PORTLAND, Maine — Paper maker Sappi North America has filed a formal request for Skowhegan to lower the value of its mill there, arguing the $100 million drop in value the town approved last year was not enough.
It’s one of three mills in the state that is contesting or has contested that its property is valued too high, alongside UPM’s Madison mill and Verso’s Jay mill.
Sappi on Monday announced it has filed the abatement application it says is “critical to the long-term financial health of the mill.”
The company said the appraisal it commissioned from the firm Duff & Phelps came in at $326 million for its Skowhegan mill and the property there. That’s $238 million lower than the valuation of $564 million town officials lowered last year. The mill’s valuation now stands at $464 million.
“Sappi has expressed appreciation for the reduction in assessed value of the mill instituted by the Town last year, but the company maintains that the reduction was not sufficient to reflect the actual value of the mill,” the company said in its statement Monday.
While owners of the mill that employs 730 people said the reduced valuation is fair and necessary for it to stay competitive, Skowhegan and the town of Madison have both expressed concern that requested drops in tax revenue from their largest taxpayers, paper mills, would pose a challenge for local budgets in 2015.
The Sun Journal reported those towns and the town of Jay have supported legislation that would allow the reduced valuations of the mill to be factored into state revenue-sharing calculations for 2015.
In its statement Monday, Sappi said that declining global demand for paper has resulted in a drop in the value of paper mills that is not reflected in Skowhegan’s 2014 reduction.
“We remain open to working with the Skowhegan Board of Assessors and Skowhegan officials to reach an amicable resolution to the company’s abatement request,” said Mike Haws, managing director of Sappi’s mill in Skowhegan.