Talks grind on in Katahdin region mills sales

Posted March 28, 2011, at 8:20 p.m.

 

MILLINOCKET, Maine — Town leaders met in an emergency session Friday night to discuss a San Francisco investment firm’s efforts to buy two Katahdin region paper mills for $1.

Town Manager Eugene Conlogue, who has acted as the council’s spokesman, said he could disclose only that the negotiations are continuing.

He said the confidentiality legally afforded such negotiations prohibited release of any details, including why Friday night’s session was private.

E-mailed by Conlogue to councilors, assorted residents and the news media, the notice for the 6:15 p.m. meeting was sent at 5:17 p.m. Friday. The meeting was described as an executive session “to discuss a proposal from Meriturn Partners.”

Under a tentative agreement the company made with the mills’ owner, Brookfield Asset Management, Meriturn has until April 29 to negotiate a property tax agreement with East Millinocket and Millinocket and secure deals on several other aspects of revitalization of the Katahdin Avenue mill in Millinocket and the Main Street mill in East Millinocket.

Those conditions include:

• To secure a favorable solution to problems with an old mill dump in East Millinocket. State and federal officials are working with Meriturn on that part of the deal, which might involve a site cleanup with initial cost estimates of $10 million.

• Negotiate a contract with unions at the East Millinocket and Millinocket mills. The unions await final bids from potential health care providers before rank-and-file members will vote on a contract tentatively agreed to by mill leaders. No date has been set.

• Find a company to run a biomass boiler that would wean the Millinocket mill from the need for oil to make steam as part of its papermaking processes. The mill closed in 2008. Four or five potential biomass operators have made proposals.

• Negotiate an electricity supply agreement with Brookfield, which owns power-generation dams on the Penobscot River near the mills.

To date none of these has been accomplished, though Meriturn representative Lee C. Hansen, who has been in Maine several times over the last three weeks, has reported satisfactory progress.

If the Meriturn deal is made, the Millinocket mill would be reopen, with 120-150 jobs created, and the East Millinocket mill’s 450 positions would be preserved. Brookfield has said it would close the mill on April 22 if no deal is made, though mill operators have said they could be flexible on the closure date if there is progress in the negotiations.

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