BUCKSPORT, Maine — Officials with the company looking to buy the Verso Paper mill aren’t revealing their intentions, but a town official said Wednesday that it looks like the era of papermaking in Bucksport is over.
Derek Goodine, Bucksport’s town manager, said he and other town officials met for about an hour Tuesday at the town office with Herbert Black, an executive with Montreal-based American Iron & Metal Co., to discuss what the company has planned for the site.
AIM Development, a subsidiary of the Canadian firm, is buying the mill from Verso for $58 million, according to paperwork Verso has filed with the federal Securities & Exchange Commission informing the agency of the sale agreement.
According to Goodine, demolishing the paper mill and making the site available for redevelopment is what the buyer has in mind. What new uses might prove to be viable is anybody’s guess, he added. The 270-acre site has a rail yard, a licensed landfill, and access to natural gas and deep water, which makes it a good site for other types of manufacturing.
Goodine said Black told town officials that Verso did not receive any inquiries from other companies interested in continuing the papermaking operation.
“This was the message we got yesterday from AIM,” Goodine said, seated in the lobby of the local town office. “There was nobody else who would operate the mill.”
Bill Cohen, spokesman for Verso, said Wednesday that Verso did seek offers through a competitive bidding process. He declined to go into further detail, however, and would not comment on whether Verso received multiple bids for the mill.
Contacted Wednesday by email, AIM Development official Jeff McGlin declined to comment about the company’s plans for the mill site in Bucksport. He said the company may be in a better position to release information about its plans “close to the end of the year.”
Verso announced in October that it planned to shut down the mill by the end of December, which is expected to result in 570 workers losing their jobs. The last of the mill’s three paper-making machines shut down last week. Many of the mill workers are expected to spend their last day on the job in the coming week, according to an email that the mill’s human resources department sent to mill employees Tuesday afternoon.
Tennessee-based Verso is separately pursuing an acquisition of NewPage in a deal that is pending antitrust approval from federal regulators. In October, NewPage agreed to sell its Rumford mill to the Canadian company Catalyst Paper to address concerns that the joint company would control too much of the North American market for coated paper.
Goodine said town officials still are trying to absorb the news that the Bucksport mill appears destined not to reopen. He said they also have heard that other paper companies may have bid on the mill and that they are looking into whether this is the case. Town officials do not know whether the state may be able to intervene in the planned sale of the mill to AIM Development.
On Tuesday, Gov. Paul LePage expressed disappointment in the planned sale to AIM Development and indicated he was looking into options to possibly prevent the dismantling of the mill.
“The state has been in contact with AIM, and we are ensuring that the best interest of the employees is kept in mind,” Adrienne Bennett, LePage’s spokeswoman, said Wednesday in a brief statement. “We are hopeful that a resolution, which benefits all parties is within the foreseeable future.”
Goodine said town officials had been confident in the mill’s future, despite the waning state of Maine’s paper industry.
“My mind is cluttered with mixed emotions about it,” Goodine said. “This mill always seemed to be the survivor [compared to other struggling or idle mills in Lincoln, East Millinocket, Millinocket and Old Town].”
Especially “shocking,” according to the town manager, is the sale price of $58 million, plus reimbursement to Verso for unused fuel at the site and for gas and electricity utility deposits.
The town’s latest valuation for the mill property, which is used to determine the mill’s property tax assessment, is $360 million, Goodine said. Just the municipal valuation on the mill’s power generation facilities alone, which AIM Development is expected to continue to operate, is $86 million, he added.
The emotional trauma of going, in two months time, from having a bustling mill to an unwanted facility destined for the scrap heap is sudden and severe, Goodine said. But with that shock comes certainty about the future. The town and mill workers won’t have to endure a roller-coaster ride of repeated starts and stops of a mill that continually teeters on the edge of bankruptcy, he said.
Goodine noted that the former Verso Paper mill in Sartell, Minnesota, which AIM Development purchased last year for $12.5 million, is being redeveloped and already has a new tenant.
That mill has not operated since May 2012, when an explosion and resulting fire killed a worker, injured four others and caused extensive damage to the facility. Verso decided to permanently close the Sartell mill a few months later, resulting in 279 employees losing their jobs.
Goodine said Wednesday that in the approximate year and a half since AIM Development began work redeveloping the Sartell mill, a Canadian manufacturing firm called Edmonton Trailer already has moved into and begun operations at the mill, where it has 60 employees.
“I’m glad to see things can happen in one year,” Goodine said of the potential for attracting new jobs to the Bucksport site. “We can start the planning process now.”
The town manager added that having several smaller companies at the mill site may be the best solution. If one of them should fail, he said, it may be easier to replace, and it likely would not result in the loss of 500 jobs.
“Having several [smaller employers] would be so much better than having one [large employer,” Goodine said.
BDN business writer Darren Fishell contributed to this story.