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June 5, 2018

Boston investors back away from Saddleback purchase

Courtesy / Saddleback Mountain Resort
Courtesy / Saddleback Mountain Resort
The Boston investment firm Arctaris Impact Fund's plans to purchase and reopen Saddleback ski resort suffered a setback when its request to include the Rangeley area in a tax-friendly investment zone was passed over by the LePage administration.

The Boston investment firm Arctaris Impact Fund's plans to purchase and reopen Saddleback ski resort suffered a setback when its request to include the Rangeley area in a tax-friendly investment zone was passed over by the LePage administration in favor of 32 other low-income census tracts statewide designated as Opportunity Zones last month.

Arctaris Managing Partner Jonathan Tower told the Portland Press Herald via email that winning an Opportunity Zone designation was integral to the firm's purchase plans, which the newspaper reported included investing up to $25 million to get the ski area operational and up to another $100 million to expand the resort.

A new economic development program established under the Tax Cuts and Jobs Act of 2017, the designation provides a federal tax incentive for taxpayers who invest unrealized capital gains into so-called "Opportunity Funds," dedicated to investing in established "Opportunity Zones."

Federal law allows governors from each state to nominate 25% of a state's eligible low-income census tracts to be designated as Opportunity Zones. The U.S. Treasury recently accepted Maine's designated tracts into the federal program. Of the 128 eligible tracts in Maine, LePage selected the maximum of 32 for designation into the program.

Maine communities with census tracts designated as Opportunity Zones included a number of mill towns such as Rumford, Millinocket and East Millinocket, Madison and Saco, as well as portions of Bath, Brunswick, Belfast, Washburn and Limestone.

"The door is still open" for the firm to buy the ski area, but it might require a public-private partnership, Tower stated in his written response to the Press Herald.

Still on the market

The spurned Opportunity Zone bid is the latest development in the ongoing efforts by Saddleback's current owners, Bill and Irene Berry of Farmington, to sell the ski resort that hasn't been open since 2015.

In June 2017, the Berrys signed an asset purchase agreement with the Majella Group of Brisbane, Australia.

But Majella Group hasn't closed on the purchase. In March, News Center Maine reported that it received a September 2017 audio recording from a former employee of the Majella Group, on which Majella CEO Sebastian Monsour says that "opening the mountain at Saddleback for the Saddleback Resort is not a primary concern."

The Berry family purchased Saddleback in 2003 and shut down operations in 2015.

Despite the fact that Saddleback Mountain hasn't been open since 2015, winter activities in Rangeley remain strong, including "one of the best snowmobile seasons this year," Rangeley Town Manager Tim Pellerin told Mainebiz in April.

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