Gouldsboro selectmen to sign letter of intent for cannery grant

Posted Aug. 25, 2010, at 10:44 p.m.
Last modified Jan. 29, 2011, at 12:07 p.m.

GOULDSBORO, Maine — Selectmen here Wednesday reversed their decision not to seek a federal grant in support of Live Lobster Co.’s plans to acquire the Stinson Seafood sardine cannery.

Two weeks ago, selectmen balked when asked to sign a letter of intent to apply for a $400,000 federal grant on behalf of Live Lobster, which wants to buy the plant that closed in April from Bumble Bee Foods. Selectmen have said they want the facility to be used for processing lobster, but do not want taxpayer money to fund Live Lobster’s lobster buying operations. There already are several lobster dealers in Gouldsboro, they said, and selectmen didn’t think it would be proper to use government funds to give a competitor an advantage.

Live Lobster, based in Chelsea, Mass., operates only as a live lobster distributor to Asia, Europe and across the United States. It already has lobster-buying stations in Phippsburg, Rockland, Spruce Head and Stonington.

If it acquires the plant in Prospect Harbor, which would be its first foray into lobster processing, it also would set up a local lobster buying and bait selling operation, officials have said.

On Wednesday, the selectmen reversed their decision and voted 4-0 to sign the letter of intent. They also indicated, however, that they need more information about Live Lobster’s plans and financial status before they can commit to formally applying for the federal community development block grant. The deadline for filing the application with the state Department of Economic and Community Development is Sept. 24.

Antonio Bussone, president of Live Lobster, and state officials attended Wednesday’s meeting to address the selectmen’s concerns. Bussone and Michael Baran of DECD told selectmen the grant could be structured so that it is used only for the capital costs of the proposed lobster processing operation.

“We will not use your money to buy lobsters,” Bussone said. “We need the money to buy equipment.”

Bussone said Live Lobster bought about 10 million pounds of lobster in Maine last year, about 20 percent of which was purchased from other dealers. If the firm sets up shop in Gouldsboro, he said, it likely would buy lobster both from local dealers and fishermen.

Bussone said he expects to spend about $1 million to acquire and install the lobster processing equipment at the now-vacant plant and to spend about $10 million altogether to get the facility up and running. The $400,000 from the grant would be used as a 40 percent down payment to the equipment vendor, he said, and could be paid by the town directly to the vendor, bypassing Live Lobster completely.

Bussone told selectmen he could provide them with blueprints of what the redeveloped plant would look like, a list of equipment it plans to buy for the plant, and the company’s financial statements and tax returns for the past three years. The financial and tax information, he said, has already been provided to the state as part of the purchase negotiations between Bumble Bee and Live Lobster.

“That would be very helpful to us,” Selectman Bill Thayer told Bussone.

About 50 Schoodic Peninsula area residents attended the meeting. A few of them encouraged selectmen to sign the letter of intent so the process could move forward.

Some area residents, however, have suggested that the presence of Live Lobster in Gouldsboro could put other Schoodic area lobster dealers in jeopardy, even if it does breathe life back into the defunct plant.

“My concern is we could lose another 10 to 20 jobs,” Selectman Jim Watson said.

When the sardine operation shut down, 128 people worked at the waterfront plant.

Live Lobster already employs about 80 people, more than half of them in Maine. The company has indicated it hopes to employ up to 40 people at the plant within the first year and as many as 120 by 2012.

Bussone said that the plant probably would have to process 5 million pounds of lobster each year to be financially viable. That amount represents 6 percent of the more than 75 million pounds of lobster that were commercially harvested in Maine in 2009.

Bussone said that, if the town decided not to pursue the grant, Live Lobster would not walk away from its proposed purchase of the plant.

“If [residents] want us here, we’ll do anything we can, even without the $400,000,” Bussone said. “We don’t want to come here to change the culture of the community. We want to be part of it.”

After the selectmen’s vote, Gov. John Baldacci released a statement indicating that he was grateful that selectmen were willing to meet with Bussone and reconsider signing the letter.

“Live Lobster has a solid business plan that will put people back to work and strengthen the economy in the region,” Baldacci said. “While there’s still work to be done, this initial support from the community is critical.”

Dana Rice, chairman of the board of selectmen, and a lobster dealer, attended Wednesday’s meeting but abstained from participating in the discussion and from voting on whether to sign the letter of intent.

But he said afterward that he supported the board’s position.

“I think the board made the right decision,” Rice said.

He said he expects selectmen to revisit the issue of Live Lobster’s plans at the board’s next regularly scheduled meeting at 6 p.m. Thursday, Sept. 2.