Tribe eyes Monson furniture factory

Posted April 13, 2010, at 8:21 p.m.
Last modified Jan. 30, 2011, at 12:01 p.m.

MONSON, Maine — The Passamaquoddy Tribe is the party that helped stave off a January auction of Moosehead Furniture Co.

Tribal members are aggressively working to determine the feasibility of purchasing the well-known Monson furniture company to start up the manufacturing process again and to open a large wood pellet mill at the location. But there is much to be done before any deal is made, Gov. William Nicholas of the Passamaquoddy Tribe’s Indian Township reservation said Tuesday.

“We’ve got to look at changing what that status is to keep the furniture company going, but also have something that’s going to be long-term and create more jobs and revenue in that area,” Nicholas said. “If we can pull all of that together, then we have a project.”

The tribe is in the “due diligence process” right now, pending the conclusion of a feasibility study, according to Nicholas. Once the study has been completed, the tribe will know whether to make an outright purchase of the company or drop the idea, he said. Nicholas estimated that the tribal council could act on the proposal in three to four weeks.

Monson Town Manager Julie Anderson, who has been working with the tribe, said she was hopeful that the project will move forward. She said the tribe asked the town to contribute some funds to help finance the study. She said selectmen have not yet acted on that request, but there are funds available through a previous Tax Increment Financing agreement with the former Moosehead Manufacturing Co.

“They want to make sure this will work,” she said of the tribe.

The last thing the Passamaquoddy Tribe wants to do is open the business and then have to shutter it, Nicholas agreed. “We want to be sure we have the ability to keep people working, and not tear or shut it down,” he said.

The factory has been closed twice in its history.

The business, which previously operated as Moosehead Manufacturing Co., was operated by the Wentworth and Durham families of Monson for 60 years. In early 2007, the families closed the business, in part because of competition from low-priced imported furniture. About 125 employees lost their jobs when the mill closed.

Hoping to revive the business, Joshua Tardy, a lawyer and the Maine House minority leader, and Dana Connors, president of the Maine State Chamber of Commerce and former state transportation commissioner, secured enough funds for its purchase and began manufacturing under the new name of Moosehead Furniture later in 2007. Two years later, however, they found they did not have the capital to weather the poor economy. They, too, shut the doors, sending about 30 employees back on the unemployment rolls.

When they did that, Machias Savings Bank, the primary lender for the new business, placed the property and equipment up for auction. Just seconds before the auction was to have begun in January, it was announced that Tardy and Connors had filed Chapter 11 bankruptcy proceedings. That stopped the auction and allowed the partners to work with the tribe.

“We are certainly in very active discussions with a third party with the objective of re-opening the plant and moving forward,” Tardy said Tuesday.

Now that the Legislature has completed its work for the session, he said he plans to dedicate significant time working to save the furniture company. “These are active and daily discussions and there’s still a lot of work to be done,” he said.

Regardless of the outcome, Tardy said, Machias Savings Bank has been “extremely cooperative and understanding of our situation.” The business is still in Chapter 11 proceedings in bankruptcy court.

Lt. Gov. Joseph Socobasin of the Passamaquoddy Tribe said the tribe is working on a purchase-sale agreement to stop the bankruptcy proceedings. In anticipation that a purchase could be made, the tribe has applied for about $500,000 each from the U.S. Department of Agriculture and the Maine Department of Economic and Community Development. In addition, private funding is being sought, he said Tuesday.

Since the tribe qualifies as a minority, Nicholas said it would work to secure federal contracts for the manufacturing process, as it does for its business Creative Apparel, which has plants in several Maine towns.

Nicholas said Washington County, where the tribe is based, and Piscataquis County are very much alike. Both have high unemployment and have lost considerable industries.

“Our Maine reservation is over in Princeton, but that doesn’t mean that we’re not all affected some way by downturns in government and unemployment,” Nicholas said. He said the tribe tries to target areas that have all the tools to make a plan work, which Piscataquis County appears to have.

In Princeton, Nicholas said the tribe is looking to establish a pellet plant and cogeneration plant. He said the tribe has taken an option on property in the community. “We’re looking at some economic ventures, and something is going to happen soon,” he said.

The due diligence process is in effect there, but the Monson project is a bit farther ahead, he stated.

Nicholas also said the tribe was not neglecting its home county. It’s high stakes bingo facility in Indian Township is being renovated and the tribe is working with the state on some options to go with the high stakes games. He did not identify what those options are.

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