OLD TOWN, Maine — City leaders don’t want to wait and see what happens to the 40-acre defunct mill site along the Penobscot River, which is owned by a consortium of liquidators and still home to the University of Maine’s Technology Research Center, so they are working toward purchasing the land and some warehouses on it in the hope the property can be redeveloped.
The Town Council on Monday held the first of two public hearings on a proposed $3 million bond for the parcel and 400,000 square feet of warehouse space, and it voted unanimously to hold a second hearing at 6:30 p.m. Thursday, July 28.
“The $3 million bond will allow the city to purchase strictly all of the land that the mill sits on and the warehouses,” David Mahan, council president, said at the beginning of the public hearing.
The last operator of the mill, Expera Specialty Solutions of Kaukauna, Wisconsin, closed the facility at the end of 2015, displacing 195 workers.
A consortium of liquidators known as MGFR LLC, which includes the Boston-based Gordon Brothers Group, PPL Group LLC of Illinois, Rabin Worldwide of California and Capital Recovery Group LLC of Connecticut, purchased the mill’s land, buildings, property and equipment in January. The same liquidators purchased the shuttered Lincoln Pulp and Tissue mill.
“They would like to help us repurpose the site, if we can,” City Manager Bill Mayo said of the consortium.
Equipment and items within the two closed mills in Old Town and Lincoln were sold at auction in April.
“My concern is we’re getting into the real estate business,” Joe Pluff, a resident who sits on the city’s economic development committee, said during the public hearing.
“The council agrees that we don’t want to be in the real estate business, but if we don’t do anything now, nothing is going to get done,” Mahan responded.
Mayo and Mahan said the city has spent the last nine months working to find some way to protect the city’s interests and ensure the research center continues to have a place to call home. The plan is to lease the warehouse space to pay off the bond for the land, and then sell the property down the road, the Town Council president said.
“The money from the leases would offset the bond payment,” Mahan said of the estimated $253,000 annual bond bill. “Our plan is to sell the land and the warehouses to a company in a little over a year from now.”
UMaine has agreed to pay $95,000 per year to lease the space from Old Town, if the city completes the purchase, Jake Ward, UMaine’s vice president of innovation and economic development, said Tuesday.
UMaine currently pays nothing but utilities for the month-to-month lease for the research center, which opened five years ago and is located in the mill’s former finished product storage area on the southern portion of the site.
Researchers within UMaine’s Forest Bioproducts Research Institute are working on campus to create and commercialize new wood-based bioproducts that they test on a larger scale at the research center.
Ward said he had discussions with Expera about buying the warehouse the research center occupies, but the two could not agree on a price. The lease agreement between Old Town and the research center is for one year.
“Every hope is to have a long-term relationship,” Ward said. “We’re here, and we want to stay.”
The research center occupies about 40,000 square feet of a 140,000-square foot warehouse, one of two main warehouses on the property. The other 260,000-square-foot building is the former tissue machine building warehouse.
Mayo said he could not release the name of the other possible warehouse lessee, who is “brand new” to the scene, but said the name would be released at the July 28 meeting, if the lease is signed.
Resident Ed Spencer said he would like to see the mill redeveloped but is worried about contamination at the mill site and, although he understands negotiations are private, he doesn’t like all the secrets.
“We’ve had such a lack of information,” Spencer said.
The city’s purchase does not include the 15 megawatt boiler or other buildings on the mill property, Mayo said.
“We are doing this to start the process of repurposing the mill site,” Mahan said.
City leaders also continue to work with the consortium to bring other projects or developments to the former mill site, but because of negotiations cannot discuss them at this point, the council president said.
“We do have two other irons in the fire and are in the hopes that over the next two months we can discuss those items,” Mahan said.