Waterville’s Opportunity Zone is within the highlighted census tract (yellow), which includes the City of Waterville’s downtown district.
WATERVILLE, ME, September 24 – Governor LePage named Waterville census tract 23011024102, which includes the city’s downtown area, as one of Maine’s thirty-one (31) Opportunity Zones (OZ), a tax benefit program established in the federal Tax Cuts and Jobs Act of 2017. The goal of the OZ program is to convert U.S. investors’ $2.3 trillion in unrealized capital gains into private investment in low-income communities (“Opportunity Zones”), thereby stimulating growth, creating jobs, and increasing prosperity of residents. “This is more great news for our city, and I applaud the Central Maine Growth Council’s efforts to increase investment in Waterville,” said Winifred Tate, City Council Ward 6. “We see more businesses opening in Waterville every day, and the designation of Waterville’s downtown as an Opportunity Zone is one more way we are encouraging growth that will bring prosperity to all residents.”
Unrealized capital gains are investment profits which have not yet been sold for cash; when sold, or “realized”, these gains are taxed. The OZ program delays or reduces taxation on these gains. Each OZ has an Opportunity Fund (OF), an investment vehicle organized as a corporation or partnership in order to invest in qualified OZ property. The OF must have at least 90% of its assets in qualified OZ property acquired by the OF in 2018. Investors who roll over their unrealized capital gains into an OF can defer the taxes on their gains until 2026, and the longer the gains are invested in OZs, the lower the tax burden.
“We see the OZ program as a game changer for the communities who have been designated. People looking to defer their gains on real estate sales already make up a sizable segment of our investment market base. Given that the OZ program extends beyond the traditional 1031 Tax-Deferred Exchange program, we will see new and exciting business investment opportunities in the zones for investors looking to defer their gains,” explains Chris Paszyc, partner and broker with CBRE | The Boulos Company.
In the spring of 2018, Central Maine Growth Council (CMGC) successfully applied for the designation and is currently working with investors to utilize the program.
“With eligibility in Waterville’s downtown district, inclusion into the OZ program comes at an exciting time for the city and its downtown, as participating in the program illustrates Waterville’s commitment to revitalize and develop the local community, which is a key component of our economic development strategy,” said Garvan D. Donegan, Director of Planning & Economic Development at Central Maine Growth Council. “Over the last few years, the downtown has seen $65.5 million dollars of investment, over 20 commercial properties be acquired, continued growth in the population, and increases in retail sale figures. This now provides us another tool in our toolbox to incentivize businesses and individuals to partner in Waterville’s revitalization.”
This fall and winter, CMGC will be holding educational workshops for the public. Interested parties can visit www.centralmaine.org for more details as they become available.
Last modified: September 25, 2018
