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In the Zone: 126 Distressed Areas Selected for Investor Opportunity

Reinvesting in viable projects in distressed areas


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The recent selection of 126 investor Opportunity Zones in Colorado amounts to a modern-day Goldilocks story, with the final selected zones nominated from 501 economically distressed U.S. Census tracts.      

During the statewide selection process, some areas were deemed “too cold” to attract capital gains investment and some “too hot” and not in need of extra help, says Stephanie Copeland, executive director of the Colorado Office of Economic Development & International Trade (OEDIT).  She says the 126 “just right” zones, in 46 of the state’s 64 counties, are both economically distressed and home to potential projects that could appeal to investors.

Opportunity Zones were established through the Tax Cuts and Jobs Act in December 2017 to help investors with capital gains from the sale of capital assets connect to reinvest in viable projects in distressed areas. This new federal tax incentive sunsets in 2026.

Jeff Kraft, OEDIT division director for Business Funding and Incentives, says this new experiment in Opportunity Zones is unique because “it dwarfs most other government programs that have strict limits and quotas.”

“If harnessed, it can have a tremendous impact with the huge amount of potential capital,” Kraft says, noting estimated annual capital gains in the U.S. of $7 trillion.

“It’s up to the creativity of the private sector.”

The zones (see www.choosecolorado.com/oz) range in size from a dot on the state map indicating a specific project to the entirety of some counties, including Bent, Cheyenne, Crowley, Dolores, Lake and San Juan.

Some 60 percent of the Opportunity Zones were selected outside of the Colorado Springs-to-Greeley corridor to encourage private investment in low-income areas that do not normally place high on the investment radar, Kraft says. The zones are based on geographic dispersion from the core of the state or an interstate, low per capita income and unemployment levels.

Initial interest in the zones has focused on commercial real estate, workforce and affordable housing, renewable energy, existing business growth and seed money for new business.

Paul Major, president of the nonprofit Telluride Foundation, says opportunity zones represent a “fun structure” for place-based investing that hits the rural business “sweet spot.” Investors drawn to his four-county region, for example, could support bakery owners in the small town of Norwood hoping to triple production or a proposed RV park in Montrose County aiming to attract more tourists.

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Suzie Romig

Suzie C. Romig is a freelance journalist who has lived in Colorado since 1991. Her byline has appeared in newspapers and magazines across the state on topics ranging from small businesses to raising children to energy efficiency. She can be reached at suziecr@q.com

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