Two Las Cruces areas would join the Opportunity Zone program for the first time as New Mexico seeks federal designation for 65 census tracts statewide

Damien Willis, Organ Mountain News

LAS CRUCES - Four areas of Doña Ana County, including three in Las Cruces and one near Sunland Park, have been nominated for federal Opportunity Zone designations that could provide tax incentives for private investment in economically distressed communities. Gov. Michelle Lujan Grisham's administration announced Monday that New Mexico has submitted 65 census tracts across 22 counties to the U.S. Department of the Treasury for designation.

The four Doña Ana County tracts include two areas covered by the original Opportunity Zone program and two that would receive the designation for the first time. Together, the four local tracts have an estimated 14,438 residents, according to 2024 population figures included in the state's nominations. Their poverty rates range from 31% to 40%.

Opportunity Zones offer federal tax advantages to investors who reinvest capital gains in designated communities. The incentives are intended to encourage business development, real estate investment and job creation in areas that have historically struggled to attract private capital. The nominations do not guarantee new development or jobs, and the proposed areas must receive federal designation before the new incentives become available.

Where the four local zones would be located

The state's nominations identify the proposed areas by U.S. Census Bureau tract numbers. A review of Census Bureau maps places three in Las Cruces and one in southern Doña Ana County.

• Census Tract 1.02: Includes the Apodaca Park and former Las Cruces Country Club area, extending east toward Triviz Drive. The tract has an estimated 4,813 residents and a poverty rate of 40%. It was designated under the original Opportunity Zone program.
• Census Tract 5: Covers part of central Las Cruces east of Valley Drive, between Picacho and Amador avenues. It has approximately 2,216 residents and a poverty rate of 31%. It also was part of the original program.
• Census Tract 6: Lies south of Amador Avenue, extending from the South Mesilla Street area east toward Del Monte Street, west of Walnut Street. It has an estimated 2,487 residents and a poverty rate of 32%. It was not designated under the original program.
• Census Tract 17.07: Covers an area southwest of McNutt Road in southern Doña Ana County, near the Santa Teresa-Sunland Park area. It has approximately 4,922 residents and a poverty rate of 31%. It also would be a new Opportunity Zone.

The geographic descriptions are based on Census Bureau tract maps. Census tract boundaries do not necessarily correspond to established neighborhood boundaries or follow streets throughout their entire length. All four Doña Ana County tracts are classified as non-rural in the state's nomination list, meaning they would not qualify for the enhanced rural investment incentive based on that classification.

What the tax incentives would provide

Under the updated federal Opportunity Zone program, investors who reinvest eligible capital gains in designated areas can defer taxes on those gains for five years. Investors who maintain qualifying investments for at least five years can exclude 10% of the original gain from taxation. The exclusion increases to 30% for qualifying investments in rural Opportunity Zones.

Investors who hold qualifying investments for at least 10 years can avoid federal taxes on new gains generated by those investments, subject to the program's requirements and limits. The incentives are designed to attract private investment rather than provide direct government grants to residents or businesses.

The updated program, sometimes called Opportunity Zones 2.0, was established under federal legislation enacted in 2025. It replaces the original temporary program created in 2017 with a permanent framework for designating eligible communities.

Southern New Mexico represented in nominations

Doña Ana County is among several southern New Mexico counties included in the state's selections. Otero County has four proposed Opportunity Zone tracts, Luna County has two and Hidalgo County has one. Grant County also has one nominated tract.

Together, those four counties and Doña Ana County account for 12 of New Mexico's 65 nominations. Statewide, Bernalillo County has the largest number of proposed tracts, with 21, followed by McKinley County with five. Chaves, Doña Ana and Otero counties each have four.

According to the Governor's Office, approximately 230,000 New Mexicans — nearly 11% of the state's population — live in the 65 nominated tracts. More than half of the selected tracts are classified as rural, and more than 90% have poverty rates of at least 20%. Nearly half have poverty rates of 30% or higher, while eight of the nominated tracts include portions of tribal areas.

State says designations could encourage development

The New Mexico Economic Development Department worked with the state's seven regional Councils of Government and local governments to identify areas where federal investment incentives could complement local economic development priorities. The state selected 65 tracts from 257 eligible areas.

"New Mexico is leading the way in attracting new industries and investment, and we're making sure more communities can share in that success," Lujan Grisham said in a statement. "These Opportunity Zones give great businesses another reason to choose New Mexico and bring good-paying jobs to places where those opportunities are needed most."

Economic Development Secretary Rob Black said local input helped guide the selections.

"Our local partners helped us identify which designations could do the most good, and now we have another tool to help bring investment and jobs to those communities," Black said.

The state said Opportunity Zones are intended to complement other economic development programs, including infrastructure investments, site readiness initiatives and financing programs administered through the New Mexico Finance Authority. However, a federal tax incentive does not by itself ensure that investment will occur or that existing residents will benefit from resulting development.

The state has submitted its selections to the U.S. Treasury for final designation. No specific investment projects or job commitments were identified in Monday's announcement. Additional information about the program and the state's selected census tracts is available through the New Mexico Economic Development Department's Opportunity Zones page.

Damien Willis is founder and editor of Organ Mountain News. If you have a personal story to share or a lead we should follow up on, reach out at OrganMountainNews@gmail.com or connect with him on X at @damienwillis.