St. Cloud Neighborhoods Named Federal Opportunity Zones

(KNSI) – Investors who put money into projects in east St. Cloud and far northwest St. Cloud could soon get a significant break on their taxes.

The U.S. Department of the Treasury announced this week it has approved all 73 Minnesota census tracts Governor Tim Walz nominated as Opportunity Zones. The designations take effect January 1st, 2027, and include all of east St. Cloud and the far northwest part of the city.

Opportunity Zones are a federal program designed to steer private money into lower-income neighborhoods. When people sell stocks, property or other investments for a profit, they normally owe capital gains taxes. If they reinvest that profit in a special fund that builds housing, develops real estate or backs businesses inside an Opportunity Zone, they can delay those taxes, lower them, or in some cases avoid them altogether. Investors who leave their money in the fund for at least 10 years pay no capital gains tax on what that investment earns.

The Minnesota Department of Employment and Economic Development (DEED) says the zones were chosen with input from local leaders. Thirty-five counties weighed in, along with four of the state’s largest cities and two tribal governments.

This round also comes with a few changes. Investments in rural areas get bigger tax breaks than before, and new reporting rules will track what kinds of projects the money actually pays for.

The state’s role ends with the nomination. Decisions about where to invest are up to private investors and the funds they put their money into.

A full map and list of Minnesota’s new Opportunity Zones is available on DEED’s website.

The program was created by Congress in 2017 and renewed in 2025. Going forward, the Treasury will release a new list of eligible tracts every 10 years, and states will submit their picks for approval. Federal law lets each governor pick 25% of the eligible tracts in their state, and 291 Minnesota tracts qualified this time.

The first round of zones, created in 2018, attracted more than $910 million in investment to 76% of the state’s zones. Former Governor Mark Dayton designated 128 census tracts in that round.

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