June 21, 2018
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East Millinocket leaders express confidence that mill will restart

By Nick Sambides Jr., BDN Staff

EAST MILLINOCKET, Maine — Town leaders promised to limit spending as much as possible and expressed confidence Monday that the Main Street paper mill — the town’s largest single taxpayer — would rebound from a production stoppage that began last week.

Town Administrative Assistant Shirley Tapley said she planned to contact Great Northern Paper Co. LLC officials within the next few days to inquire about the company’s plans, including in regard to its outstanding $657,900 in property taxes, which includes $328,950 that was due in November. The rest is due next month.

The Board of Selectmen agreed to shelve a proposal to give town government’s 19 workers $1,000 raises when the new fiscal year begins July 1. Tapley and school Superintendent Quenten Clark said they would begin reviewing their budgets to see where additional savings might be found.

“I am confident in them,” board Chairman Gary MacLeod said of GNP and its parent company, Cate Street Capital, after Monday’s selectmen’s meeting. “We are watching what we are doing. We have to keep our eye on what is in front of us.”

“I have complete confidence that they will come through,” Tapley said. “At their first-year anniversary [of reopening the paper mill, in 2012], they said they were here for the long run. They haven’t done anything that would make me doubt that.”

Great Northern Paper announced Thursday that it would stop production at the paper mill for as many as 16 weeks. It said the company and its parent face significant challenges in producing newsprint and torrefied wood.

Thermogen Industries LLC, another Cate Street subsidiary, had said it planned to produce torrefied wood at the former Millinocket paper mill starting as early as fall 2014.

Company spokesman Scott Tranchemontagne said the company would spend the next several weeks working to improve the mill’s energy efficiency and planning for the future. He said it was impossible to predict, with a business plan not yet completed, whether the company’s 256 workers would be laid off once they finish two months of energy efficiency work.

The company, which had fallen behind on its payments to vendors, also will work toward paying its suppliers, Tranchemontagne has said.

The tone of Monday’s meeting was somber and businesslike. Selectmen reviewed the Cate Street situation with Clark and school committee Chairman Dan Byron, who attended as spectators, as one of several items on the agenda. About a dozen people were in the audience.

Left largely unspoken was a giant “what if” — what if the paper mill doesn’t restart? What if it defers its property tax payments?

MacLeod said such questions were useless, at least until GNP’s plans were better known.

“You can’t stand here and do the what-ifs. You just have to focus on what is in front of you,” he said. “You never know what’s ahead. Everything [in the paper industry in general] could change in two weeks.”

Tapley said she has not communicated with the company since Thursday’s announcement. She described the company’s delay in paying property taxes as routine for Cate Street. The company’s payment for the first half of 2012-13 was paid about a month late, in December 2012, while its second-half payment was made in August, about six months late.

Tapley expressed confidence that the town’s cash reserves were solid enough to withstand short-term payment delays on Cate Street’s part.

“I don’t foresee any cash-flow problems,” Tapley said.

Selectman Clint Linscott expressed confidence in the company, saying Cate Street had been an outstanding corporate neighbor, always keeping its word and being superb to work with.

Byron said the school committee would discuss the mill situation when it meets on Feb. 4.

Lee Powers, a Public Works Department employee who was in the audience, said after the meeting that many residents were nervous about Cate Street’s future. But problems at the mill have been common during his 17-year career as a town worker, he said.

“This is the third or fourth time that this has happened,” Powers said during the meeting. “There’s a lot of gloom and doom out there.”

In 1997, the town began three years of government spending cuts that dropped its budget by 12 percent. In 2002, one of the mill’s previous owners filed for bankruptcy, he recalled.

Millinocket’s mill closed about five years ago and the Main Street mill shut down for several months before Cate Street reopened it.

“There isn’t much more to say than gloom and doom,” Powers said. “You hate to see things go [away or close forever], but the world does have to continue.”

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