December 18, 2018
Greetings from Our Katahdin,
We have been working hard to get the Millinocket mill site open and ready for business. Last week, we suffered a setback that we want to share with you. With the IRS lien continuing to block our $6.7 million in infrastructure funds, we have been unable to provide infrastructure needs within required timelines, so LignaTerra has made the business decision to no longer locate their initial manufacturing operations on the Millinocket mill site.
In an effort to have transparent and open communication with the community, we regret that we prematurely announced this opportunity. We pride ourselves in being results-driven and we have struggled to resolve the IRS lien within expected timeframes, leading to this unrealized opportunity.
We invite you to join us for a town hall meeting on December 27th from 6:00pm to 7:30pm at the Katahdin Higher Education Center in East Millinocket to discuss progress and challenges to date, as well as solutions moving forward.
Indeed, the IRS lien remains the most prominent barrier to rebuilding the site's infrastructure and in moving forward with the vision of creating a multi-tenant industrial park. Over the past 18 months, we have submitted Offers in Compromise to two offices of the IRS. We have been rejected by each office for two primary reasons: (1) we are not preventing the loss of jobs (as those papermaking jobs were lost years before our effort) and it is not clear if creating new jobs fits their criteria, and (2) the IRS is over-valuing our assets since it does not consider the current condition of buildings. We are launching a full appraisal process now to appeal this decision. At the same time, we are seeking sources of finance to pay the debt in full, should our appeal be denied.
The IRS lien is not only seen as a risk by potential businesses who seek to locate on the site, it is also directly blocking our ability to deploy the $6.7 million in infrastructure funds we successfully raised for the Millinocket mill site that will specifically deliver power, water, wastewater, rail, roads and fiber optics to strategic locations on the site.
Cross-laminated timber (CLT) remains a top priority in redeveloping the Millinocket site. We believe the Katahdin region is situated at the perfect intersection between the northern Maine wood basket and the growing Northeast market for CLT. We continue to actively engage with multiple companies who have selected the Millinocket site as a primary location of interest. These companies include data centers, biorefineries, aquaculture farms, and others.
There continues to be strong interest and opportunity at the Millinocket site because of its position within Maine's vast forest; reliable, affordable hydroelectric power from Brookfield Renewable; rail access via CMQ Railway; wastewater discharge and clean, cold water onsite. Despite this setback and the continued work needed to resolve the IRS lien, we remain confident in the road ahead.
For those who can, please join us on December 27th at 6:00pm in East Millinocket to discuss progress and challenges in all major aspects of our work, including community revitalization projects, broadband infrastructure deployment, the recent groundbreaking of the revitalization of the building at 230 Penobscot Avenue (“Miller’s”) and our work on the mill site. We would be grateful for your questions and ideas.
Most of all, Merry Christmas to you & your families,
Sean, on behalf of the Our Katahdin Board