Seen here during a cleanup operation in 2012, the Millinocket mill site has been described as crucial to the economic revitalization of the Katahdin region.

A nonprofit volunteer economic development group has secured a $5.3 million federal grant to help eventually create 115 jobs and spur $205 million in investment at a former paper mill in Millinocket.

The U.S. Department of Commerce reimbursements will help Our Katahdin rebuild infrastructure vital to drawing businesses to the Katahdin Avenue mill site, Secretary of Commerce Wilbur Ross announced in a statement released Thursday.

Once the home of a dozen paper machines and one of the nation’s largest paper manufacturers, the mill site is crucial to a Katahdin region economy devastated by the the mill’s shutdown in 2008. About 200 family-wage jobs were lost.

[Latest bid to revive shuttered Katahdin mill promises 100 jobs]

The restoration of water, sewer, roadway and electrical services to the former mill site will literally lay the foundation for the future of the region’s forest products industry, said Steve Sanders, Our Katahdin’s director of mill site redevelopment.

“This is a great opportunity and investment in our area,” Sanders said Thursday. “It doesn’t mean that we will have jobs [created by the grant] tomorrow. There are hurdles to cross.”

Our Katahdin is a group of a half-dozen Millinocket natives — plus several more residents — who banded together starting in 2014 to help their old hometown recover from its paper-mill closures. They bought the mill site in January 2017 for $1 and have been trying to revitalize it.

[Katahdin group buys former Great Northern Paper mill site in Millinocket]

The group helped draw LignaTerra Global LLC of Charlotte to the site. The company announced plans in February to build a $30 million, 300,000-square-foot factory to produce cross-laminated timber on the 1,400-acre industrial park.

The LignaTerra plant is expected to create about 100 jobs. The rest of the $205 million is expected to come from businesses Our Katahdin expects to draw to the site over the next nine years, which is the life of the grant, Sanders said.

Biorefineries, wood pellets manufacturers, nanocellulose researchers, aquaculture developers, data centers and food production specialists are among the businesses that have expressed interest in moving onto the site, Sanders said.

[Montana firm eyes $22 million Maine expansion for high-tech timber]

“We need this [grant] to make this a turnkey operation for our tenants,” Sanders said.

The site draws interest due to its ready access to rail lines, hydropower, a 10 gigabit internet network and the largest contiguous forest east of the Mississippi River, Our Katahdin members have said.

Construction of LignaTerra’s facility was supposed to begin in June. With the grant announced, Our Katahdin members will see what LignaTerra’s new timeline is, Sanders said.

[The big deals that won LePage’s favor for tax breaks]

LignaTerra, which plans to manufacture wood and displace concrete and steel for use in multistory building construction, was among the companies Gov. Paul LePage picked this year for federal Opportunity Zone tax credits.

The grant might help Our Katahdin resolve with the IRS a $1.4 million tax lien on the property left by the site’s previous owner, Cate Street Capital, Sanders said.

U.S. Sens. Susan Collins and Angus King, and U.S. Rep Bruce Poliquin wrote letters of support for Our Katahdin’s grant application, Sanders said.

[Millinocket in talks with Cate Street to collect $1M in overdue taxes]

“Our delegation has been helping us through lien process where they can. Now that we have one entity of the government is giving us money, it will emphasize the need to resolve this issue,” Sanders said.

“We have been almost a year working now on the lien. It has gone long enough. We need to end this as soon as possible.”

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