MILLINOCKET, Maine — Town leaders will meet Monday to discuss amending their agreement with Great Northern Paper Co. to allow GNP to pay its overdue property taxes more quickly, Town Manager Peggy Daigle said Friday.
Daigle said the Town Council will hold a special meeting at 3 p.m. Monday. That’s the same day they hope auctioneer Koster Industries will pay the town with proceeds from a June 19 auction held to allow Great Northern to resolve personal property tax liens filed against it by the Internal Revenue Service and the town, she said.
Daigle will suggest that councilors amend the auction agreement guaranteeing Millinocket payment by removing a step from the process that would allow Koster “to pay a net number to us that we are owed and not the gross number,” Daigle said.
As of Friday, Great Northern Paper Co. owes Millinocket a total of $2.26 million in gross taxes. That figure includes $2.17 million in personal property taxes for the equipment it has at its Katahdin Avenue industrial park, $92,462 in accumulated interest as of Friday plus a $10 fee paid to the Maine secretary of state’s office.
The industrial park operates within a tax-increment finance agreement that requires Millinocket to return half of the $2.17 million property tax, or $1.08 million, to GNP annually, Daigle said.
The amended agreement would eliminate Millinocket officials’ collection of $2.17 million. Instead, they would agree to accept their net amount of taxes, $1.17 million, plus the interest and $10 fee, Daigle said.
The $1.17 million “is the net of what we are owed and what we would be getting in any event,” Daigle said Friday. “It just cuts out the step of them paying out the gross number,” which Millinocket would be required to return anyway.
Koster officials have told Millinocket’s attorney, Rob Crawford of Portland, that they have been collecting auction proceeds from buyers but that the process is time-consuming. The purchasers include Asian businesses arranging currency exchanges and others paying for purchased goods in installments, Crawford and Daigle have said.
The amendment will allow Koster to “take care of us sooner rather than later,” Daigle said. “Once we get paid, we are done.”
The auctioneer originally said it hoped to pay Millinocket on the day of the auction and had assured Crawford of payment by Friday. Koster officials declined to comment and Alexandra Ritchie, spokeswoman for GNP manager Cate Street Capital of New Hampshire, did not return a request for comment.
Millinocket charges GNP $467 per calendar day in interest on its overdue property taxes, Daigle said.
A tax incentive program for economic development available to all Maine local governments, a TIF permits a municipality to use some or all of the new property taxes that result from an investment project within a designated district to assist in that project’s expenses and also generate economic development funds for the municipality.
A TIF allows a town to “shelter” or keep the new valuation’s revenue from state and county governments, so long as the money not absorbed by state government is invested locally back into the project or economic projects that benefit the town.