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April 3, 2019

GenX Capital closes financing for pioneering Opportunity Zone project in Augusta

Photo / Maureen Milliken Downtown Augusta is part of the city's Opportunity Zone, one of 32 in the state expected to benefit from new investment into development. Renovation of the former Odd Fellows Hall at 333 Water St. in Augusta (at right) includes taking advantage of the Opportunity Zone tax law.

GenX Capital Partners of Miami has closed on financing for the redevelopment of 333 Water St. in downtown Augusta.

Redevelopment of the former Odd Fellows Hall at 333 Water St. in Augusta by Dirigo Capital Partners and Capital Area Properties, of Gardiner, may be one of the first projects in the country to take advantage of the Opportunity Zone tax program, Mainebiz reported in August.

The Opportunity Zone program offers tax breaks for investors who roll capital gains into projects in distressed areas.

In a news release, GenX Capital Managing Director Mark McClure said he closed last month on a small bridge loan for the project’s developers. The 31,500-square-foot building at 333-339 Water St. was bought in 2018 for $195,000 by Dirigo Capital Advisors and Capital Area Properties for mixed-use redevelopment.

Kevin Mattson, president of Dirigo Capital, said McClure and GenX Capital "were instrumental in allowing us to acquire this asset quickly, as the minute it became available we knew there would be a lot of bidders, and thus they were able to tap one of their investors in Boston who was able to evaluate and finance the acquisition literally in under two weeks."

“Last month, GenX came in as our long-term lender, replaced the initial funding and now we have the breathing room to move forward with construction and bring this special project to fruition," Mattson said in the release.

The demand for market-rate housing, both in the Augusta zone and throughout Maine, as well as the need for other sustainable development make the program and this asset a great opportunity, Mattson said.

The plan is for ground-floor retail and as many as 30 small market-rate apartments in the 31,000-square-foot building.

GenX Capital’s main focus the past two years has been underwriting debt and equity financing for projects, typically with a capitalization of $25 million or more, according to the release.

“While we typically look to underwrite deals $10 million and up, we launched our direct lending platform a couple of months ago for smaller deals just like this, which now allows us the ability to tap into the ‘fix and flip’ value-add acquisition segment with our own funding,” McClure said.

“We were excited to be the first firm ever to close an Opportunity Zone deal under this platform. Our director of origination for the state of Maine, Michael McNaboe, was instrumental in helping put this all together and Grand Coast Capital and Matt Divito out of Boston were absolutely amazing in the speed in which they were able to close on the initial acquisition. We are now moving toward construction.”

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