EAST MILLINOCKET, Maine — The likely new owner of the closed Great Northern Paper mill wants to market it to paper manufacturers globally and investigate repurposing it as something totally different, town officials said Wednesday.
Kenneth Katz, vice president of the Equipment Division of Hackman Capital Partners, discussed his company’s various real estate purchases and industrial reclamation projects across the country during a 30-minute meeting on Wednesday at the town office.
“They aren’t necessarily a liquidator. They realize that they can make more money in the long run if they can repurpose industrial real estate,” said Mark Scally, chairman of the Board of Selectman. “They want to be a good neighbor. They want to repurpose the mill. Any option is available for reinventing the mill.”
Katz related that those options include marketing the mill’s individual components, such as its bark boiler, papermaking machinery and other components as individual businesses, if that works best. Hackman also is interested in turning the mill into an industrial site, assisting companies in moving to it, and possibly investing in them, Selectman Mark Marston said.
“They said that if this doesn’t fly within a certain amount of time, they will have to start razing buildings, but it is not anywhere in the near term,” Marston said.
Marston and Scally attended the meeting with Angela Cote, town administrative assistant, and John Chaisson, a former Great Northern Paper Co. LLC worker who has continued to oversee mill maintenance since GNP began filing for Chapter 7 bankruptcy protection in federal court in September.
The Katahdin region’s single largest employer and taxpayer, the mill made several types of paper, including newsprint and telephone directory grade, and closed in January, eventually idling 256 workers. It left 1,159 creditors owed $65 million to its creditors and had $28.15 million in assets.
Hackman remained on-track to close on the $5.4 million bankruptcy sale by Friday, trustee’s attorney Randy Creswell said Wednesday. Hackman outbid GNP Acquisition, which submitted the stalking horse bid of $2.6 million, and real estate liquidators AIM Development, Mac-Butler and Maybid LLC in a bankruptcy auction Tuesday morning in Bangor. U.S. Bankruptcy Court Judge Louis Kornreich authorized the sale later that day.
Founded in 1986 and headquartered in Los Angeles, Hackman is a privately held, asset-based investment firm that owns 25 million square feet of industrial property throughout the country but does not operate any paper mills. Its one potential foray into papermaking, its acquisition of a newsprint- and directory-grade mill in Snowflake, Arizona, in 2012, was foiled when that mill’s previous owner removed enough equipment from the site to make a restart impossible.
It was only a first meeting, a brief meet-and-greet, but Katz impressed Scally and Marston, they said.
“I believe him. I think they are going to try to repurpose this. Most of the other bidders were in there to demolish it,” Scally said. “These guys are at least offering us some hope, and they are buying us some time. Of the five bidders, they were the best one to come down the pike as far as we were concerned.”
Katz and other company officials did not return telephone and email messages left Wednesday.
Perhaps the board’s most ardent advocate of the Katahdin region’s forest products industry, Marston found much to cheer in Katz’s statements. Katz reiterated Hackman’s commitment to keep the mill heated and maintained during the winter, Marston said.
“Just to heat it is going to cost millions of dollars. They are doing that because they want to find a long-term tenant to use the building. They will market the buildings and look for long-term tenants,” Marston said. “It could be somebody who just wants the recycle building or make power there with the bark boiler.”
“He said they are very good at [repurposing]. If you scrap anything, you are done. It is over,” Scally said. “Whether they use the mill to make paper or not, they want somebody in there who is going to create jobs.”