The group that acquired a shuttered trash plant in Hampden over the summer has done more in recent months to get the facility up and running again than its previous backers did in two years.
The Municipal Review Committee secured ownership of the Hampden facility in August, it formed a company to control the plant, and it lined up a financial partner that would buy a majority stake and inject capital in the operation. That financial partner came close to having a plant operator lined up.
But the parties have missed deadlines to finalize the deal, and now it’s not expected to happen until next year.
It’s now been more than two-and-a-half years since the plant’s May 2020 closure. Why has it still not restarted?
The lead financial partner has to convince other investors to go along.
Before it bought the Hampden plant this summer, the Municipal Review Committee said it had chosen the New York investment firm Revere Capital Advisors as its financial partner to help it restart the facility.
The plan was for Revere to acquire a majority stake in Municipal Waste Solutions LLC, the company formed after the Municipal Review Committee bought the Hampden plant.
That’s still the plan, but it hasn’t yet materialized, with multiple deadlines having passed and the extension of an exclusivity agreement between the Municipal Review Committee and Revere that allows them to keep negotiating and working out restart plans.
It was revealed Wednesday during the Municipal Review Committee’s annual meeting that while Revere has some cash on hand, the investment firm’s approach to funding the Hampden facility is to lead a “consortium” of investors, said Pat Daly, a senior managing director at Revere.
“We’re quite confident that the Revere-led consortium will be able to execute an acquisition of the facility and while acquiring the facility in partnership with the MRC, complete the engineering and regulatory work to sustain permanent plant recapitalization and restart the facility,” he said.
But since Revere is leading a group of investors, those investors need to see that the facility will be profitable, and the profitability depends on securing key changes to the facility’s permits from the state Department of Environmental Protection, according to Nigel Ekern, Revere Capital Advisors’ chief operating officer.
The investors want changes to the plant’s state permits.
Early in its original operations in 2019, the plant was unable to secure state environmental permits to sell the cellulose pulp and plastic fuel briquettes it produced from the waste. With no permits in place, Coastal Resources — the company that then ran the plant — had to pay to landfill those products and lost out on potential profit.
Coastal Resources managed to secure those permits just before the facility shuttered in May 2020.
For months now, Revere has worked with its local environmental consultant, Haley Ward, and the Department of Environmental Protection to make adjustments to the plant’s licenses and permits to ensure it can make a profit off the pulp and briquettes, Ekern said Wednesday.
“That is what both we’re looking for and our financing partners are looking for. That’s really the linchpin to get started,” he said. “And as everyone knows, that was really one of the critical failures last time.”
Karen Fussell, the Municipal Review Committee board president, said Revere and the Department of Environmental Protection are close to finalizing agreements on those changes, but they aren’t likely until after the holiday season.
The plant still needs an operator.
Early in its partnership with the Municipal Review Committee, Revere turned to a company called CS Solutions to serve as the new operator of the shuttered trash plant and help develop a reopening plan.
That company, however, withdrew in August following Bangor Daily News coverage that highlighted its roots in a failed New Hampshire-based investment company that failed to follow through on its pledge more than a decade ago to reopen the Katahdin region’s two paper mills and start a facility there making wood pellets. In the process, the company, Cate Street Capital, benefited from tens of millions of dollars in state and federal tax breaks and lending.
After CS Solutions withdrew from the Hampden trash plant operation, the Municipal Review Committee and Revere needed more time to iron out a deal, and to come up with a facility operator and reopening plan.
What happens next?
Now, the Municipal Review Committee and Revere plan to close the deal in two phases, with the first being completed on or before Jan. 25, and the second weeks later.
The first phase can happen once the plant has secured changes to its state permits, Fussell said.
Revere and the Municipal Review Committee will formally become partners in the first phase, when Revere and its investors will gain a controlling interest in the Hampden trash.
Revere and the Municipal Review Committee will then review and approve an engineering report on the facility and a property improvement plan, Fussell said.
“Then, there’s the part two closing, which is the larger financing needed to fully restart the plant,” she said Wednesday.
The plan is to have the plant operational sometime next year, Fussell said.
Revere has received several proposals for the engineering review, which would take 45 to 60 days to complete, Ekern said.
“That leaves us in this process that has taken us longer than we hoped — I think everyone agrees with that — but probably not longer than we anticipated,” he said.
In 60 to 90 days, Ekern estimated, Revere and its investors will have secured the changes they need to the facility’s permits and licenses and received the engineering report.
“Then we’ll be in position to start drawing capital and spending capital,” he said. “That’s the process.”
Correction: An earlier version of this article incorrectly detailed the closing process that is set to take place in January.