Katahdin leaders prep for possible mills sale this week

Katahdin area leaders are meeting Monday to discuss a possible property-tax arrangement with the would-be buyer of the two paper mills.
Kate Collins
Katahdin area leaders are meeting Monday to discuss a possible property-tax arrangement with the would-be buyer of the two paper mills.
By Nick Sambides Jr., BDN Staff
Posted Sept. 12, 2011, at 3:41 p.m.

EAST MILLINOCKET, Maine — Town leaders will meet at 9 a.m. Tuesday to discuss and possibly approve a proposed property-tax agreement with the would-be buyer of the two Katahdin region paper mills.

Mark Scally, chairman of the Board of Selectmen, said the board met for an hour in executive session Monday with three members, enough for a quorum, and teleconferenced with town’s attorney Rob Crawford and town assessor agent Bill Van Tuinen on the proposed agreement.

Scally said he wanted Selectmen Larry MacKenzie and Mark Marston, who could not attend Monday’s meeting, to assess the proposal on Tuesday.

“All we have is a response to the deal that’s been on the table,” Scally said Monday. “We have a response that our team has drafted. I want the approval of the other two that were absent that this is OK to send” to Cate Street Capital.

Depending on how and when Cate Street responds, the tax deal could be tentatively settled as soon as possible, Scally said.

“We have a good feeling and we hope it will all work out,” Scally said. “We want to proceed as one. If you try to sell this deal to the town, it makes it a lot easier if all the selectmen are on board. It is a good deal. I know there will always be skeptics but there are a lot of pluses to it.”

Called Friday by town Administrative Assistant Shirley Tapley, Monday’s meeting was not part of the board’s regular meeting cycle. A paper mill worker among the as many as 450 left unemployed when the Main Street paper mill closed in April, MacKenzie was working at a new job in Greenville and could not make the 4 p.m. meeting. Marston was among region leaders touring the Grindstone Scenic Byway on Monday, Scally said.

Based in Portsmouth, N.H., Cate Street continues to work to finish its deal with Brookfield Asset Management, owner of the East Millinocket and Millinocket paper mills, on Thursday. The company signed a tentative agreement on Aug. 30 to buy the mills for an undisclosed price. Part of the deal is the immediate restart of and a $20 million to $25 million investment in the East Millinocket mill.

Richard Cyr, a senior vice president of Cate Street Capital and possible chief executive officer of the new Great Northern Paper Co., stressed Friday that all conditions of the agreement Cate Street signed with mills owner Brookfield Asset Management must be met by Sept. 15 or the deal would die.

As of Monday, the deal looked on track, said company spokesman Scott Tranchemontagne of Montagne Communications.

Millinocket’s Town Council will meet at 4:30 p.m. Tuesday in a special session to discuss its property tax and TIF arrangements with Brookfield subsidiary Katahdin Paper Co. LLC, with an eye toward preparing for the possible closure of the mills’ sale.

The mills’ unions are meeting Wednesday to vote on a possible contract with Cate Street.

Since the April mill shutdown, the Katahdin region has suffered from a 21.1 to 21.8 percent unemployment rate. The Millinocket mill closed in September 2008, with 150 paperworkers unemployed. April was the first month in about 100 years when the Katahdin region produced no paper.

http://bangordailynews.com/2011/09/12/news/penobscot/katahdin-leaders-prep-for-possible-mills-sale-this-week/ printed on July 30, 2014