MILLINOCKET, Maine — A controversial New Hampshire-based private equity firm that scrapped Millinocket’s shuttered former Great Northern Paper mill has sold the site for $1 to a volunteer economic development group that will partner with the town to revitalize Millinocket’s economy, officials announced Thursday.
Principals at Cate Street Capital sold the mill site to Our Katahdin, and the Town Council voted 7-0 on Thursday to allow Our Katahdin to assume responsibility for the approximately $1.5 million in tax liability Cate Street creations GNP Holding II LLC and GNP West Inc. owe the IRS and the town.
Council Chairman Michael Madore said the sale and vote were huge events. Now a group of a half-dozen successful businessmen who grew up in Millinocket is helping it rebound from crushing paper mill job and revenue losses and will guide its rebirth, he said.
“This is the largest economic development interest the town has taken on since Great Northern first entered the town more than a century ago,” Madore said after the council meeting.
Cate Street offshoot Thermogen Industries LLC has a lease on a small portion of the property, and its plan to create industrial wood pellets is still alive. But the rest of the 1,400-acre property will be open for revitalization by Our Katahdin and its principals, including native-born Sean DeWitt, director at the World Resources Institute, a Washington-D.C. based nonprofit economic development organization, Madore said.
“We have had inquiries from entities that are interested in developing the site,” Madore said. “We have things warming up in the bullpen.”
Besides the mill site, Our Katahdin assumes ownership of a 157-acre parcel at Ferguson Pond, land adjacent to Millinocket Municipal Airport, and a Regional EB-5 Center, which Our Katahdin officials called “a valuable federal designation that enables foreign investors to invest” in American projects.
As part of the council vote, councilors agreed to give Our Katahdin a six-month waiver on foreclosure of the tax liens to allow the organization and town officials to define their collaboration and its goals.
DeWitt said that besides working with the town, the group will work with other town and regional economic development groups to craft an economic development plan.
“We cannot promise instant jobs. We can promise an effort to try to get some economic development on a site that has been mostly idle for the last eight years,” DeWitt said. “We have no illusions that this is something we can do on our own. We remain open to any and all ideas.”
The group is open to most any form of development on the site, which has been shuttered since 2008, but hopes in particular to encourage high-tech bio-industrial manufacturing partnerships there that involve new, innovative and lucrative uses of forest products, DeWitt said.
Discussions between the Great Northern Paper corporate entities and Our Katahdin began about seven months ago. The group is a natural, possibly only choice for the revitalization of the site. The Katahdin region towns have been notoriously wary of outsiders — and, sometimes, each other.
CZB Associates, a Virginia economic development agency, offered to evaluate the region in 2015, but its report — written for free — criticized Millinocket leaders and residents for failing to address their economic problems.
The report was regarded as a sound blueprint — and some tough medicine — for the region, but leaders of East Millinocket, Medway and Millinocket shelved it.
Formed that year, Our Katahdin was the largest of several volunteer economic development groups that answered the report with some solid economic successes.
Our Katahdin began crowdsourced fundraising efforts and offered revitalization bonds to fund regional initiatives. It sponsored cleanups, purchased the former Miller’s Department Store building on Penobscot Avenue for redevelopment and co-sponsored a volunteer marathon that brought 550 runners to town last month. It completed 21 community development projects in 24 months.
“One of the motivating factors of the direction we have gone in is that the town is not in the economic development business per se. You could say in a sense that [Our Katahdin is] the town’s economic development agency,” said the town’s attorney, Dean Beaupain.
“Given the people involved with that organization, I just don’t see the downside,” Beaupain added. “Look what they have accomplished. One of the most important differences is this is a nonprofit corporation. For the first time we are dealing with an organization [owning the mill site] that is not in it to make a buck.”