The mill in Old Town, seen in 2015. Credit: Gabor Degre / BDN

A long-standing dispute over the taxable value of the Old Town pulp and paper mill has reached Maine’s highest court, with oral arguments scheduled for next week.

The city is appealing last year’s Maine Superior Court decision that upheld the state Board of Property Review’s granting of tax abatements to Expera Specialty Solutions, the mill’s former owner.

Expera —which sold the mill in 2015 — has paid off its debts to the city. The company is seeking a tax refund of close to $1 million, claiming that the city’s property tax assessment of the facility was unfair.

The ongoing dispute began shortly after Expera purchased the mill in 2014 to restart production. The company acquired the property for $10.5 million from the previous owner, Old Town Fuel & Fiber, in bankruptcy proceedings.

But Expera’s revival of the formerly defunct mill didn’t last long and by September 2015, the facility was shut down again. It later sold for just $2.5 million. Old Town determined the facility’s value to be about $30 million in 2015.

The ND Paper mill’s current taxable value is about $27 million, according to City Assessor Travis Roy.

The company argued that the mill was only worth $7.3 million and that the city assessed its value far higher than what the company paid for it. Expera filed a request with the city for a $43.7 million reduction in the facility’s valuation — which was denied.

Expera then turned to the Maine State Board of Property Review, which also denied the request for a tax abatement. The company appealed the decision in superior court, which sent the matter back to the property review board.

Overturning its original decision, the board then ruled in favor of Expera. Superior Court Justice William Anderson also upheld the new ruling last June, after the city petitioned for a review.

The dispute has now made its way to the Maine Supreme Judicial Court, where it could end. Old Town has appealed the superior court’s decision, arguing that the court made a mistake in vacating the board’s initial ruling.

Old Town’s attorney Edmond Bearor said the 2014 bankruptcy sale was not an arms-length transaction because the mill was bankrupt — essentially making it a distress sale.

Bearor said the board then gave too much weight to Expera in its review of the property’s value after it considered how much the company paid to buy the facility.

The city is also arguing that the board’s reversed decision is invalid because it was not approved by a majority of the panel. Bearor said that only three members of the five-person board showed up to vote on Expera’s request for an abatement.

Two of the three members present voted in favor of the company but Bearor said the decision needed to be unanimous.

Roy, Old Town’s assessor, previously said the municipality will owe Expera approximately $600,000 if the supreme court upholds Justice Anderson’s ruling. But the company’s attorney, Jonathan Block, said the owed amount is likely closer to $1 million.

“It would be like if you bought a house for $100,000 and the city assessed it for $500,000,” Block said describing the case. “Expera is just trying to be taxed fairly, nothing more, nothing less.

“That is all they want.”

Oral arguments in the case are scheduled to begin at 10:45 a.m. on Thursday, Feb. 11.