Sustainable: Opportunity zones could boost clean energy.

Byline: Frank Jossi

A 2017 law offering wealthy investors a chance to reduce their capital gains taxes in return for financing real estate and clean energy projects in poor neighborhoods is struggling to take flight in Minnesota.

Opportunity zones, part of the Tax Cuts and Jobs Act, allow investors to place their capital gains in legally established funds for projects in economically distressed areas defined by the federal government. More than 8,700 designated zones exist in the United States, 128 of them in Minnesota.

A secondary attribute, appealing to clean energy developers, is that opportunity zone funds can be used for solar, microgrids, electric vehicle charging stations, and energy storage. Clean Energy Economy Minnesota held a luncheon Oct. 24 at Avisen Legal PA in Minneapolis that drew a capacity crowd of more than 50 people, among them several solar developers.

An apartment developer and an opportunity zone fund manager who were not at the event told Finance & Commerce they have opportunity zone projects in different stages of planning that include rooftop solar energy. They are likely to be among the first opportunity zone projects built in Minnesota.

Avisen has participated in at least one opportunity zone deal on the East Coast and boasts a strong roster of attorneys with backgrounds in clean energy. CEO Todd Taylor has worked on a project in Trenton, New Jersey, that has built a plant in an opportunity zone that turns trash into biogas. Having it located in a zone helped the project gain additional funding, he said.

A statewide effort has emerged to promote opportunity zones to cities and investors. Lynne Osterman is executive director of St. Paul-based Community Exchange Minnesota, which helps communities become investment-ready. A former state legislator, Osterman also works with the MN Opportunity Collaborative, an initiative backed by the Duluth-based community development organization Northspan and sponsored by a variety of funders.

The MN Opportunity Collaborative provides a directory of 55 sites that could benefit from opportunity zones investment. Minneapolis has 19 zones and St. Paul has 18. St. Paul seems more interested in appealing to investors, with a page of its website devoted to opportunity zones and a map of their locations. (The city says the zones cover more than 20 percent of St. Paul.) The suburbs add 13 more zones to the region. Greater Minnesota has 78 zones.

For communities and projects to benefit, an...

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