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East Millinocket officials worried about demolition at former mill site

By Nick Sambides, BDN Staff
Nick Sambides Jr. | BDN | BDN
Nick Sambides Jr. | BDN | BDN
The former Great Northern Paper Co. paper mill in East Millinocket is seen Sept. 25, 2014.

EAST MILLINOCKET, Maine — Town leaders are concerned that the owner of the former Great Northern Paper Co. LLC site is demolishing assets that could help lure a potential investor.

The concerns expressed by Board of Selectmen Chairman Mark Scally follow the appearance of what he described as heavy demolition equipment at the former mill site. Town officials have contacted the state’s federal delegation, the Maine Department of Environmental Protection and the Maine Department of Economic and Community Development to ensure that North American Recovery Management, the site’s owner, does not begin large-scale demolition at the site on Main Street, Scally said.

Department of Environmental Protection officials told the town that as of Friday North American had a permit only to demolish one wall on the property “so they can take out some machinery,” Scally said Saturday.

“They do not have permits in place for demolition, but the machinery they have up here is so enormous that it belies comprehension if you’re going to just knock out a wall,” Scally said. “It’s very suspicious.”

Representatives for the company did not return messages sent Saturday and Sunday seeking comment.

North American has declined town efforts to discuss the company’s plans for the site, Scally said.

Town officials have reviewed the situation with the town’s attorneys, and they are monitoring it closely, Scally said.

Susie Moore, a senior associate in investor relations at Hackman Capital Partners of Los Angeles, confirmed the sale of the buildings and equipment at 50 Main St., the former home of the Great Northern Paper mill, to North American in March 2016. Based in Boca Raton, Florida, North American did not disclose the purchase price.

In his LinkedIn biography, Jason Inoff, CFO at North American, describes North American as a company that “invests in industrial properties encumbered by: Obsolete assets requiring demolition, above ground asbestos and universal waste removal, and/or below ground environmental remediation.”

Hackman Capital Partners bought the mill’s assets at bankruptcy auction for $5.4 million on Dec. 5, 2014. Hackman outbid four other potential owners three days before. Hackman hoped to find a buyer interested in restarting the mill, but company officials announced in March 2015 that they had “moved on” from marketing the facility to newsprint manufacturers.

The former Great Northern Paper mill closed in February 2013, laying off 212 of 256 workers and devastating the Katahdin region economy. The mill made newsprint and telephone directory-grade paper. Its closure ended more than 100 years of international papermaking success in the Katahdin region and at that site.

The Millinocket mill closed in 2008.

It doesn’t own the site’s buildings or the land beneath them, but Scally said the town does have a legitimate economic and legal interest in the former paper mill site.

The town has a lien against the site because North American owes the town about $112,000 in unpaid property taxes, he said.

The lien, Scally said, means that the town must sign off on any demolition work done on the site and must guard against the site losing any value due to demolition. The removal of value, he said, could impair the town’s ability to be paid the taxes owed.

 


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