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August 25, 2026
ITEM TITLE
Opportunity Zone 2.0 Program: Recommend that the Governor’s Office of Business and Economic Development Include Eight Chula Vista Census Tracts as Part of the State’s Recommendation for the Program Report Number: 26-0275
Location: Eight census tracts located in western Chula Vista.
Department: Economic Development
G.C. § 84308 Regulations Apply: No
Environmental Notice : The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Notwithstanding the foregoing, the activity qualifies for an Exemp tion pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines.
Recommended Action
Adopt a resolution recommending that the Governor’s Office of Business and Economic Development include eight (8) census tracts located in western Chula Vista as part of the State’s recommendation for the Opportunity Zone 2.0 program.
SUMMARY
Opportunity Zones are economically distressed communities in the United States where investments in development projects can earn preferential fe deral tax benefits, such as capital gains deferral. Opportunity Zones are allowed by law under the 2017 Tax Cuts and Jobs Act. The first set of census tracts identified as Opportunity Zones were established for a ten -year period from 2018 through 2028 (“Opportunity Zones
1.0”). Recent legislation transitioned the initiative into a permanent program featuring recurring 10 -year designation cycles. At present, states are nominating census tracts for consideration by the U.S. Department of the Treasury (“U.S. Treasury”) to be included in the Opportunity Zones 2.0 Program, which would be effective from 2027 through 2036. Staff recommends that the City Council adopt a resolution recommending that the State include eight (8) census tracts located in western Ch ula Vista as part of California’s recommendation to the U.S. Treasury for inclusion in the Opportunity Zone 2.0 Program.
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ENVIRONMENTAL REVIEW
The proposed activity has been reviewed for compliance with the California Environmental Quality Act (CEQA) and it has been determined that the activity is not a “Project” as defined under Section 15378 of the state CEQA Guidelines because it will not result in a physical change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Notwithstanding the foregoing, it has also been determined that the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. Thus, no environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable
DISCUSSION
As part of the original Opportunity Zone 1.0 Program established under the 2017 Tax Cuts and Jobs Act, there are a total of three (3) existing census tracts located in Chula Vista that are designated as Opportunity Zones.
These census tracts are located in southwest Chula Vista and are identified in Attachment 1. The Opportunity Zones initiative has recently been made permanent by the 2025 Working Families Tax Cuts Act, allowing for new Opportunity Zones to be created in recurring 10 -year designation cycles. The goal of this item is to establish advocacy for the designation of eight (8) census tracts in Chula Vista to be included in the State’s recommendation for t he Treasury’s consideration as part of the Opportunity Zones 2.0 program. Projects developed in census tracts designated as part of the Opportunity Zones 2.0 program would be eligible for federal tax benefits during the period beginning January 2027 through December 2036.
Opportunity Zones function as economic development tools to incentivize investment and development in disadvantaged neighborhoods that might not otherwise experience revitalization. Property development investments located in Opportunity Z ones are eligible for federal tax benefits, such as capital gains tax deferral and tax-free appreciation.
Opportunity Zones are ultimately established by the U.S. Department of the Treasury. Earlier this year, the Treasury announced that it would begin soliciting comments from states and local agencies on eligible census tracts for inclusion in the Opportunity Zones 2.0 program. Given the criteria established by the program, a total of fifteen (15) census tracts in Chula Vista were identified as disadvantaged and could be considered as eligible for inclusion in the program. These census tracts are all located in western Chula Vista and primarily consist of areas along the Bayfront; in Downtown Chula Vista; and along the Broadway and Main Street corridors. As part of the U.S. Treasury’s comment period, City staff advocated that all fifteen (15) census tracts be considered for the Opportunity Zone 2.0 program.
The Treasury’s public comment period on the Opportunity Zone 2.0 program has closed. The Treasury will now be relying on individual states to make recommendations on which census tracts within their respective state should be considered for inclusion in the Opportunity Zone 2.0 program. City staff will now be making recommendations to the State that certain census tracts in Chula Vista are included in the program. Of the fifteen (15) eligible census tracts, the Governor’s Office of Business and Economic Development (“GO -Biz”) preliminarily recommends that only three (3) census tracts be included for the U.S. Treasury’s consideration.
All fifteen (15) census tracts, including the three (3) recommended by GO -Biz, are identified in Attachment P a g e | 3
2. GO-Biz has provided cities and local agencies throughout the state with a deadline of August 28, 2026, to comment on the recommendations it plans to make to the U.S. Treasury for inclusion in the program.
In addition to agreeing with the three (3) census tracts that GO -Biz is preliminarily recommending, staff is also recommending approval of the Resolution; to advocate for GO-Biz to include an additional five (5) census tracts in its final recommendation to the U.S. Treasury. A map identifying the eight (8) census tracts is included as Attachment 3. The basis for staff’s recommendation of these eight (8) cens us tracts includes consideration of the following, in no particular order:
Maximizing investment and redevelopment potential in the most underutilized areas of the City; Ensuring contiguous redevelopment potential along core commercial corridors, such as the Broadway district;
Ensuring continued investment and development of the Bayfront and implementation of the Chula Vista Bayfront Master Plan;
Ensuring investment and redevelopment of core nodes, including the historic Downtown Chula Vista district and the Chula Vista Center shopping mall.
If GO-Biz concurs with the eight (8) census tracts recommended by the City, the state would include these as part of its recommendation to the U.S. Treasury for consideration as part of the Opportunity Zones 2.0 program. The Treasury is expected to announce its determination later this year on which census tracts it approves as part of the Opportunity Zones 2.0 program.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council and has found tha t, Councilmember Fernandez has real property holdings within 500 feet of the boundaries of the property which is the subject of this action. Consequently, pursuant to California Code of Regulations Title 2, sections 18700 and 18702.2(a)(7), this item prese nts a disqualifying real property -related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.) for the above-identified member.
Staff is not independently aware and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
There are no current-year fiscal impacts to the General Fund as a result of the proposed action.
ONGOING FISCAL IMPACT
There are no on-going fiscal impacts to the General Fund as a result of the proposed action.
ATTACHMENTS
1. Map of Census Tracts Depicting Existing Opportunity Zones 1.0
2. Map of Census Tracts Eligible for Opportunity Zones 2.0 Program
3. Map of Census Tracts City Recommends for Opportunity Zones 2.0 Program Staff Contact: Kevin Pointer, Principal Economic Development Specialist David Graham, Economic Development Director