The former Verso Paper mill in Bucksport. Credit: Gabor Degre

Bucksport and its top taxpayer have settled a tax dispute involving the former Verso Paper mill site’s power plant that will cost the town $168,036.

Mill site owner American Iron and Metal and the town met in the middle on the tax break AIM sought on its property at 2 River Road about two months ago, Town Manager Susan Lessard said.

AIM subsidiary Bucksport Generation LLC, which owns the site’s power plant, wanted the valuation of the site’s gas-powered electrical generator cut by about a third, to $42 million from $60 million, but agreed to a valuation of $50 million, Lessard said.

“The request had been anticipated since AIM purchased the property,” Lessard said. “The last time the town had this property appraised was in 2015, right after the mill closed, and AIM has done substantial work removing things and reorganizing the site’s generational capacity.”

AIM officials have declined to comment on their abatement request since filing it in late February.

At the town’s present tax rate, $16.30 per $1,000 of assessed value, Bucksport Generation owed $983,036 in property taxes to Bucksport for the $60 million valuation on the mill site property.

Credit: Gabor Degre

Under the new deal, with the property valued at $50 million, it will pay $815,000, according to the abatement notice filed by Bucksport Tax Assessor Jef Fitzgerald on May 8.

Lessard told Town Council members of the settlement of the abatement request during their meeting Thursday night and announced it Tuesday.

If the town had granted Bucksport Generation’s full request to reduce the valuation to $42 million, it would have translated into a $652,000 property tax bill at the present mill rate.

By keeping the power plant site’s valuation at 2015 levels until now, AIM effectively cushioned Bucksport from the property tax impact of the paper mill closure in late 2014, Lessard said. About 570 workers were laid off, devastating the Bucksport-area economy.

“It was handled reasonably. They have owned that property since 2015. They could have at any time filed for an abatement, but they didn’t,” Lessard said. “They waited until they had addressed all the stuff, shall we say, that they were addressing.”

The power plant site had been valued at about $60.3 million. Under the new deal, it is valued at $50 million for this fiscal year, which ends June 30, and the 2019-20 fiscal year, which begins July 1.

As part of the deal, the valuation will drop from $50 million to $46.6 million in the 2020-21 fiscal year.

“This total acknowledges that the basic plant will lose more value due to a continued downward trend in the power markets,” Fitzgerald said in his notice.

AIM also agreed not to appeal the value of the property for the stated three-year period, and the town agreed to maintain the current level of assessment unless some “unforeseen factors are discovered.”