Departments

Economic Development Programs and Resources

ALL YOU NEED ARE THE RIGHT CONNECTIONS! Augusta is connected to all the elements you and your business need to thrive. Discover the advantages that Maine’s capital city has to offer.

Tax Increment Financing
(TIF) Program
Opportunity Zone
(QOZ)
Affordable Housing Tax Credit Program &
Community Development Block Grant
New Markets Tax Credit Program &
U.S. Small Business Administration

Augusta’s Tax Increment Financing (TIF) Program: A Catalyst for Growth

The City of Augusta has set the standard in the state of Maine through its strategic and impactful use of Tax Increment Financing (TIF). This innovative economic development tool has been a cornerstone in positioning Augusta as a hub of commercial activity, positioning the city as Central Maine’s leading service center community.

What is Tax Increment Financing (TIF)?

Tax Increment Financing, or TIF, is a financial mechanism that municipalities use to stimulate economic development. By designating a specific geographic area as a TIF district, the city can channel the increased property tax revenues generated by new development within this area to fund public infrastructure projects or support private development through Credit Enhancement Agreements (CEAs).

Augusta’s Proactive Approach

Augusta has embraced tax increment financing with unparalleled impact, far surpassing other Maine communities. As of 2020, the city boasts 26 active TIF districts, each playing an important role in supporting growth across several sectors, including healthcare, manufacturing, distribution, affordable housing, and historic preservation. This strategic use of tax increment financing has facilitated significant investments, notably in the downtown business district and major healthcare infrastructure projects like the MaineGeneral Hospital and the Alfond Cancer Center.

Key Benefits of TIF

  1. Infrastructure Development: TIF allows Augusta to invest in essential public infrastructure without burdening taxpayers. Bonds funded by the incremental tax revenues from TIF districts enable the city to improve roads, utilities, and public facilities, thereby enhancing the overall quality of life and attractiveness for new businesses and residents.
  2. Economic Growth: By creating TIF districts, Augusta incentivizes private investment. CEAs provide financial assistance to developers, covering extraordinary site development costs or filling gaps in project financing. This partnership approach has been instrumental in revitalizing neglected areas and attracting high-value developments.
  3. Community Impact: Tax increment financing helps mitigate the financial impacts of increased property values on municipal funding. By excluding the added value within TIF districts from the state’s municipal valuation, Augusta can avoid reductions in state aid and increases in county taxes, preserving essential services for its residents.

Recent Success Stories

Quimby Business Park TIF (2023): The Quimby Business Park TIF, approved in 2023, is a 30-year district aimed at extending Anthony Avenue to provide access to new commercial development lots. This project includes in-ground utilities and street lighting, making the area more attractive for future businesses. The city retains 100% of the increment value, which will be used for these infrastructure improvements​​.


J.S. McCarthy VI TIF (2023): Another recent success is the J.S. McCarthy VI TIF, established in 2023. This 20-year TIF supports the construction of an 11,403-square-foot addition to the company’s facility. The agreement splits the tax increment equally between the developer and the city's economic development activities, ensuring both business growth and municipal benefits​​.


Sturgeon Landing Affordable Housing TIF (2022): This TIF was created to facilitate the development of 32 workforce housing rental units. The project, supported by state tax credits, allocates 75% of the increment to the developer and 25% to the city’s Affordable Permanent Housing Development Investment Fund, promoting long-term housing affordability in Augusta​​.


The City of Augusta’s exemplary use of Tax Increment Financing has not only catalyzed significant economic development but also set a benchmark for other municipalities in Maine and beyond. Through careful planning, strategic partnerships, and a commitment to community impact, Augusta continues to thrive as a dynamic and prosperous city. Whether through enhancing public infrastructure, fostering private investments, or revitalizing communities, Augusta’s TIF program stands as a testament to the power of innovative municipal finance.


For more information on the city’s tax increment financing policy, including directions on how to start the application process you can access the TIF policy here.

Opportunity Zone Program

The Federal Opportunity Zone program encourages private investment in targeted, economically challenged areas by offering tax benefits to investors. These benefits include deferral, reduction, and potential elimination of capital gains taxes on investments made in designated Opportunity Zones. Opportunity Zones are delineated by Census Bureau tracts. The City of Augusta has one designated Opportunity Zone – the map can be downloaded here.


