OLD TOWN, Maine — The new owners of the local pulp mill are asking for a $43.7 million reduction in the valuation of its facility and city leaders decided this week to hire a company to revalue the property, City Assessor Travis Roy said Friday.
“This action was taken in response to the mill’s owner, Expera Specialty Solutions, filing for a tax abatement on Feb. 2, 2015. Expera asserts that the Old Town Mill is worth $7.3 million,” Roy said in an email. “The city of Old Town had the mill real and personal property assessed at just over $51 million last year.”
Expera Specialty Solutions of Kaukauna, Wisconsin, acquired the assets of the former Old Town Fuel & Fiber pulp mill on Dec. 5 during bankruptcy proceedings in U.S. District Court in Bangor. The deal was announced Nov. 11, a month after creditors forced Old Town Fuel & Fiber into bankruptcy, sending 180 millworkers out the door.
Expera created the company Expera Old Town LLC to purchase and run the facility after paying $10.5 million through bankruptcy court for the buildings, the mill equipment, and personal property such as trucks and office equipment and the land on which the mill is located. Employees started going back to work in January.
“The city denied our property tax abatement request,” Addie Teeters, Expera spokeswoman, said Friday in an email. “We will be filing an appeal as of Monday. Another item to cite is that the city is assessing the property more than five times what we paid for it.”
Because Expera purchased the mill through the bankruptcy court, they got a rock bottom bargain as a purchasing price, Roy said, adding that a portion of the funds, about $3.2 million, went to prior debts, including $1.6 million in back taxes due to the city.
“Expera’s claim of a $7.3 million value on the Old Town Mill represents an 85 percent reduction in value over the current assessment,” the city assessor said.
Engineering consultant and appraiser George E. Sansoucy from Portsmouth, New Hampshire, has been hired to do the reassessment, which will be done in three phases, City Manager Bill Mayo said in a Friday email.
“The initial draft report should be done by June 1 and final report done by mid-July,” he said.
The cost is $40,000. The last time the mill was assessed by an independent company outside the assessor’s office was 2007, Mayo said.
Expera Specialty Solutions was formed last year, when KPS Capital Partners purchased Thilmany Papers and Wausau Specialty Paper. The company, which makes bags for microwave popcorn, wine labels, candy wrappers and other specialty papers, purchased the Old Town mill for its pulp capabilities, according to previously published reports.
Expera last week made a partial payment of $563,000 for the 2013-14 real estate taxes, and about $90,000 for past-due sewer bills, Roy said.
“The personal property taxes from 2013-2014 remain due in full, as well as the real estate and personal property taxes from 2014-2015, which are the subject of the abatement application,” the city assessor said.
The 2014-15 taxes amount to $553,333 in personal property and $511,580 in real estate, and they were due in installments on Sept. 17, 2014, and March 18, 2015, according to city officials.
“There is a process that we follow with any taxpayer in regards to questions of valuation,” Roy said. “We are following that same process with Expera, and our goal is to come to a reasonable and justifiable understanding of valuation when the process is complete.”
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