MILLINOCKET, Maine — Cate Street Capital, the controversial New Hampshire-based private equity firm that purchased and scrapped Millinocket’s shuttered former Great Northern paper mill, still owes about $1 million in overdue taxes to the town.
Town officials are holding talks with the company about the debt, in hopes of recouping at least some of it.
Millinocket town attorney Dean Beaupain said talks began after Assessor Michael Noble reduced Cate Street’s tax bill by $356,541 from the approximately $1.37 million levied on its equipment and real estate for the 2014-15 fiscal year, which ended June 30.
“We are having discussions concerning the payment of the outstanding unpaid taxes. I don’t think there’s any dispute over that,” Beaupain said Friday. “The assessor acted upon [the companies’ abatement request] and the taxpayer has not found the assessor’s action acceptable.”
Town Manager John Davis and Town Council Chairman Richard Angotti Jr. declined to comment this week on any ongoing talks with Cate Street, which created GNP Holding II LLC and GNP West Inc. after buying the mill for $1 in 2011.
Cate Street spokeswoman Alexandra Ritchie issued a brief statement Friday. “We have been, and will continue to, work in collaboration with the town of Millinocket to resolve the outstanding taxes of GNP West and its affiliates,” she said.
Councilors met Thursday in a closed session for what was described as “a tax abatement issue.” It was the latest of several recent sessions, but it is unknown whether any or all involve Cate Street. Under state law, tax abatement negotiations can be discussed privately, but all settlements require public votes, Beaupain said.
Beaupain said Cate Street was doing what any taxpayer has a right to do.
“Any taxpayer at any time can negotiate with a town over the amount of a tax payment,” Beaupain said. “If they don’t do that, they can still ask to pay less than the amount they owe for whatever reason the taxpayer wants to assert.”
The town’s dilemma, Beaupain said, is whether to negotiate some payment from Cate Street, or wait for the maturation of 14 tax liens the town placed on the companies’ property in April and July.
Twelve were filed against GNP West and one each against Cate Street and GNP Holding, according to the database at the Penobscot County Registry of Deeds. They are scheduled to mature over the next 18 months. The town also is charging interest on the overdue taxes.
“No town wants to take a property,” Beaupain said. “They all want the revenue, in any town.”
Cate Street, GNP Holdings II and GNP West Inc. also will owe about $47,835 in taxes for this current fiscal year, according to tax bills available at millinocket.org. That amount will come due on Sept. 28, per town officials.
Town officials also have expressed hope that a Cate Street-created company, Thermogen Industries LLC, would eventually build a $140 million pellet plant on the Katahdin Avenue property. The mill is projected to produce 300,000 tons of biofuel pellets annually for distribution to overseas electricity plants and create some 300 jobs. It is reportedly still in development.
Collecting taxes from Cate Street in a timely manner has been a chronic problem for Millinocket since July 2013. Great Northern Paper Co., which the company created to operate its two mills, declared bankruptcy in September 2014, listing more than 1,000 creditors.
The public financing mechanisms that helped Cate Street purchase the mill sites in Millinocket and East Millinocket have come under scrutiny. Last month, the Finance Authority of Maine changed its rules to eliminate the type of financing plan used by Cate Street.