Millinocket, Cate Street leaders working to settle tax debt

Posted June 06, 2014, at 6:26 p.m.
Millinocket Town Council Chairman Richard Angotti Jr. (left), Town Manager Peggy Daigle (center) and Cate Street Capital President and CEO John Halle emerged from an executive session at the Millinocket town office on Friday.
Millinocket Town Council Chairman Richard Angotti Jr. (left), Town Manager Peggy Daigle (center) and Cate Street Capital President and CEO John Halle emerged from an executive session at the Millinocket town office on Friday. Buy Photo

MILLINOCKET, Maine — Cate Street Capital leaders worked to negotiate a tax settlement and discussed their economic development plans with town officials on Friday in a closed-door session that both sides called productive.

“It was a great conversation,” Cate Street President and CEO John Halle said after the 2¼ hour executive session on Friday. “It was about our relationship.”

“We came out agreeing to try to work this out in a spirit of cooperation,” Town Manager Peggy Daigle said. “They are an integral part of our economic future.”

Daigle said the private discussion was allowed under the state Freedom of Access Act. Title 1, chapter 13 of the Maine law includes a clause that states that executive sessions can be held for discussing the possible acquisition of personal property or real estate or where such public discussions might result in the divulging of confidential information.

The attendees declined to provide details of the discussion.

Millinocket officials announced May 27 that they had filed a lien seeking $2.24 million on May 21 from Great Northern Paper Co. LLC, a company Cate Street formed after it bought the East Millinocket and Millinocket paper mills for $1 in 2011. Cate Street also formed Thermogen Industries to launch a $140 million specialized wood pellet mill at the industrial park Great Northern Paper owns in Millinocket.

Great Northern Paper owes Millinocket about $2.3 million and East Millinocket about $657,900 in delinquent property taxes for the 2013-14 fiscal year, which lapses June 30. The largest single taxpayer in East Millinocket and Millinocket, Great Northern Paper owes at least $6.8 million in unpaid taxes and other debts, according to a liens listing at the Penobscot County Registry of Deeds.

No new liens had been filed as of Friday.

The company, which said the Millinocket lien interfered with its economic development plans, is scheduled to auction its papermaking equipment at the industrial park later this month.

Millinocket’s lien remains in place. Town officials have no plans to pull it as of yet. They will seek the rest of the money Great Northern Paper owes the town in another lien that will be filed before mid-July, when the final payment deadline on delinquent real estate taxes lapses, Daigle said.

East Millinocket officials have said they are considering filing a lien.

Daigle defended the filing of the lien at the time it was announced as an act of basic fairness, especially in light of the town’s aggressive pursuit of delinquent residential property taxpayers since last summer. That’s when Great Northern Paper’s failure to pay its 2012-13 property taxes created a cash crisis for town government that also caused town officials to file liens. Great Northern Paper paid up several months overdue.

Halle and Cate Street spokeswoman Alexandra Ritchie declined to comment Friday on when construction would start on the pellet mill and when the East Millinocket mill would restart. The mill shut down in January, and 212 of its 256 workers were laid off on Feb. 6. Company officials said on the day of the layoff that they hoped to restart the mill in 16 weeks, a deadline that lapsed last month.

“We had a very productive conversation about moving forward collaboratively and positively,” Ritchie said.

Friday’s meeting followed a council executive session in Augusta on Wednesday with Gov. Paul LePage and his economic advisors that Cate Street officials attended. Adrienne Bennett, LePage’s spokeswoman, amended an earlier statement to say that LePage had attended part of Wednesday’s meeting.

Under state law, the governor is allowed to meet in executive sessions without restriction. However, governmental bodies such as the council are prohibited from doing business during those meetings.

 

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