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June 14, 2018

Washington County leaders welcome ‘Opportunity Zone’ designation

Local economic development and business leaders in the Washington County towns of Baileyville, Calais, Whiting, Dennysville, Pembroke, Baring and Meddybemps are eager to take advantage of being placed in a federally designated Opportunity Zone program under the Tax Cuts and Jobs Act of 2017.

The Quoddy Tides reported that Sunrise County Economic Council Executive Director Charles Rudelitch said the new program will be especially powerful for real estate investments. He expects it will be most likely used for building renovations, new buildings and expansions.

"It has the potential to give us that edge to attract investment," said Julie Jordan, executive director of Downeast Economic Development Corp.

"When dealing with capital investments in the millions of dollars, having this in place is certainly a large consideration of where ownership will invest when evaluating the overall project's financial returns," Scott Beal, spokesman for Woodland Pulp in Baileyville, told the biweekly newspaper. Woodland Pulp, a major Washington County economic engine employing about 310 people, filed an application with the Maine Department of Environmental Protection May 15 for two more tissue machines.

According to a news release from the U.S. Department of Treasury, the Tax Cuts and Jobs Act created Opportunity Zones to spur investment in distressed communities throughout the country. New investments in the zones can receive preferential tax treatment. Maine was one of 18 states to receive designations.

Qualified zones retain the designation for 10 years. Investors can defer tax on any prior gains until no later than Dec. 31, 2026, so long as the gain is reinvested in a "Qualified Opportunity Fund," an investment vehicle organized to make investments in the zones.

In late May, Gov. Paul R. LePage named 32 low-income census tracts within Maine — the maximum allowed — to participate in the federal Opportunity Zones program.

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