GNP makes interest payment on $658,657 in taxes owed East Millinocket

The mill in East Millinocket is seen in a 2009 file photo.
Bridget Brown | BDN
The mill in East Millinocket is seen in a 2009 file photo. Buy Photo
Posted Aug. 28, 2014, at 2:35 p.m.
Last modified Aug. 28, 2014, at 3:08 p.m.

EAST MILLINOCKET, Maine – The town’s largest taxpayer made an interest payment this week on the $658,657 it owes in personal property and real estate taxes, officials said Thursday.

The $28,036 wired from Great Northern Paper Co. LLC came in Monday after Selectman Clint Linscott arranged the deal. The payment was not part of any schedule, but came in response to a request Linscott made when retired town Administrative Assistant Shirley Tapley asked him to intervene, Linscott and town Treasurer Beverly MacLeod said.

The amount covered its outstanding interest to date. MacLeod and Linscott said they didn’t know when another payment might come.

“If you can find out, let me know,” MacLeod said Thursday.

Alexandra Ritchie, the company’s spokeswoman, did not immediately return a message left Thursday.

Great Northern owns a shuttered paper mill and related equipment in East Millinocket and an industrial park and a closed mill in Millinocket. It has owed the money, which is among two large property tax bills the papermaker owes East Millinocket and Millinocket, since April. No payment has been received in Millinocket since the auctioneer trying to settle the company’s $1.18 million net tax debt with that town wired $96,417 on Aug. 1, officials said.

The papermaker issued federally mandated layoff notices to workers at its idled local mill on Aug. 8, leading some officials to wonder whether the mill is permanently closed and others to hope that a new mill investor would restart it.

The company laid off 212 of its 256 workers on Feb. 6, although its tax troubles with East Millinocket and Millinocket began in summer 2013 when its delayed payments precipitated a cash-flow crisis in Millinocket. GNP hadn’t issued WARN notices previously because company officials originally said they expected to have workers back on the job within 90 days.

MacLeod said that precise numbers were difficult to come by, but East Millinocket appeared to have an undesignated reserve fund, or cash balance, of about $1.2 million as of Thursday. According to Linscott, Tapley telephoned him to approach officials at GNP, with whom he speaks regularly, after saying that another selectman had volunteered to see about getting money from the company but failed to come through.

Linscott estimated that he made his telephone call about two weeks ago. He said that town officials were contacted on Aug. 21 to double check the interest amount, which he said they sought specifically. Interest payments will continue to accrue on the debt until the debt is made in full, MacLeod said.

The impact of Great Northern’s nonpayment on town services, MacLeod said, remains difficult to gauge. Town and school officials have yet to set budgets for the 2014-15 fiscal year, which began July 1. Their budget cutting continues, she said.

During a recent campaign stop with laid-off mill workers in East Millinocket, Gov. Paul LePage said that several businesses are interested in restarting the mill, but not with GNP or its parent company, Cate Street Capital, involved in the mix.

Yet Cate Street remains committed to the mill and its other projects, LePage said.

LePage said Cate Street hasn’t set deadlines for completion of the search for a partner, or for restarting the East Millinocket mill. The LePage administration gave its full support to Cate Street when it bought the East Millinocket and Millinocket mills for $1 from Brookfield Asset Management in October 2011.

The state is working “feverishly” to find a partner for Cate Street and restart the mill, LePage said, but he didn’t expect any activity until after the election in November.

 

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