and another area west of Yankton.
The state of Iowa has not yet announced its nominations.
The designated tracts' nomination as Opportunity Zones mean that businesses and property within those areas will be eligible to receive future investments from "Opportunity Funds" being set up by the federal government.
Under the program, private investors will receive tax incentives to reinvest their unrealized capital gains into the Opportunity Funds. Those funds will then invest 90 percent of those dollars into the qualifying low-income census tracts.
The program is part of the Federal Tax Cuts and Jobs Act of 2017, which President Trump signed into law late last year. The Opportunity Zones are intended to draw from the billions of dollars of capital gains in the U.S. as a result of the robust stock market.
To qualify, the census tracts must have a poverty rate of 20 percent or greater or family income at less than 80 percent of the area's median income. States can nominate up to one-fourth of the qualifying census tracts to the federal government, meaning the city must go through a competitive application process to receive the designation.
You have free articles remaining.
South Sioux City's designated census tract sits north of 29th Street and includes approximately 6,500 residents, or about half of the city's population of 13,120. The area had a poverty rate of 28 percent and an unemployment rate of 13.4 percent, according to statistics cited by the U.S. Department of the Treasury.
"We are pleased our application was selected," South Sioux City grant coordinator Kaylee Langseth said in a news release. "It is now up to us to attract quality industrial companies to our area that will be vital for the state of Nebraska, the City of South Sioux City and Siouxland."
Nate Welch, executive director of the Vermillion Area Chamber & Development Company, said the Vermillion census tract receiving the nomination includes the city's three industrial parks, as well as space for future housing projects.
"The area that's selected is really the prime area where most of those projects will go," he said. "This Opportunity Fund designation is really just going to increase the tools that we have in the bag to encourage the businesses to expand or grow here."
The Thurston County tract, which includes all of the Winnebago Tribe's reservation in northeast Nebraska, had a poverty rate of 26 percent and an unemployment rate of 15 percent, according to the Department of the Treasury.
Lucas LaRose, corporate counsel for Ho-Chunk Inc., the economic development corporation for the Winnebago Tribe, said he believes the incentives will help fund a pipeline of future development projects on the reservation.
"We were very excited," LaRose said of Ho-Chunk's response to the news. "This is something that we are very good in doing -- taking these incentives to help develop economic deserts."