Bleak economy a major stress in rural Maine

Posted Aug. 16, 2009, at 8:41 p.m.

MILO, Maine — The 154 acres on the outskirts of town look more like a cow field than the industrial park that it is. In the five years since the town created it, the park has managed to lure only one tenant, a medical center.

Attracting businesses and jobs is a tough sell here in the far-flung remote areas of Maine.

While coastal and southern parts of the state, and most of New England, have managed to hold their own during the recession, the economy along Maine’s outer edges is bleak.

So much so that Milo Town Manager Jeff Gahagan has been in contact with a prison management company about building a prison in the industrial park for the hundreds of jobs and economic development that would come with it.

“We’ll take anybody with a pulse at this point in time,” Gahagan said.

The six counties along Maine’s western, northern and eastern outer rim — Piscataquis, Washington, Oxford, Franklin, Aroostook and Somerset — are among the most economically stressed in New England. Rural, poor and sparsely populated, the sprawling region includes the forestlands where Henry David Thoreau drew in-spiration, western Maine’s mountains with its ski resorts, rolling farm fields in the north and the rugged coastline and blueberry barrens of eastern Maine.

These “rim counties,” as they are sometimes called, make up six of New England’s 10 worst-off counties, according to The Associated Press Economic Stress Index, which measures unemployment, bankruptcies and foreclosures at the county level.

Rural Maine has suffered for years as the state’s wood-product manufacturers, paper mills, shoe plants and textile mills have shut down, cut back and changed hands.

The current recession has put even more pressure on an already stumbling economy. With construction down, demand for lumber has plunged. With paper demand down, pulp and paper mills have taken it on the chin.

“These were weak economies to begin with, and the recession has magnified those weaknesses,” said Charles Colgan, an economist with the Muskie School of Public Service at the University of Southern Maine.

The small towns that pepper Maine’s rural landscape were once bustling.

Milo, a town of about 2,400 in Piscataquis County, has an unemployment rate of 12.8 percent. At one time, its businesses included hardware, clothing, grocery, furniture, jewelry, liquor and sporting-goods stores, two pharmacies, banks, insurance companies, a movie theater and a Sears catalog store.

People worked at the Dexter shoe plant in town, for the railroads, at a local thread spool manufacturer, at Moosehead Manufacturing furniture company in nearby Dover-Foxcroft, or up the road at two paper mills in Millinocket and East Millinocket.

The shoe, furniture and spool plants are now closed, and one of the railroads is gone. The East Millinocket mill employs 450 to 500 people, and the mill in nearby Millinocket is closed; in their heyday, they employed about 6,000.

A fire last September destroyed a hardware store and three other businesses in the downtown area.

The economy, eroding slowly for years, “went off the cliff” last fall when the global economy tanked, said James Drinkwater, a self-employed carpet and flooring installer who grew up in Milo.

Drinkwater never has had it so hard in his 22 years in business. Lately, he’s been lucky to land a job every other week.

“When you’re basically living day to day, you just try to pay the bills, stay warm, stay fed,” he said.

George Saviolakis used to pack them in at his Milo House of Pizza. On a recent day, only one of the restaurant’s eight tables was occupied at lunchtime.

With jobs and money scarce throughout the region, the pizza and sandwich shop isn’t getting the local business it once did, Saviolakis said. And this year, he isn’t seeing out-of-state visitors. He recently took out a $40,000 loan to pay his bills.

“It’s very tough to survive. But we continue fighting,” he said.

“For Sale” signs have sprouted in lawns around town. In early August, 55 homes were for sale, the most Ellen DeWitt of Ellen DeWitt Real Estate has ever seen. Prices have fallen at least 20 percent in just the past year; nowadays, $75,000 will get you a nice three-bedroom, two-bath house with an attached barn or garage and an acre of land.

“We’re selling a lot homes for $25,000 and under,” DeWitt said. “A lot are bank repos or mobile homes.”

Thomas Kittredge might have the hardest job around. As executive director of the Piscataquis County Economic Development Council, it’s his job to attract new businesses to the county and help existing ones expand.

As he gives a tour of the area, he points to an empty wood products plant in Guilford that shut down in June. In Milo, a building that once housed a gun supply company stands idle. And in Dover-Foxcroft, the search is on to find new uses for the four-story Moosehead Manufacturing plant, which stopped operating two years ago and now stands empty along the banks of the Piscataquis River.

The town now owns the Moosehead plant, but finding somebody to develop it has been elusive. People are hungry for development and jobs, Kittredge said.

“They’re hungry for opportunities,” he said.

There are some pockets of promise. The region’s ski resorts have had their best seasons ever the past two winters, some wood pellet manufacturing plants have sprung up and large wind power projects have brought some jobs.

Some manufacturers are even projecting growth in the years ahead.

JSI Store Fixtures Inc. is the largest private employer in Milo, making custom display stands for retail stores. It, too, has been hurt by the recession, seeing its work force fall from 145 to 106 in the past year, with sales expected to fall 25 percent this year, Executive Vice President Mark Awalt said.

Still, the company expects revenues will more than double in the next few years.

“We have plans to move sales to $30 million-plus in 2012,” he said.

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