Tax lien on former Millinocket Mill halts plan for factory promising 100 new jobs

MILLINOCKET, Maine (WABI) - A North Carolina based company set to be the first tenant at the site of the former Great Northern Paper mill in Millinocket has pulled out.

They say they can't wait any longer for the site's owners, Our Katahdin, to resolve a federal tax lien against the property.

John Davis, Millinocket Town Manager says, "It's a setback, but they'll get through it."

A setback that's costing the site a tenant, LignaTerra, that promised to bring roughly 100 jobs to the region.

The group's plan to build a $30 million factory at the site now shuttered because of an inherited federal tax lien.

Steve Sanders, Director of Mill Site Redevelopment for Our Katahdin says, "You never really believe how long a process can take with the IRS until you go through one. So, it was probably a little naive thinking that we could resolve this in a quicker manner."

Our Katahdin, the owners of the former mill site, took over the debt totaling one and a half million dollars when they bought the property roughly a year ago.

They say the IRS has rejected compromise offers twice from the organization.

Sanders says, "It doesn't sound like progress, but it is because now we can go to an appeals and we have a path forward with reevaluating our property."

A process the organization hopes will finally resolve the issue and allow for redevelopment of the site.

Sanders says, "We hope to get the appraisals and new evaluations in hand in the next 45 to 60 days. That gets us going with the IRS, and then we hope to be doing phase one and phase two engineering and permitting on the site this summer."

Our Katahdin remains optimistic in its efforts for redevelopment, as does the town.

Davis says, "It's a little disappointing, but this IRS lien has been holding them up with a lot of different things and that was just another one."

Sanders says, "We remain very positive on the traction we can make with tenants to the mill site. There's a lot of assets there that we're putting back together, and we remain very positive. The hopes for the whole region lie up there and us being able to redevelop that mill site, and it's a challenge act we take with a lot of seriousness and a lot of pride."

We reached out to LignaTerra, which says they plan to open more than one wood composite facility in Maine.

They also say, should our Katahdin resolve the lien issues, there may be another opportunity to locate a facility in Millinocket.

Senators Susan Collins and Angus King issued a joint statement saying, "We share the organization's frustration over the federal tax lien that is preventing business and infrastructure investments. Our Katahdin unfortunately still faces major hurdles. We will continue to support their important efforts in the region to attract businesses and create good paying jobs."