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A volunteer economic development organization has settled an old $1.5 million debt to the IRS that will allow it to market Millinocket’s former Great Northern Paper Co. mill site to potential tenants.
The nonprofit Our Katahdin will pay $450,000 of the debt, which was on the property when the group bought it for $1 from former mill site owner Cate Street Capital LLC in January 2017. No payoff date has been set.
The lien was the biggest impediment to development of the 1,400-acre former paper mill site in Millinocket, which has been devastated by the mill’s closure in 2008 and other setbacks. In December, the lien forced the withdrawal of a North Carolina firm that had tentatively agreed to launch a $30 million factory at the mill site making cross-laminated timber, said Sean DeWitt, president of Our Katahdin.
“This settlement allows the redevelopment phase to begin. We will no longer have to focus on cleaning up the past, we can now refocus on building for the future,” DeWitt said Wednesday. “And every dollar that we don’t have to spend cleaning up the past is a dollar we can invest to grow jobs and opportunity in the Katahdin region.”
Attempts to contact the IRS to verify the settlement were not immediately successful.
Our Katahdin intends to develop the site into a multi-tenant industrial park. Some area residents criticized the group for taking on the lien, but group members had no choice, said Steve Sanders, director of mill site redevelopment at Our Katahdin.
“It was a bitter pill for us to swallow, but it was the only way to move forward with redevelopment. Otherwise the site would have remained idle and subject to further decline and decay,” Sanders said.
Our Katahdin has raised $90,000 already to put toward repaying the IRS debt. Once the full $450,000 settlement is paid, Our Katahdin will receive a $5.3 million U.S. Economic Development Administration grant that will allow it to rebuild and reconnect site infrastructure, including power, water, wastewater, road, rail and fiber optics. The engineering selection process is expected to begin late this month, said Sanders.
“We’ve been working to get this Offer-in-Compromise settled at the lowest possible amount. Now that we have this agreed upon amount, we can work on financing this amount along with the working capital that we need to mobilize our EDA grant money,” Sanders said.
The site has drawn interest from developers in the aquaculture, food production and data center industries, Sanders said.
Last month, the British firm Aquaculture Management and Holding Co. said it was ready to start building a “modern aquaculture plant” in Millinocket to raise Atlantic salmon.
Sanders again on Wednesday declined to confirm the company, whose U.S. subsidiary is called Aquabanq, was exploring the mill site.