GOULDSBORO, Maine — Though state and local officials have been intent for months on finding a new owner for the Stinson Seafood plant, which closed down this spring, selectmen have doubts about applying for a grant to help the likely buyer get up and running.

At issue is exactly what the $400,000 federal Community Development Block Grant would be used for.

Last week, officials announced that Live Lobster Co. of Chelsea, Mass., had signed a purchase-and-sale agreement to buy the plant, located in the village of Prospect Harbor, from Bumble Bee Foods LLC. Live Lobster has said it plans to convert the former sardine cannery into a lobster processing facility.

The company has predicted it could employ as many as 120 people by 2012. The sardine operation, which was the last of its kind in the country, employed 128 people when it shut down on April 16.

Operating a lobster processing plant would be a first for Live Lobster, which since its founding in 2001 has been a lobster distributor, shipping lobsters it buys in Maine and Massachusetts around the country and overseas. The company has said it would like to start buying lobster from and selling bait to fishermen in Prospect Harbor as soon as possible.

This is what has given selectmen pause. They say they are all for a lobster processor coming to town, and might be willing to consider supporting a grant to make local lobster processing a reality, but they don’t believe government money should be used to create competition for lobster distributors that already operate on the Schoodic Peninsula.

Dana Rice, Gouldsboro’s chairman of the Board of Selectman, is one of those lobster dealers. For that reason, he abstained from a vote Wednesday on whether to sign a letter of support for the grant, but his fellow selectmen on Wednesday decided 4-0 against sending the letter.

Separate attempts Friday to contact Rice and Antonio Bussone, president of Live Lobster Co., were unsuccessful.

Bill Thayer, the Board of Selectmen’s vice chairman, said Friday that Gouldsboro voters in June gave selectmen the authority to support a Community Development Block Grant for renovating the cannery for lobster processing. Using government money to help establish another lobster buying operation in town was not something voters endorsed, he said.

Thayer said there are five or six lobster buyers who already operate in Gouldsboro and neighboring Winter Harbor.

Thayer indicated that the town would like to have a better understanding of Live Lobster’s financial resources. Seeing a business plan, and knowing specifically how the grant would be used, might convince selectmen to reconsider their support of the grant.

“We’ve seen no financial statements from this company,” Thayer said. “That’s the sort of thing a bank would look at.”

Selectman Jim Watson said that he would be willing to support the grant if there were a way to guarantee that the funds would go toward lobster processing. He said Live Lobster is welcome to set up a lobster-buying operation, but that it would not be fair to other lobster dealers to subsidize that part of the company’s operations with a government grant.

“I remain steadfast on that,” Watson said. “If [Live Lobster] still wants to buy and sell lobsters, that’s fine, but not with taxpayer money.”

Watson said he expects the selectmen will meet with Gov. John Baldacci and Bussone in the coming weeks to discuss the selectmen’s concerns, but that no meeting date has been set.

David Farmer, spokesman for Baldacci, on Friday called the vote “a temporary setback.” He said the grant would be used for lobster processing equipment, and said that the governor wants to clear up the confusion so the project can move ahead.

“They still have a couple of weeks to reconsider,” Farmer said of Gouldsboro’s selectmen. “The governor remains committed to the project. He thinks what needs to happen is better communication.”

Farmer said he is not sure how critical the grant is to Live Lobster’s plans. It is possible, he said, the company could move ahead without the grant to acquire the plant and then convert it to lobster processing.

“I assume it’s pretty important,” he said. “We think having lobster processing in [the former sardine cannery] is pretty valuable.”

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Bill Trotter

A news reporter in coastal Maine for more than 20 years, Bill Trotter writes about how the Atlantic Ocean and the state's iconic coastline help to shape the lives of coastal Maine residents and visitors....