East Millinocket to brief residents on mill deal

Posted March 06, 2011, at 9:54 p.m.

EAST MILLINOCKET, Maine — Town leaders will hold their first public hearing Monday on Meriturn Partners’ proposal to buy the Main Street paper mill and the deal’s possible impact on the town.

The 6 p.m. hearing at Schenck High School will allow residents to get the latest news on the possible transaction — or at least as much as officials can say, with the talks just starting — and help their leaders find the best way forward, said Mark Scally, chairman of the Board of Selectmen.

“It’s a hearing for the public,” Scally said Sunday. “We want to hear what the public has to say. How do they feel about this? What hasn’t been spelled out are the scenarios. If this [deal] happens, what would the results be?”

“There are people out there that are sure to have some ideas that we have not come up with,” Scally added. “Once they [residents] have all the data we have, they might come to understand what we are up against and come up with ways that we can get through this.”

Selectman Mark Marston said he was “cautiously optimistic” going into Monday’s hearing.

“There are going to be some big concessions that have to be made if this is going to work,” Marston said Sunday. “I am not really sure. This is just the first round of negotiations. Where this is going to be when we settle on everything, I don’t know.”

Meriturn signed a letter of intent Feb. 11 to purchase the Millinocket and East Millinocket mills from Brookfield Asset Management of Toronto by April 29 if several conditions are met. East Millinocket and Millinocket town leaders disclosed Tuesday that Meriturn seeks a $48 million tax break over 10 years from both towns and would buy the mills, which Meriturn partner Lee C. Hansen said have lost money for years, for $1.

Scally called the initial Meriturn offer “a joke,” one that would likely lead to town and school layoffs and a vast curtailment of local services, but he and Millinocket Town Manager Eugene Conlogue said their towns’ leaders are considering it. Negotiations will continue this week.

If the deal collapses, Brookfield said it would shut down the East Millinocket plant April 22 with 450 jobs presumably lost.

Gov. Paul LePage’s spokesman has already said that the state would not directly intervene to help the towns cope with the massive reduction in tax payments Meriturn seeks, but the governor is scheduled to meet with Katahdin leaders on Tuesday in Augusta to discuss the possible purchase.

Millinocket’s Town Council will hold an executive session on the offer at 3:30 p.m. Thursday. A regular meeting will follow, then another closed-door session, Millinocket Town Clerk Roxanne Johnson said.

Monday’s meeting, Scally said, would concern the most immediate tenets of Meriturn’s proposal. In Meriturn’s proposal, the East Millinocket mill’s tax bill would decline from $2.1 million to about $46,800 starting in the 2011-12 fiscal year, which begins July 1.

“I can say for the town that there will be a major restructuring of departments if this goes through,” Scally said. “I have some ideas on how we can work to soften the blow and I will put them by the other selectmen. A lot of us have spent a lot of sleepless nights trying to find ways to cut without hurting services.”

Selectmen would not likely discuss Saturday’s disclosure that Meriturn seeks a $2 per hour pay cut, the loss of vacation time and some seniority as part of a five-year contract they would propose to the two mills’ unions, as that’s a union, not town matter, Scally said.

“Unless the union guys bring it up,” Scally said.

Ultimately, selectmen will vote on whether East Millinocket should accept any Meriturn proposals, Scally said.

They will, however, hold public hearings before any votes and take straw polls of residents in attendance, he said.

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