This story appears in the September 2025 issue of Utah Business. Subscribe.
Opportunity Zones (OZ) were first created under the Tax Cuts and Jobs Act of 2017 as a way to encourage economic growth and job creation in low-income communities by providing tax benefits to investors. Now, these designations have become a permanent law with the passing of President Donald Trump’s “Big Beautiful Bill” (BBB) and will be renewed every 10 years. But did the first-ever OZ designations, which sunset next year, really make a difference?
It seems they didn’t, at least for rural communities. A paper published in 2022 found that as of 2020, only five percent of qualified OZ investments nationwide were made in rural areas.
In Utah, less than half of the 46 OZ designations are in rural counties. Those designations have largely remained unused for the past eight years.
“We’re not the prime places for investment,” Millard County Commissioner Bill Wright says. “We’re generally isolated and there’s no water.”
Jim Grover, managing director of economic growth for the Utah Governor’s Office of Economic Development (GOED), admits there isn’t much of an incentive to invest in rural communities, even with OZ tax benefits.
“When it comes to investment, there’s a lot of looking at where growth is going to occur,” Grover explains. “In hindsight, if there were some sort of bonus or regulations in place to make it easier to potentially invest, … we probably would have seen investors be willing to take the risks.”
Grover’s point is a common critique laid against the original OZ designations. The BBB seeks to address this risk by heavily favoring rural investments over urban investments. Two ways the BBB plans to accomplish this are 1) tripling the standard step-up basis to 30 percent as opposed to the previous 10 percent, and 2) reducing the substantial improvement requirements by half. However, these additional incentives might not matter much unless Utah addresses the other major critique from rural Utah counties: the location of the OZ designations.
A 2018 press release from the GOED states that nominations for census tracts to be designated as OZ were received from the Utah Association of Governments (AOG) and reviewed by the GOED and the Department of Workforce Services. OZ designations had to meet certain requirements regarding poverty levels and median income, but AOGs were also “encouraged to speak with their local stakeholders for the submission of the census tracts.”
“The problem is, we didn’t have a say in where those opportunity zones [were located],” Beaver County Commissioner Brandon Yardley says. “If [the governor’s office] would’ve worked with the counties and said where to put these, they definitely would be more beneficial.”
Opportunity Zones vs. community reinvestment
Rural counties aren’t the only places where OZ designations didn’t always make sense. For more urban areas, including Salt Lake City and Provo, it’s difficult to tell if the designations made a difference due to the fact that they are in areas that were already seeing reinvestment.
“To the extent that developers have leveraged the program to accelerate projects and add much-needed housing to our city and state, it has been beneficial,” says Tauni Barker, communications manager for the SLC Community Reinvestment Agency. “However, the long-term impact of Opportunity Zones remains unclear, particularly in terms of sustained community benefit, affordability, and equitable development.”
In Provo, one of the four OZ designations covers the downtown area, which Provo City Redevelopment Director and Community Grant Administrator Melissa McNalley says was growing steadily before the OZ.
“I’ve been with the city for 15 years, and I’ve seen it go from several empty storefronts on Center Street to mostly full now,” McNalley says. “I think the downtown (area) was already well on its way up.”
Two of the four Provo designations have seen a lot of growth, but like Barker, McNalley pointed out that there’s no real way to know if it’s due to the OZ designations.
“We did see a significant amount of growth in both residential and commercial [in those two tracts],” McNalley says. “Whether that growth is connected to the opportunity zone designation, I’m not sure.”
Similar to AOGs, investors or developers do not need to work with cities and counties to qualify for OZ funds. Therefore, local leaders cannot currently monitor whether or not OZ designations are attracting community investment.
“In my time as economic development director, I was never made aware of any projects that utilized this program,” says Daniel Stewart, who served as the Iron County economic development director from 2014 to 2023. “It’s possible they are out there, but they did not work through me.”
The potential for success
The BBB makes OZ investments subject to more regular reporting: The United States Treasury is now required to publish annual reports on investments and semi-regular reports tracking the economic performance of designated communities compared to similar areas without designations. However, it’s unclear whether local representatives will play a role in gathering that data.
In addition to data tracking, several representatives believe there should be better direction and education to understand Opportunity Zones.
“I think an Opportunity Zone approach could be very successful if there were clearer parameters of how to utilize them and better education of the communities trying to utilize them,” says current Iron County Economic Development Director David Johnson.
One of the last key changes the BBB makes to OZ is narrowing the criteria for designation. This means there will be fewer designations in Utah and across the country overall. The GOED will assign new designations in 2026, and Grover says the governor’s office is already hard at work figuring out how best to proceed with the OZ program. In general, local representatives are supportive of the program, so long as they feel their communities can actually use it.
“An opportunity zone is an additional tool to benefit businesses and grow communities,” Johnson says. “It could be very beneficial if we have the right marketing and the right education.”