State gets 90 days to find buyer for Katahdin mills

By Nick Sambides Jr., BDN Staff
Posted April 29, 2011, at 4:06 p.m.

AUGUSTA, Maine — State officials have 90 days to find a buyer for two Katahdin region paper mills before their Toronto-based owner begins decommissioning them.

Gov. Paul LePage announced Friday that Brookfield Asset Management Co. had granted the state a final extension of its decommissioning deadline to July 31, but East Millinocket officials said the mill on Main Street could not be dismantled yet in any event because the town still has a $2.17 million tax lien on it.

Brookfield made a partial payment covering almost all of the debt last week. Town officials were waiting Friday for the check to clear and said that Brookfield still owes about $18,778 on its 2010 tax bill, plus some slight and accumulating interest. Company officials had promised to pay the remainder this week.

“This gives us additional time to work on securing a qualified buyer,” LePage said in a statement Friday. “Brookfield has been generous with their extensions, and this shows the commitment the company has to finding a solution that will keep jobs in the region.”

Mark Scally, chairman of the East Millinocket Board of Selectmen, scoffed at the idea that Brookfield was being generous. He doubted that decommissioning would have begun anytime soon had the extension not been granted.

“Come off it,” Scally said Friday. “This is a multibillion-dollar corporation. They are not flying by the seat of their pants. They know what they are doing.”

“By not paying the lien, I don’t think they are worrying about disassembling plants yet,” Scally added. “It seems to me that they didn’t give that concession because they thought they were giving a concession. It wasn’t on their radar screen right now. They have other things on their minds. What, we don’t know.”

Brookfield describes itself as a global asset manager focused on property, renewable power and infrastructure assets with more than $100 billion in assets under management, including several hydroelectric dams on the Penobscot River near the East Millinocket and Millinocket mills, according to its website, brookfield.com.

LePage met with Brookfield officials this week and said he got the extension with the understanding that the state will start assuming management of a landfill in the Dolby section of East Millinocket used by the mills.

Brookfield officials had not specifically stated when the dismantling process would begin, but noted that they had a tentative agreement that gave Meriturn Partners until Friday to buy the mills if certain conditions were met, including relief from all liability associated with the landfill.

The San Francisco investor backed out of its tentative agreement on April 8 to buy the mills, citing a failure to meet its goals and the fact that some of the East Millinocket mill’s customers had begun seeking other vendors for mill products, including newsprint and telephone directory paper. About 450 workers were laid off. The Millinocket mill closed in September 2008, idling about 150 workers.

LePage will meet with officials from Millinocket and East Millinocket in the area on May 3 to stress the critical nature of the final extension, he said.

“We need to all come to the table with the best interest of the people in the Katahdin region,” LePage said. “I am committed to doing everything I can for the state in order to create jobs.”

Since the East Millinocket mills’ shutdown on April 1, Katahdin Paper Co. LLC workers have begun divesting the mill of its stockpiles of wood, papermaking chemicals and other equipment, but not its large papermaking and recycling machinery.

Company officials’ disclosure that they had begun planning to dismantle the two mills on April 14 drew criticism from town officials that Brookfield was undercutting the revitalization effort. Brookfield officials announced the next day the possible dismantling sometime after Friday, April 29, and said the state could save the mills by buying them for Meriturn’s price — $1.

State officials have yet to act on the invitation.

Scally doesn’t expect the state to buy the mills, but hopes a new buyer will, and soon. He sees a hopeful sign in LePage’s coming to the region, possibly for the first time since his November election, to discuss the situation.

“One would think there would be more to it than what’s already on the press release,” Scally said. “I think we are still alive. I think we are still viable.”

http://bangordailynews.com/2011/04/29/business/dismantling-of-millinocket-area-paper-mills-on-hold/ printed on September 22, 2014