By Opportunity Zone Magazine Staff
Dirigo Capital Advisors of Augusta is prepping what’s believed to be Maine’s first Opportunity Zone project, in a move that highlights the program’s potential to spur development in smaller and non-traditional markets.
The project is a redevelopment of a former Odd Fellows Hall in downtown Augusta, which until 2016 had been used as a venue for playing wallyball — a type of volleyball played on racketball courts. Safety concerns put an end to the wallyball sessions in 2016, and Dirigo bought the underused property last fall for $195,000.
Now the group is planning a $2 million to $3 million overhaul that will see the upper floors converted into around 30 apartments, and retail spaces built on the street level. Dirigo also plans to build out and operate a brewery in the building’s basement.
Around 60% of the capital for the project will be raised through OZ investments, says Dirigo chief development officer David Tucci. Still, finding OZ investors isn’t proving easy.
“In our neck of the woods, in Maine, that’s been a challenge — finding people who’re really educated and want to jump on board,” Tucci says. “A lot of investors are new to it, and don’t understand the nuances.”
To cope with that, Dirigo is using digital platforms to solicit capital from across the US and has taken out a bridge loan from Florida real-estate investment specialist GenX Capital Partners to bankroll initial planning and generate momentum for the project.
“It’s been instrumental,” Tucci says. “We’re waiting for OZ investors who may not be in our state or our network, so what do you do? Put everything on hold? We’re using that bridge capital to get the project rolling, so the investors can see some movement.”
The loan marks GenX’s first foray into supporting OZ projects, says Mark McClure of GenX. “We knew Dirigo’s track record, so we jumped on it,” he says.
GenX is now working on other short-term financing deals for OZ projects around the country, and McClure says many other developers similarly need a temporary helping hand while raising OZ capital.
“There’s been a huge uptick in Opportunity Zone deals,” McClure says. “We’ve had a ton, and I mean a ton, of people coming to us — it’s like every project that’s sent to us is in an Opportunity Zone.”