Firm pulls $10 million investment in Cate Street’s Millinocket project

Posted July 21, 2014, at 7:22 p.m.
Last modified July 21, 2014, at 10:55 p.m.
Representatives of Cate Street Capital, which plans to fund a pellet mill in Millinocket, listen during a meeting of the Finance Authority of Maine board of directors recently.
Nick Sambides Jr. | BDN
Representatives of Cate Street Capital, which plans to fund a pellet mill in Millinocket, listen during a meeting of the Finance Authority of Maine board of directors recently.

PORTLAND, Maine — The New Jersey-based investment firm CCG Community Partners has withdrawn its $10 million investment in Thermogen Industries in Millinocket for the same reasons a Maine-based investor pulled $20 million in funding earlier this month.

Paul Hoffman, CCG’s managing director, said in an email to the Bangor Daily News that “timing associated with [Thermogen’s] development as well as other factors” led it to rescind its investment offer May 30, “after almost a year of work.”

“We are currently reviewing new investments in Maine that will have a more immediate impact for the residents of Maine,” Hoffman wrote. “Our doors remain open for Thermogen Industries for future investment consideration as the project moves forward.”

Alexandra Ritchie, a spokeswoman for Cate Street Capital, wrote in an email that CCG’s decision is not a reflection of the project.

“These sort of occurrences are par for the course with development activities of this scale, and the Thermogen project remains committed to seeing its development efforts through to fruition and to bringing economic benefit to the Katahdin region,” Ritchie wrote.

She noted the potential for the $140 million project’s economic impact on the region.

“Thermogen has the ability to be the cornerstone of a renaissance for a captive, challenged industrial wood-based rural economy,” Ritchie wrote. “Thermogen is a solid project that, as it comes to fruition, will bring much-needed economic benefits to the entire Katahdin region.”

CCG was one of two investors approved to receive tax credits for its $10 million planned investment in Thermogen in 2012, through its subsidiary CCG Sub-CDE 25 LLC.

The program allows investors in qualified community development entities to receive the equivalent of 39 percent of their investment back in the form of tax credits over a period of seven years.

Representatives from both entities did not initially respond to requests for comment at the time that Portland-based CEI Capital Management rescinded its $20 million investment earlier this month.

CCG announced its withdrawal from the Thermogen project the same day that it decided to invest $30.3 million in an Athens biomass plant adjacent to the Maine Woods Pellet Co.

The funding withdrawal is another hurdle for the project for Cate Street Capital, which after changing the scope of its plans for the Millinocket site still needs to pay taxes it owes to Millinocket, East Millinocket and the Internal Revenue Service. Millinocket was scheduled to receive its final tax payment Monday from Great Northern Paper, another Cate Street project, with proceeds from an auction of papermaking equipment at the former Katahdin Avenue mill.

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