By Sara Beth Williams–
Three census tracts in Citrus Heights, including the Sunrise Mall and surrounding commercial areas, are being submitted for nomination to the state for inclusion in a federal program aimed at encouraging private investment.
The Citrus Heights City Council unanimously approved a resolution on July 8 supporting the nomination of three eligible census tracts to be included in an “Opportunity Zone 2.0” federal program that is designed to encourage and incentivize private investment into the specified designated zones.
The action does not provide funding for any projects, nor does it guarantee future development. Instead, city officials say any future designation could make those areas more attractive to private investors by offering certain federal tax incentives. The designations must first be submitted to the state for approval, and then to the U.S. Department of the Treasury for final approval.
The original federal Opportunity Zone program was created through the Tax Cuts and Jobs Act of 2017 as a way to encourage long-term investment in economically distressed communities. Under the program, investors who reinvest capital gains into qualifying projects located within designated Opportunity Zones may be eligible to receive federal tax benefits.
According to the city staff report, the designations are intended to serve as another economic development tool rather than a direct source of funding.
California received 879 Opportunity Zone designations under the original program in 2018, the staff report indicates. Those census tract designations are set to expire after 2026, but Congress voted in 2025 to permanently reauthorize the program, creating what has been informally referred to as Opportunity Zones 2.0.
As part of the new process, states must nominate a new set of eligible census tracts. The U.S. Department of the Treasury has updated its federal criteria based on measures such as median family income and poverty levels, the city staff report indicates. Only federally eligible tracts may be nominated.
Of California’s 2,469 eligible census tracts, the governor may nominate up to 618 for official designation, the staff report states.
According to the city, only three census tracts within Citrus Heights qualify under federal eligibility requirements and staff proposed recommending all three. Upon approval, the census tracts will be submitted to the Governor’s Office of Business and Economic Development for consideration.
The largest of the three includes the Sunrise Mall property and surrounding commercial area. City officials said the designation could potentially complement ongoing redevelopment efforts under the Sunrise Tomorrow Specific Plan, as well as future projects such as the proposed Sunrise Sports Center, by providing another financial incentive for private investors.
A second eligible tract includes the Stock Ranch commercial district, encompassing City Hall, Sam’s Club, and Safeway shopping centers and surrounding business areas. The staff report identifies the area as having opportunities for commercial reinvestment and infill development.
The third eligible tract covers portions of the Greenback Lane and Auburn Boulevard commercial corridor, including the shopping center anchored by Grocery Outlet and Petco. According to the report, the area contains commercial properties that could benefit from future reinvestment.
“If there is a property owner and they are looking to develop, and their project requires investment, it’s easier for them to attract that investment, because there are those tax benefits that exist there,” Alicia Aguirre, management analyst with the Economic Development and Community Engagement Department said Wednesday.
City officials emphasized that receiving the designation does not automatically result in new construction or redevelopment, but provides a financial incentive that developers and investors may choose to use when pursuing qualifying projects.
The staff report also noted there is no immediate fiscal impact associated with the council’s action. If the state and federal governments approve the nominations and the designation succeeds in attracting additional private investment, the city could eventually see increased property and sales tax revenue from future development.
The resolution adopted on July 8 will now be forwarded to the Governor’s Office of Business and Economic Development, which will determine which eligible census tracts across California will ultimately be nominated to the U.S. Department of the Treasury for final approval.
