January 12, 2017

Nonprofit buys former Great Northern Paper holdings in Millinocket

In purchasing the 1,400-acre mill site for $1, the group takes on debt from the properties as it looks for redevelopment opportunities.

The former Great Northern Paper mill in Millinocket, shown here in 2011, was dismantled and sold for scrap beginning in 2013. Press Herald File Photo/Gordon Chibroski

A nonprofit has purchased the former holdings of Great Northern Paper in Millinocket, including the 1,400-acre mill site, with the eventual goal of transforming the property into a bio-industrial park that would benefit from its proximity to the North Woods.

Our Katahdin bought the holdings Thursday from Cate Street Capitol for $1. They include land adjacent to Millinocket Municipal Airport and a 157-acre site at Ferguson Pond, according to a news release Thursday by the locally based nonprofit Our Katahdin and the Millinocket Town Council.

“We know this purchase comes with enormous responsibility. We can’t promise instant results, but we can guarantee our best effort to help transform this idle industrial site into a productive, innovative bio-industrial park that leverages the comparative advantages of our region,” said Sean Dewitt, president of Our Katahdin. “This site is our heritage. We strongly believe in its future.”

While Our Katahdin will own the 1,400-acre mill property, the town of Millinocket will serve as the nonprofit’s redevelopment partner.

In exchange for waiving all or part of the $164,000 in back taxes owed to the town by Cate Street’s subsidiaries, GNP West and GNP Holding II Inc., the town will be given parcels of land, including 100 acres around the Millinocket Airport that the town could use to expand its airport.

Mike Madore, chairman of the Millinocket Town Council, said the deal could not have come at a more opportune time. The town was set to foreclose on the property on Jan. 16. Now, it will work together with Our Katahdin to bring the mill site back to life.

Our Katahdin purchased the mill site Thursday morning at 8:45 a.m., but the deal was not made public until Thursday evening, after the Millinocket Town Council officially voted 7-0 to postpone the foreclosure auction on the properties for six months. That will give the town and Our Katahdin time to resolve remaining tax liabilities. The Internal Revenue Service has a $1.4 million tax lien on the mill property.

Madore said the partners will try to reach a resolution with the IRS to either waive the outstanding tax or reduce it significantly.

“Had the town chosen to foreclose on the property, it would have fractured the assets and embroiled the town in legal processes that would continue to delay economic redevelopment,” Our Katahdin said in its press release.

Madore, who was reached Thursday evening, said the deal has given him hope for a region that has struggled with job losses and economic downturns.

The 61-year-old Madore pointed out that Dewitt and his business partners all grew up in the Millinocket region and attended local high schools, but left the area because they were unable to find jobs. He described them as young entrepreneurs who are committed to restoring economic life to the region.

“The operations and potential uses for this site are just incredible,” Madore said, adding that the property could be redeveloped as a saw mill, biomass boiler plant or a facility that converts wood pulp into diesel fuel.

“We know we’re not going to hit a home run by getting a single business that employs 4,000 people but if we could attract seven or eight businesses that employ between 200 and 1,000 people, that would be considered a success,” Madore said.

Former Millinocket Town Manager Peggy Daigle said a private-public partnership is the best thing that could have happened for the site.

“I think they have got an incredible opportunity here because the forest products industry, regardless of what some are saying, is still a vital part of the Maine economy,” Daigle said Thursday evening. Daigle has served as manager of four mill towns, including Millinocket, East Millinocket, Old Town and Lincoln.

The acquisition includes a Regional EB-5 Center, a valuable federal designation that makes it easier for foreign investors to invest in projects in the United States.

The investment program offers visas to individuals who invest $1 million, or $500,000 for investments in rural regions or those with high unemployment. That means entrepreneurs as well as their spouses and unmarried children under 21 can apply for permanent residence if they meet certain investment and job-creation criteria.

Members of Maine’s congressional delegation praised the sale on Thursday and pledged to work with Our Katahdin to promote economic growth.

“The purchase of the former mill will help relieve the town of a burden that it has had to bear for far too long, and it will finally allow innovators and entrepreneurs to come together, collaborate, and build a better, brighter future for the region,” said Sens. Susan Collins, R-Maine, and Angus King, an independent, and Rep. Bruce Poliquin, R-2nd District, in a joint statement.

Great Northern Paper built a mill at the site in 1900, but it stopped operating in 2008 and was torn down and sold for scrap over the course of 2013 and 2014.

In its heyday in the 1960s and 1970s, Great Norther Paper employed more than 4,000 people at the Millinocket mill and a sister site in East Millinocket.

Millinocket has about 4,200 residents in northern Penobscot County. It enjoyed a century of prosperity due largely to the presence of the Great Northern Paper Mill. The town’s population peaked in the 1960s at nearly 8,000 people with most of the adults employed by the paper mills.

Our Katahdin is a 50(c)(3) nonprofit focused on community and economic development in the Katahdin region. Since December 2014, it has partnered with the local community to implement 21 projects in the Katahdin region.

Board members include Sean DeWitt, Nancy DeWitt, Mike Faloon, Tony Foster, Michael Osborne and Michael Seile Jr.

“We all grew up together,” Sean DeWitt said. “This is our home, this is our heritage.”