Baldacci: Seizing Katahdin mill not yet an option

Posted Aug. 31, 2008, at 9:38 p.m.
Last modified Jan. 29, 2011, at 7:25 a.m.

MILLINOCKET, Maine — Gov. John Baldacci will hold a multibillion-dollar Toronto-based conglomerate to its promise to reopen the Katahdin Avenue mill before he acts on other options, he said Saturday.

Baldacci was responding to millworker and town Councilor Scott Gonya’s proposal Thursday that the town should seriously consider using eminent domain to seize the mill. The Katahdin Paper Co. LLC mill is due to shut down indefinitely because of the high cost of oil. That announcement came Aug. 25.

Workers say they will finish producing orders this week and begin mothballing the mill for a reopening. Baldacci said Brookfield promised a reopening next year, but parent company Brookfield Asset Management has not confirmed this.

“There’s a great amount of frustration about the way this situation has been handled by the company,” Baldacci said in a statement released Saturday. “I can understand the desire to take immediate action.

“At this point, I think we need to continue to work toward a successful reopening of the mill with the company,” he added. “Senior officials at the mill and its parent company have assured me that they intend to reopen the mill, and I will hold them to that commitment.”

Through Brookfield — which has $95 billion in assets and netted $110 million in the last fiscal quarter — Katahdin officials announced May 29 that the mill would close in 60 days because of a lack of profitability, cutting 208 workers and affecting the Katahdin region economy.

They have extended the deadline repeatedly after Baldacci’s intervention, improved sales, found energy savings and negotiated with energy providers to install a biomass boiler in the mill to replace oil burners that heat the mill and provide steam needed for paper-making.

Eminent domain is defined as a government’s inherent power to seize private property with due monetary compensation, but without the owner’s consent, for civic use or economic development.

The governor’s spokesman said state officials are unsure of the practicability of Gonya’s idea, and so is Gonya.

Gonya, however, who admitted his idea was coercive, has said his research thus far includes talks with attorneys from Maine Municipal Association, the state Public Utilities Commission officials and workers at Bangor Hydro-Electric Co.

Gonya’s tentative plan is to use eminent domain to seize the mill and its generators, which make about 37 megawatts of electricity, and turn the generators into a public utility.

This would greatly lower town utility rates while perhaps generating as much as $14 million in electricity sales on the New England power grid and making Millinocket a magnet for other industries, he said.

Councilors Jimmy Busque and David Cyr endorsed the idea. Town Council Chairman Wallace Paul and other councilors agreed to meet with company officials, unions and state officials to discuss eminent domain, continuing mill operations and other options for the mill’s future. No date has been set.

Baldacci spokesman David W. Farmer said in an e-mail that while it might be possible, eminent domain is “a very controversial tool for government. It should be used only when absolutely necessary and under specific circumstances.

“The governor believes that the best approach to get the mill reopened is to work cooperatively with the company. Any other means shouldn’t be considered until those efforts have run their full course,” he added.

Meanwhile, the towns of Medway and Millinocket, state government, Maine’s congressional delegation and the Penobscot County Transition Team — a collection of social service agencies, government departments, churches and civic groups — pledge to do all they can to help laid-off workers cope with unemployment or find jobs before and when lay-offs occur.

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