State backing of wood pellet mill brings hope to some Millinocket area businesses, others remain skeptical

Barbara Van Loon and her husband Paul have been enduring slow business at their Soup to Nuts restaurant in East Millinocket but said that they hope the area's planned torrefied pellet mill will turn around the area's economy.
Nick Sambides Jr. | BDN
Barbara Van Loon and her husband Paul have been enduring slow business at their Soup to Nuts restaurant in East Millinocket but said that they hope the area's planned torrefied pellet mill will turn around the area's economy. Buy Photo
By Nick Sambides Jr., BDN Staff
Posted Oct. 18, 2013, at 6:42 p.m.

MILLINOCKET, Maine — It will help.

That was how Katahdin region businesses enduring a depressed local economy reacted Friday to news that the state is backing a $69.8 million pellet mill that could bring as many as 220 direct and indirect jobs.

“It is a good industry that fits right in with what we already have — all that timber on the end of the Golden Road, and all the skilled workers we have here at dealing with wood,” said Galen Hale, co-owner of the Nicatou Stove Shop in Medway,

“We’re very pleased and in great hopes that it will help the community,” said Mike Murphy, a salesman at Katahdin Motors of Millinocket.

“I think it is a great thing for the area and it is really needed,” said Steve Cullen, owner of Levasseur’s True Value Hardware and Building Supply of Millinocket.

Cate Street Capital of New Hampshire plans to build a $35 million machine at the Katahdin Avenue industrial park to make torrefied wood pellets, a cleaner-burning coal substitute, for domestic and European power plants seeking to meet stricter air-quality standards.

T he Finance Authority of Maine voted 8-5 on Thursday to approve a $25 million bond for the project. If Cate Street assembles the rest of its financing, mill construction could begin during the winter and finish in 12 months. The facility will employ 36 people directly and as many as 184 indirectly, state officials have said.

Cate Street leaders hope the machine will be the first of five in Millinocket and three in Eastport. If the plan is successful, state officials predict the creation of as many as 1,500 new jobs across northern Maine and a game-changing boost to the state’s forest products industry.

Several business owners declined to be interviewed Friday, saying they hoped Cate Street’s promise would be fulfilled but wanted to see what happens before they talked about it. Millinocket Town Manager Peggy Daigle said she found such skepticism understandable.

“They are guarded,” Daigle said. “There have been a lot of unfulfilled promises made here over the years as far as what the mills could be and what they became.”

Brookfield Asset Management shut down the Millinocket paper mill in September 2008, ending a century of papermaking in the northern Penobscot County town. Cate Street bought that and the East Millinocket mill in September 2011. East Millinocket’s mill restarted, but Millinocket’s remains dormant, with most of its key components sold for scrap.

“I think a lot of [mill workers] here have learned to do other things since the mill closed,” Hale said. “I think they know that the [paper industry] won’t ever provide the kind of jobs that it did.”

A pellet salesman himself, Hale said he believed Cate Street’s plan represents the kind of innovation and economic diversification the region needs and his family typifies. Residents of the region since the 1830s, the Hale family owns or recently has owned a metal scrap yard, a tour guide business, apartment building and the stove shop.

“The area needs to look to do what it needs to do to survive,” he said. “It needs a mix of manufacturing, paper industry, tourism — whatever creates jobs.”

The area’s increasingly economically challenged and elderly population makes business difficult, said Paul Van Loon, owner of Soup to Nuts restaurant in East Millinocket.

“Since the tourists have left, it has been horrible,” Van Loon said. “There is nobody coming back to replace the tourists. We have faced a declining population and lately it has been declining rapidly, if you look at the obituaries. Families don’t come to visit their elders and take them to lunch as often.”

Cate Street’s investment and the beginning of its first machine’s construction will attract other businesses, Daigle said.

“The town will have the ability to say that we have this business coming in, and we can see what other businesses can grow out of that,” she said.

But even if Cate Street’s dream of eight machines each employing a total of 125 people comes to fruition, Millinocket will probably have to continue its plans to scrap unnecessary housing and cut government and school spending, Daigle said.

http://bangordailynews.com/2013/10/18/business/state-backing-of-wood-pellet-mill-brings-hope-to-some-millinocket-area-businesses-others-remain-skeptical/ printed on April 17, 2014