Five Lima neighborhoods will carry a powerful new development incentive into the next decade. Beginning January 1, 2027, five census tracts within the City of Lima will qualify as federally designated Opportunity Zones — two newly designated areas and three renewed zones — with the designations remaining in effect for ten years, according to the City of Lima. WLIO reported this week that the federal tax incentives aim to encourage development in Lima neighborhoods.
The zones reach across the city. According to the City of Lima, they include Census Tract 127 on the south side, near Orena Avenue; Census Tract 133 on the southwest side, near Faurot Avenue; Census Tract 126 on the southeast side, near South Dana Avenue; and Census Tract 141, covering downtown Lima and the near east side, among the five designated tracts.
Opportunity Zones are federally designated areas where investors may qualify for tax incentives by reinvesting eligible capital gains into businesses and real estate projects, the city explains. The federal program, originally established to encourage economic development in underserved communities, was made permanent in 2025, with new geographic designations established every ten years.
All five of Lima’s Opportunity Zones are classified as rural under the federal program, according to the City of Lima — a classification that provides enhanced investment incentives and more flexible requirements for qualifying improvements to existing properties. That rural designation could matter for the smaller, building-by-building projects that often drive neighborhood turnarounds.
The city is careful to set expectations: an Opportunity Zone designation does not provide direct grants or automatically fund development projects. Instead, it creates a financial incentive for private investment — the projects still have to be proposed, financed and built by investors and developers willing to put capital into Lima.
Lima already has a vehicle built for exactly that work. The Arctaris-Lima Opportunity Zone Investment Program, established in 2023 with the Lima/Allen County Chamber Foundation, represents a $25 million investment commitment, including a $5 million loan from the City of Lima and $20 million committed by Arctaris Impact Investors, according to the city. The program connects potential investors and developers with opportunities to support business expansion, real estate redevelopment and job creation within Lima’s zones.
The new designations take effect with the new year and run for a full decade, giving Lima one of the longer runways in Ohio economic development: ten years in which the city’s five zones can be marketed to investors holding capital gains and looking for a place to put them to work.