Meriturn mulling new local tax break proposal

Posted March 17, 2011, at 9:08 p.m.

Prospective Katahdin region mills buyer Meriturn Partners LLC is considering a counteroffer from two towns that would give the company a significant tax break if its attempt to buy the mills for $1 succeeds, officials said Thursday.

East Millinocket and Millinocket officials presented the undisclosed property tax proposal to Meriturn during a 1½-hour meeting at the Millinocket Town Office on Tuesday, said Mark Scally, chairman of East Millinocket’s Board of Selectmen.

“All I can really say at this point is that it was an offer we made,” Scally said Thursday. “It was considered and they are going to have their people look at it.”

“After Tuesday’s meeting, we might be closer to an agreement than we were,” he added. “It wasn’t just a monetary thing. It’s a give-and-take.”

Meriturn Partners leader Lee C. Hansen has been in Maine since Tuesday attempting to secure conditions from unions and state and local officials that would lead to a sale. 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.

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 closed in 2008, would create about 200 jobs.

If accepted, the counteroffer would give Meriturn less than the $48 million in tax breaks over 10 years that it originally requested. That could be good news for town officials who have said that the property tax deal would lead to layoffs and significant reductions in government services.

Hansen, who did not immediately return a message left Thursday, is among several moving parts working to see if the mills’ purchase and revitalization can occur. Other players include:

? U.S. Rep. Mike Michaud of East Millinocket, who announced Thursday that the U.S. Department of Labor has certified workers at Katahdin Paper Co. LLC, which operates the mills for Brookfield, as eligible to receive Trade Adjustment Assistance benefits if a mill shutdown occurs.

The TAA program provides job retraining and other aid to workers laid off due to international competition or conditions.

“The entire Katahdin region is facing a very challenging set of circumstances right now,” said Michaud, who represents the 2nd District. “While news of this certification for the workers is positive, I’m hopeful that the benefits are not needed and a reasonable deal between the towns and the buyer can be worked out.”

“I have been in close contact with Millinocket and East Millinocket throughout this process and stand ready to help in any way that I can moving forward,” he added.

U.S. Sens. Susan Collins and Olympia Snowe, both R-Maine, have also pledged to do what they can to help the mills’ revitalization.

? Gov. Paul LePage, who met with Hansen late Wednesday afternoon, said LePage’s press secretary, Adrienne Bennett.

They discussed Meriturn’s need for a biomass boiler to replace oil burners at the Millinocket mill and Meriturn’s hope to be relieved of responsibility for a paper mill dump site in East Millinocket, Bennett said.

“They are still trying to resolve some of the issues,” Bennett said.

The Millinocket mill closed in 2008 due to its need to burn oil as part of the papermaking process. The dump is seen as a huge potential liability for any new owner of the mills, as early dump cleanup cost estimates have run as high as $10 million.

? The mills’ unions, which await bids from potential health insurance providers before voting on the labor agreement union leaders tentatively agreed to last week.

? Potential operators for the biomass boiler system, whom Hansen told town officials he would meet on Wednesday, Scally said.

Meriturn must also set an agreement with Brookfield, which operates several power-generating dams on the Penobscot River, to provide electricity to the mills, Scally said.

East Millinocket officials hope to hold a second public hearing on the potential mill sale soon, Scally said. No date has been set. More than 300 people attended a meeting at Schenck High School on March 7.

“We won’t meet until we have something to report. It would be a waste of everybody’s time,” Scally said.

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