MILLINOCKET, Maine — The town has filed a lien against the company that owns a local paper mill seeking $2.24 million in delinquent property taxes, a move that could affect the company’s plan to auction off the shuttered facility’s only remaining paper machine, an official said Tuesday.
The Uniform Commercial Code lien, filed with the Maine and Delaware secretaries of state May 21, includes $2,171,333 in unpaid property taxes and $76,428 in interest and filing costs Great Northern Paper West owes, according to a press release issued by Millinocket Town Manager Peggy Daigle. The GNP West property includes the No. 11 paper machine and other equipment on the paper mill site.
The lien gives the town first priority position to collect its taxes. It states the relocation, removal or any effort to “otherwise adversely impact or sell the property” must comply with the commercial code, according to the press release.
“Basically removal of personal property, contrary to the notice filed and posted by the town, is theft,” the release states.
It was not clear whether the lien would prevent the auction of the No. 11 machine and related equipment scheduled at the East Millinocket GNP mill June 19. Daigle referred comment on the lien’s impact on the auction to the town’s attorneys, who did not immediately return a telephone call late Tuesday afternoon.
Maine Secretary of State Matthew Dunlap did not immediately return messages Tuesday. GNP manager Cate Street Capital of Portsmouth, New Hampshire, might issue a statement later Tuesday, Maine company spokeswoman Elizabeth Baldacci said.
In addition to GNP West and Cate Street, notices of the lien were sent to the auction company, Koster Industries of Farmingdale, New York, and Andover, Massachusetts, conducting the sale of the personal property at the GNP West operations, as well as Jackson Demolition of Schenectady, New York, which is conducting the demolition of the mill property.
Cate Street is the investor that bought the East Millinocket and Millinocket paper mills for $1 in September 2011 and established GNP and Thermogen Industries, the company that has proposed replacing the paper mill with a $140 million pellet mill in the Katahdin Avenue industrial park. The Millinocket mill never reopened after being purchased by Cate Street.
It was not immediately clear whether the action signals the town’s willingness to take ownership of the No. 11 paper machine or the site.
Town Council Chairman Richard Angotti Jr. said last week town leaders never seriously considered having the town buy or otherwise assume ownership of the paper mill. That would eliminate the approximately $2.3 million in revenue the town draws from the site. The machinery’s maintenance costs would be exorbitant, and state leaders have typically handled the sale or remarketing of paper mill sites.
GNP pays Millinocket about $2.3 million annually in property taxes. The UCC lien precedes the filing of a real estate lien on the remainder of the unpaid taxes the company owes the town. The real estate lien will address land and buildings GNP owns, the press release states.
The town’s attorneys will send a 30-day notice of the pending real estate lien to Cate Street. If payment is not made within the 30-day notice period, a lien will be filed at the Penobscot Registry of Deeds in Bangor, the release states. The release did not say when the notice will be sent.
Workers at the registry of deeds offices said they haven’t received the UCC lien. The UCC is a comprehensive set of laws governing commercial transactions between U.S. states and territories, according to the Small Business Association website.
East Millinocket administrative assistant Shirley Tapley said the town’s Board of Selectmen hasn’t determined whether to file a lien seeking $657,900 in delinquent property taxes GNP owes the town for the 2013-14 fiscal year.
GNP owes its creditors, the towns and the Internal Revenue Service at least $6.8 million in taxes or unpaid bills. Cate Street must pay its outstanding property taxes before it can collect a $16 million Finance Authority of Maine loan approved last month for the company’s pellet mill proposal.
Cate Street is expected to divulge its plans for the mill and for the restart of the East Millinocket paper mill, which has been shut down since January, any day now. Millinocket leaders acknowledged the awkwardness of filing liens against a company promoting a mill operation as promising as Thermogen’s, but ”conflicting information has caused concern from the town council.”
“The overriding issue that remains to be addressed is the municipal officials concern for the taxpayers who live in Millinocket and expect the town to function and provide necessary services to all the citizens,” the press release states. “Once the taxes are paid, all liens will be released by the Town, without prejudice.
“The Town Council recognizes that taxes paid by the residents, businesses and industries is the price one pays to live in an organized and civil society.”