Belfast picked for federal 'Opportunity Zone' program

City among 32 tracts in Maine to get special tax designation
By Ethan Andrews | May 21, 2018
Source: U.S. Department of the Treasury From 128 eligible low-income tracts in Maine, left, 32 have been chosen, right, for the federal "Opportunity Zone" program, which offers tax incentives to investors.

Belfast — Gov. Paul LePage on May 21 announced 32 tracts of land in Maine to be designated as federal "Opportunity Zones." Among them is the city of Belfast.

Opportunity Zones were established under the Tax Cuts and Jobs Act of 2017, also known as the Republican tax plan. The program allows individual or corporate investors to defer, and in some cases reduce, their taxes on capital gains by investing that money in "Opportunity Funds," which in turn must be invested in designated Opportunity Zones.

The law allowed governors to nominate 25 percent of their state’s eligible low-income census tracts to be designated as Opportunity Zones. Maine had 128 eligible tracts from which LePage selected the maximum of 32 for the program.

While many of the state's population-based census tracts are tucked into a corner of a city or sprawled across several rural municipalities, Belfast comprises one complete tract. The city was one of three eligible tracts in Waldo and Knox counties and the only one to get the federal designation.

While the tax cuts offered through the Opportunity Zone program are meant to help economically distressed areas by making them attractive to investors, some critics say they could speed gentrification, particularly in areas that already are in the process of gentrifying.

Thomas Kittredge, economic development director for the city of Belfast, said he learned of the program shortly before the application deadline and decided it was worth a shot.

"I thought it was really no risk to the city to be selected," he said. "It probably won't be be a silver bullet, but it might add another tool to our toolbox."

Kittredge said he expects to know more about the program in a month or two when the Internal Revenue Service finishes drafting rules for how it will be implemented.

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