Investment Incentives

  1. Deferral of Capital Gains Tax: Investors can defer taxes on capital gains if those gains are reinvested in Qualified Opportunity Funds (QOFs). The deferral lasts until the earlier of the date the investment is sold or exchanged, or December 31, 2026.
  2. Step-Up in Basis: Investments held for five years receive a 10% exclusion of the deferred gain, and those held for seven years receive an additional 5% exclusion.
  3. Permanent Exclusion: If the investment in the QOF is held for at least ten years, any additional gains accrued from the investment are exempt from capital gains tax.

What is an Opportunity Zone?

An Opportunity Zone is an economically distressed area in a community where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualify as Opportunity Zones if they have been nominated for that designation by the state and that nomination has been certified by the Secretary of the U.S. Treasury via his delegation authority to the Internal Revenue Service.


HOW DO OPPORTUNITY ZONES SPUR ECONOMIC DEVELOPMENT?

Opportunity Zones are designed to spur economic development by providing tax benefits to investors. First, investors can defer tax on any prior gains until the earlier of the date on which an investment is sold or exchanged, or December 31, 2026, so long as the gain is reinvested in a Qualified Opportunity Fund. Second, if the investor holds the investment in the Opportunity Fund for at least ten years, the investor would be eligible for an increase in basis equal to the fair market value of the investment on the date that the investment is sold or exchanged.

HOW WERE OPPORTUNITY ZONES CREATED?

Opportunity Zones were added to the tax code by the Tax Cuts and Jobs Act on December 22, 2017.

How do I apply?

The Opportunity Zone program is an exclusively federal program written into the federal tax code. Your local municipality can help determine whether a subject property falls within a Qualified Opportunity Zone, but individuals should consult with a tax professional to determine

the extent of the benefit that an investment in an Opportunity Zone could provide to them.

City of Augusta's Qualified Opportunity Zone

The City of Augusta’s Qualified Opportunity Zone (QOZ) is defined by Census Tract 103 - one of the city’s five Census Tracts. The boundaries of the zone are the west bank of the Kennebec River to the east, the northern side of Memorial Drive and Western Avenue in the south, the municipal border with the Town of Manchester to the west, and the southern bank of Bond Brook to the north.

Map and Information Can be found here.

Maine State Housing Authority (MSHA) Affordable Housing Tax Credit Program

The Maine State Housing Authority's (MSHA) Affordable Housing Tax Credit program is a critical initiative designed to increase the availability of affordable housing across the state. This program leverages federal Low-Income Housing Tax Credits (LIHTC) to incentivize private developers to create and maintain affordable rental housing for low-income residents.


The Affordable Housing Tax Credit program provides tax credits to developers who agree to reserve a portion of their units for low-income tenants at reduced rents for a minimum of 30 years. The credits can be claimed annually over a ten-year period, making it financially feasible for developers to undertake affordable housing projects that might otherwise be unviable.


Several notable projects in Augusta have utilized the Affordable Housing Tax Credit program to expand affordable housing options. One such project is the Cony Flatiron Senior Residence, which transformed the historic Cony High School building into 48 affordable housing units for seniors. This project not only preserved a historic landmark but also addressed the critical need for senior housing in the area.

Another significant project is the Hodgkins School Apartments, which repurposed a former elementary school into 47 affordable apartments for seniors. This development provided much-needed affordable housing while revitalizing a historic building and contributing to the community’s overall economic health.


Additionally, the Maple Street Apartments offer affordable housing for families, demonstrating the program's flexibility in serving different populations. This project includes 32 units designed to provide safe, affordable housing options for low-income families in Augusta.

The MSHA's Affordable Housing Tax Credit program plays an essential role in fostering community development and ensuring that low-income residents have access to quality, affordable housing. By supporting projects like Cony Flatiron Senior Residence, Hodgkins School Apartments, and Maple Street Apartments, the program significantly impacts the lives of many Augusta residents.


For more information, interested parties can contact MSHA directly at

207-626-4600 and info@mainehousing.org.


COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG)

The 2024 Economic Development Program is designed to promote economic growth in communities across Maine. Administered by the State of Maine’s Office of Community Development (OCD), the program provides financial assistance to support job creation, business expansion, and infrastructure improvements, particularly benefiting low- and moderate-income persons.

CDBG Program Overview

The Economic Development Program (EDP) offers funding to municipalities and counties to assist businesses that will create or retain jobs for low- and moderate-income residents. The program emphasizes leveraging other public and private resources to ensure projects are financially viable and have a broad impact on the community.

Key Features and Requirements

  1. Eligibility: Only communities with prior written OCD approval of their Letter of Intent to Apply are eligible to submit applications. Applications must be submitted by invitation only and received in PDF format via email.
  2. Job Creation: A primary requirement is that projects must result in job creation or retention, with a focus on permanent, full-time positions. The maximum CDBG participation per job created or retained is $30,000.
  3. Public Hearing: Each applicant is required to hold a public hearing to solicit community feedback. Proper documentation of the hearing, including minutes and attendance lists, must be submitted with the application.
  4. Matching Funds: Applicants must demonstrate firm financial commitments from other sources to meet the matching funds requirement. Commitment letters must be included, specifying the amount, terms, and conditions of the funds.
  5. Application Components: The application must include a signed cover sheet, project information sheet, responses to specific questions, a matching funds table, a budget summary, and documentation of the public hearing. Financial documentation and a consumer credit authorization form are also required.
  6. Review Process: Applications undergo a rigorous review process by the EDP Review Team, which makes recommendations based on the project’s alignment with state economic development strategies, financial viability, and job creation potential. Final funding decisions are contingent on the completion of a project development phase that includes eligibility verification, environmental review, cost analysis, and the development of a management plan.

Application Timeline and Submission

The program operates on a strict timetable, with specific submission requirements and deadlines. Applicants must adhere to these guidelines to ensure their applications are considered. Non-conforming applications will not be scored.


For further information or assistance with the application process, interested parties can contact the Office of Community Development at

207-624-7484 and ocd.application@maine.gov.

New Markets Tax Credit (NMTC) Program

Coastal Enterprises, Inc. (CEI) operates the New Markets Tax Credit (NMTC) Program, a powerful tool aimed at stimulating economic growth and revitalizing communities in underserved areas. The NMTC Program, established by Congress in 2000, incentivizes private sector investment in economically distressed communities by providing tax credits to investors who make equity investments in qualified community development entities (CDEs), like CEI.


CEI leverages the NMTC Program to channel investment into projects that generate significant community benefits, such as job creation, environmental sustainability, and improved access to essential services. By doing so, CEI helps transform struggling areas into vibrant, thriving communities.


The core function of the NMTC Program is to attract private capital by offering investors a 39% federal tax credit, distributed over seven years, in return for their investment in qualified projects. These projects often include the development of commercial real estate, community facilities, and mixed-use developments that might not otherwise secure financing due to the high risks involved.


CEI plays a crucial role in identifying and supporting projects that align with its mission of creating economically and environmentally healthy communities. Through rigorous evaluation, CEI ensures that selected projects deliver measurable benefits to low-income residents, such as job creation, increased wages, and access to critical services like healthcare and education.


One notable aspect of CEI's NMTC Program is its focus on sustainability. Projects often incorporate green building practices and renewable energy solutions, reflecting CEI’s commitment to environmental stewardship alongside economic development.


Overall, CEI's New Markets Tax Credit Program serves as a catalyst for positive change, driving private investment into areas that need it most and fostering sustainable, inclusive growth.


For more information or to explore potential investment opportunities, interested parties can contact CEI directly at 207-504-5900 and info@ceimaine.org.


The U.S. Small Business Administration (SBA)

The U.S. Small Business Administration (SBA) provides a range of services to support small businesses, including loan programs, counseling, and training. SBA offers financing options such as 7(a) loans, 504 loans, and microloans to help businesses with working capital, purchasing equipment, and real estate. Additionally, the SBA provides free business counseling and training through resource partners like Small Business Development Centers (SBDCs), SCORE, and Women’s Business Centers (WBCs). They also assist with federal contracting opportunities through the 8(a) Business Development program and the HUBZone program.


For more information, you can contact the Augusta, Maine SBA Office at

207-622-8274 and maine_do@sba.gov.