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Downtown Augusta project said to be one of first under Opportunity Zone program

BY Maureen Milliken

8/17/2018
Photo / Maureen Milliken
Photo / Maureen Milliken
The former Odd Fellows building at 333-339 Water St. in Augusta, at right, will be redeveloped as part of the Opportunity Zone program launched earlier this year by the federal government. Much of the west side of Augusta is a designated zone, one of 32 in the state named by Gov. Paul LePage in May.

A project to develop a downtown Augusta building is one of the first under the new federal Opportunity Zone program, the new owners say.
The 31,500-square-foot building at 333-339 Water St. was recently bought for $195,000 by Dirigo Capital Advisors and Capital Area Properties, and is being redeveloped under the program, which provides tax cuts for developers who invest unrealized capital gains in property in the state’s 32 “opportunity zones.”
Developers of the building say it’s one of the first known projects in Maine under the program, which was launched in May after Gov. Paul LePage named the 32 Opportunity Zones.
The state Department of Economic and Community Development didn’t have information Friday morning on how many projects in the state are underway under the program. The program is not directly overseen by the state, but by the federal government.
State officials in May said out of the 128 areas eligible, LePage’s 32 picks were based on identified investment opportunities where such investments would be likely to be met with success. The program is part of the Tax Cuts and Jobs Act of 2017.
The Augusta zone is a large swath of the heart of the west side of the city, stretching from the Kennebec River and downtown west to the city border with the town of Manchester, and bordered on the south by Western Avenue and bond brook to the east.

Much of the focus of Augusta redevelopment has been its four-block downtown along the Kennebec River, where 10 new businesses have opened in the past two years and the amount of residential space has more than doubled.
Downtown Alliance Executive Director Michael Hall said Friday morning that the purchase is another positive step for Water Street.
“There are no words to describe the impact that a development such as that of 333-339 Water St. can have on this downtown,” he said. “The promise of new residents and retail open up a world of possibilities, and can only be beneficial for the merchants and residents who already live here.”
Owner Ben Spencer said in a news release the goal of the project “is the continued revitalization of downtown Augusta.”
“[Dirigo Capital Advisors President] Kevin Mattson already has a strong track record of redeveloping difficult projects in Augusta, so we look at this as a great opportunity. We are excited to be doing one of the first Opportunity Zone project in Maine,” Spencer stated.
Spencer said renovation of the 31,500-square-foot building has already started.
He said the building will continue to have street-level retail, as well as 30 residential units.
The six-story building, which was built in 1900 as an Odd Fellows Hall, is at the south end of Water Street and most recently housed CJ’s Pizza and Beads on the Kennebec. The two lower floors are below street level, but open to the Kennebec River side of the building.
Spencer wasn’t available to comment Friday morning on whether retail businesses currently in the building will stay.
Capital Area Properties is based in Gardiner, and owned by Ben, Robin and Evan Spencer.
Topsham-based Dirigo Capital Advisors has been instrumental in development and management of property across southern and central Maine, particularly older and historic property. Augusta-area projects include the Ballard Center, which is the former Augusta General Hospital; the Capital Commerce Center in the north end of town and more.