Cate Street plugs pellet mill proposal, promises to pay overdue taxes

Cate Street Capital project manager Dammon M. Frecker speaks at a Millinocket Town Council meeting during his slideshow presentation on Thursday.
Cate Street Capital project manager Dammon M. Frecker speaks at a Millinocket Town Council meeting during his slideshow presentation on Thursday. Buy Photo
Posted April 10, 2014, at 7:44 p.m.
Last modified April 11, 2014, at 8:58 a.m.

MILLINOCKET, Maine — The developers of a $140 million pellet mill slated for the Katahdin Avenue industrial park gave a preview of its plans to town leaders Thursday and promised to pay the $2.3 million in property taxes its firm owes the town within three months.

Cate Street Capital project manager Dammon M. Frecker received a cordial but wary response from the Town Council and about 60 residents when he talked about Cate Street subsidiary Thermogen Industries’ plans to employ about 55 people in a pellet mill the company plans to open in summer 2015.

Town Councilor Michael Madore said he was skeptical of Cate Street promises.

“We have heard so many start times over the past three years,” Madore said Thursday. “I think there is a definite air of frustration. It’s kind of like being told so many times that something is coming, that it becomes something like ‘fooled me once, shame on you; fooled me twice, shame on me.’”

Frecker reiterated earlier Cate Street statements that the company’s success in building the pellet mill, which would sell pellets to British and European electricity producers eager to find a cleaner-burning alternative to coal, depends on a $25 million loan guarantee the Finance Authority of Maine voted to give Thermogen in October.

FAME is due to re-review the project next week in response to Cate Street’s March 6 announcement to build its plant with technology provided by Zilkha Biomass Energy of Houston, Frecker said.

Cate Street hopes FAME will approve the technology change next week. If that happens, closing on the financing and the 30-day appeal period FAME allows for its decisions will make construction possible in June or July, Frecker and company spokeswoman Alex Ritchie told the council.

The company opted against using technology provided by a Scottish firm because Zilkha’s steam-exploded pellet manufacture promises greater production with a more proven technology, Ritchie said.

With Zilkha, Thermogen can do in 12 months what had been promised in 36 months, she said.

Already miffed at a lack of communication from Cate Street over the last several months, Town Council Chairman Richard Angotti Jr. and other councilors said they would like to get regular information from Cate Street. He and other town leaders found it jarring that Cate Street announced the technology change to FAME before FAME’s Feb. 20 meeting without telling the council.

“The long periods of nothing breeds rumors,” Councilor Richard Theriault said. “You see that in the papers. You guys are getting beat up.”

“I want to make sure that you will continue to keep the town abreast of what’s been going on with this project,” Councilor Gilda Stratton said.

“I would like to see us get our tax money. You guys have the authority not to reissue that permit if you don’t get your tax money,” resident Anita Mueller said. “We also want you to be able to finish the project. We are hoping that DEP will do its due diligence.”

The Maine Department of Environmental Protection is required to ensure that companies have the financial backing to finish projects the agency permits, Frecker said.

Four primary wood suppliers in the area have promised Thermogen the ability to handle the significant increase in volume promised by the project, said Ned Dwyer, who manages the Cate Street mill in East Millinocket.

Officials in Crockett, Texas, where Zilkha has a test facility, and Selma, Ala., where Zilkha purchased a 500,000-metric-ton-per-year plant at a bankruptcy auction in May 2010, also gave the company high marks. The Selma mill is due to be commissioned in late 2014 as a 275,000-metric-ton-per-year plant, the company’s first full-scale commercial mill, according to its website.

Cate Street also is negotiating a revenue-sharing deal with Brookfield Asset Management over the electricity Brookfield generates with its dams and some equipment at the East Millinocket paper mill owned by Cate Street subsidiary Great Northern Paper Co. Gov. Paul LePage signed on Monday a new law clearing the way for the deal, state officials said.

Cate Street said the revenue is vital to its plans to restart the paper mill and restore about 200 jobs.

Brookfield attorney Harold Pachios said Thursday that his client had responded to the latest proposal from Cate Street but declined to say the response.

 

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