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Millinocket leaders to consider suing state over withheld funds

Courtesy photo | BDN
Courtesy photo | BDN
Thermogen Industries, a subsidiary of Cate Street Capital, supplied a rendering of its proposed torrefied wood facility at the Katahdin Avenue paper mill site in Millinocket to the Town Council on Wednesday, April 25, 2012.
By Nick Sambides Jr., BDN Staff

MILLINOCKET, Maine — Town leaders will decide Thursday whether to sue the state over $216,000 in disputed state funds and also hear a New Hampshire investor’s presentation of plans to build a torrefied wood factory on Katahdin Avenue.

Town Manager Eugene Conlogue seeks “final approval” from the Town Council to file a lawsuit, the council’s agenda states. Councilors twice discussed legal action against Gov. Paul LePage and tabled the matter.

Conlogue and council Chairman John Davis could not be reached for comment on Tuesday. LePage spokeswoman Adrienne Bennett has declined to comment on the dispute.

The dispute between LePage and town leaders centers on LePage’s issuing $504,000 in Sudden and Severe Impact funds to Millinocket on March 7 instead of the $720,000 the town is owed. LePage claimed that Millinocket officials would have received more but they broke their pledge to pay $50,000 annually toward the operation of the East Millinocket-based Dolby landfill.

Town officials angrily denied LePage’s claim, which one state leader called “blackmail,” and produced a string of correspondence that showed they never agreed to more than one $50,000 payment. Leaders from East Millinocket, which received its first monthly Sudden and Severe Impact payment in late March, have said they too never agreed to annual payments.

Almost all of the $720,000 would be for school funding. LePage’s interceding in an impact payment for schools is unprecedented, one of the law’s initiators has said.

Councilors are also due to decide Thursday whether to rescind the $50,000 payment offer.

Originally state officials said they sought to allocate $150,000 to landfill operations annually, with East Millinocket and Millinocket contributing $50,000 each in cash or in-kind services annually. The state’s taking ownership of Dolby was crucial to Cate Street Capital’s purchase last fall of the East Millinocket and Millinocket paper mills, which restored about 216 jobs to the region.

Officials from Cate Street subsidiary Thermogen Industries will hold a public information presentation during Thursday’s meeting on their plans to build the first $35 million torrefied wood manufacturing machine at the Katahdin Avenue paper mill site, the agenda states.

Thermogen officials have begun seeking permits with Maine Department of Environmental Protection officials, but not submitted a formal application yet, said Samantha Depoy-Warren, DEP spokeswoman.

They are due to meet Friday with DEP officials in a pre-application meeting, she said. Thermogen officials seem very earnest in their plans and their pre-application meetings, which began in February, will help smooth the application process, she said.

Cate Street officials met in executive session with councilors on April 25 and announced plans to turn the Millinocket site into an industrial park and launch a national marketing campaign to draw industry to the region.

Company officials have said they expect to have the machine operational in the third quarter of 2013. Creating jobs for 22-25 workers directly and dozens of truckers, loggers and other support providers indirectly, the first $35 million TIES machine would supply United Kingdom utilities with biocoal, so nicknamed because it is made of wood but burns at a nearly 1-to-1 ratio with coal, company officials have said.

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