April 22, 2018
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Potential Katahdin paper mills buyer has new proposals to share

By Nick Sambides Jr., BDN Staff

MILLINOCKET, Maine — A San Francisco investment firm seeking to buy two Katahdin region paper mills for $1 has new proposals it hopes to share Thursday with leaders from the mills’ towns, officials said Wednesday.

Katahdin Paper Co. LLC mill manager Michael Reider invited East Millinocket and Millinocket town and school leaders to meet with officials from Meriturn Partners at the mill’s guest house at 10 a.m. Thursday, Town Manager Eugene Conlogue said.

“We have not been given any details [of the new proposals],” Conlogue said Wednesday. “They just told us this morning, so I am putting the word out now.”

Lee C. Hansen, the Meriturn entrepreneur leading the company’s effort to buy the mills, did not immediately return messages seeking comment on Wednesday.

Meriturn signed a letter of intent Feb. 11 to purchase the former Great Northern mills from Brookfield Asset Management of Toronto by April 29 if several conditions are met. East Millinocket and Millinocket town leaders said Meriturn seeks a $48 million tax break over 10 years from both towns and would buy the mills for $1.

Meriturn also plans to invest in the mills, town officials said Tuesday, but those details have not been made available. If the deal collapses, Brookfield will close the East Millinocket mill on April 22.

A potential but still vague clue as to Meriturn’s intentions Thursday might be that Reider specifically asked that Union 113 Superintendent Quenten Clark and Millinocket school Superintendent Kenneth Smith attend the meeting, Conlogue said.

Conlogue said he did not want to speculate as to what their inclusion might mean.

“I don’t like to get out ahead of the parade on a negotiation because it is a private matter initially and we have to have the confidence of the other party,” Conlogue said. “You can create false expectations if you put too much info out there [initially]. You can create false expectations and you end up drawing criticism for them.”

“You need to keep negotiations mostly private, which helps you with a good give and take between the parties. Once you have a final product, then you can sell one product and not several versions of it,” Conlogue added.

Yet, like East Millinocket town leaders did with a public hearing they held on Monday, Millinocket’s leaders feel obliged to disclose what they can of the negotiations in a timely manner, Conlogue said.

The Millinocket Town Council will meet at 4:30 p.m. Thursday and will likely discuss what it can of Thursday morning’s session with Meriturn. Due to the calling of Thursday’s meeting, the executive session councilors planned to have with Meriturn at 3:30 p.m. Thursday has been canceled, Conlogue said.

The towns’ leaders meeting with Gov. Paul LePage on Tuesday did provide some hope of state aid to both municipalities that would cushion them from the sudden drop in valuation that would occur if both towns accepted Meriturn’s initial proposal, Conlogue said.

State laws allow for increases in state revenue sharing and aid to schools, and decreases in county tax commitments, in the event of sudden valuation drops, but exactly how much aid the towns would get is unclear, Conlogue said.

“We are trying to develop some figures that I would say are not yet ready for prime time,” Conlogue said. “They certainly fall well short of the amount of money we would lose in tax revenue based on the current Meriturn tax proposal.”

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