AUGUSTA, Maine — The Finance Authority of Maine last week approved roughly $16 million in tax credits for two groups making investments related to Great Northern Paper Co.’s mill in East Millinocket. FAME also approved a $300,000 loan for a Maine boat builder.
FAME claims in a media release the two decisions are “expected to help create and retain 448 Maine jobs” combined, although a breakdown of how many new jobs would be created vs. existing jobs retained was not available Friday.
FAME’s Board of Directors at its meeting on Dec. 20 approved the reward of nearly $16 million in tax credits to two community development entities — Stonehenge Community Development LXI LLC and Enhanced Capital New Market Development Fund X LLC — for their investments in the Great Northern Paper mill in East Millinocket.
Enhanced Capital received a tax credit certificate for $8,125,260, while Stonehenge Community Development received a tax credit certificate for $7.8 million, according to FAME’s media release.
The tax credits are the first to be granted under the FAME-administered Maine New Markets Capital Investment Program, according to Chris Roney, FAME’s general counsel.
The program provides state tax credits of up to 39 percent to investors in qualified community development entities, such as Stonehenge and Enhanced Capital, that reinvest in qualified businesses in eligible low-income communities in Maine. The 125th Maine Legislature created the program and modeled it after the federal New Markets Tax Credit Program.
The two community development entities, which are both from Louisiana, each invested about $20 million in GNP’s East Millinocket paper mill, Roney said. So the tax credits they received were 39 percent of those investments.
The capital investment program has a total investment cap (not tax credit cap) of $250 million, Roney said, which means the program could cost taxpayers $97.5 million in tax credits.
After the program was established on Jan. 1, six community development entities, including Stonehenge and Enhanced Capital, applied for allocations and each received approval to invest up to $62.5 million to access the available tax credits. Entities have two years to find qualified investments to access the tax credits. Stonehenge and Enhanced Capital were the first to make eligible investments and access their credits.
FAME claims the investments in the East Millinocket paper mill will help “to create and retain 309 jobs,” but details about job creation or retention were not available Friday.
At its meeting on Dec. 20, FAME’s board also approved a $300,000 loan to Hodgdon Shipbuilding LLC. The company, which has been building yachts in East Boothbay since 1816, will use the funds to build what’s called a limousine tender to show off at trade shows around the world. A tender is a vessel that provides service or support to sailboats, yachts and cruise ships; a limousine tender is a more luxurious tender that services mega-yachts.
The loan carries an interest rate of 5.25 percent and is part of FAME’s Economic Recovery Loan program, which provides gap financing to businesses, Roney said.
“[Businesses] typically come to us if banks would not, for whatever reason, make them the entire loan amount that they need,” Roney said. “Our job is to promote businesses getting the credit they need.”
Timothy Hodgdon, CEO of Hodgdon Group LLC, said the FAME loan “should lead to increased production and jobs in the state.” Hodgdon was not available for comment on Friday, but according to the release from FAME, the loan “will help the company to create and retain approximately 139 Maine jobs.” Again, details on the breakdown of job creation and retention were not available Friday.