BUSINESS

Meriturn interested in seeing towns’ tax counteroffer in potential mills sale

Posted March 15, 2011, at 2:12 p.m.
Last modified March 15, 2011, at 5:45 p.m.

Lee C. Hansen has a big week ahead of him.

The Meriturn Partners LLC leader hopes to meet with Gov. Paul LePage and state officials regarding an old mill dump that is an obstacle to his firm purchasing for $1 and revitalizing two Katahdin region paper mills. He also plans to meet with a potential investor in a biomass boiler system that would help restart the paper mill in Millinocket, he said Tuesday.

Hansen said he also looks forward to seeing a counteroffer from East Millinocket and Millinocket officials that they said Monday would give Meriturn less than the $48 million in tax breaks over 10 years that the would-be mills buyer originally requested.

“I am always interested in meeting with the [towns’ officials] so long as the meetings are productive,” Hansen said Tuesday. “I will review it immediately and continue the dialogue as soon as possible.”

The East Millinocket Board of Selectmen and Millinocket Town Council ended a nearly 1½ -hour meeting at the former Great Northern Paper Co. guesthouse on Monday night by agreeing to write and fax the plain-language offer to Hansen by Tuesday afternoon.

Mark Scally, chairman of East Millinocket’s board, called the offer “actually more of a way of making what they proposed work and making it legal,” though he did say it would involve a concession by the towns of less than $48 million.

Meriturn signed a letter of intent to purchase the paper mills in East Millinocket and Millinocket from Brookfield Asset Management of Toronto by April 29 provided several conditions were met, including reaching a labor agreement.

Brookfield has said that if the deal collapses it would close the East Millinocket mill on April 22, eliminating about 450 jobs. Restarting the Millinocket mill, which had closed in 2008, would create about 200 jobs.

The unions announced Thursday that they had reached a tentative labor agreement with Meriturn, but no details have been released. A union official on Monday said the unions are awaiting bids from health insurance companies and would not hold a rank-and-file union vote — which would be required before the labor deal is final — until all the bids are in.

State officials and Meriturn have discussed cleaning up or capping the oldest portion of the mill’s landfill in East Millinocket, which the mills used for decades. The landfill has been cleaned up somewhat, but fears persist about pollutants within it and ultimately responsibility for it, officials said.

All sides acknowledge that the landfill could be an enormous liability to anyone who purchases the mills unless it is capped, entirely cleaned up or someone else takes legal responsibility for it. State officials in early discussions about the landfill peg cleanup costs at as much as $10 million, which the state officials said the state might pay for, though nothing has been settled.

The biomass boiler system, meanwhile, would rid the Millinocket mill of its reliance on No. 2 heating oil to generate steam as part of its papermaking processes while also creating about 40 jobs.

Meriturn has received four proposals from biomass system operators, Hansen said.

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