Frequently Asked Questions about Our Katahdin’s acquisition of the former Great Northern Paper assets in Millinocket.
1. What is this transaction?
Our Katahdin, a 501(c)(3) non-profit organization based in the Katahdin region, has acquired the former Great Northern Paper assets in Millinocket, including all property, designations, and liabilities held by GNP West, GNP Holding II, and the New England Center for Business Development. Transfer of stewardship of the properties was finalized on January 11, 2017, for the price of $1.
Holdings include the 1,400 acre former mill site, land adjacent to the Millinocket Municipal airport, a 157 acre parcel of land at Ferguson Pond and several additional parcels in Millinocket. The acquisition includes a Regional EB -5 Center, which is a valuable federal designation that enables foreign investors to invest in projects in the United States.
Discussions about the mill site began between the GNP entities and Our Katahdin in the summer of 2016.
2. Who is Our Katahdin?
Founded in December 2014, Our Katahdin is a 501(c)(3) nonprofit organization focused on community and economic development in the Katahdin region. It has partnered with local community leaders to crowdfund and implement 21 projects in the Katahdin region since December 2014. It also purchased the historic downtown property at 230 Penobscot Avenue (a.k.a. “Miller’s Building”) in September 2016 and has applied for 3 federal and state grants to aid in its revitalization. Its Board members are sons and daughters of the Katahdin region and include: Nancy DeWitt, Mike Faloon, Tony Foster, Michael Osborne, Sean DeWitt and Michael Seile Jr
3. Why is this transaction important?
The largest newsprint paper mill in the world was constructed on the Millinocket mill site with good reason. The Katahdin is region is home to unsurpassed industrial, natural and human assets. The region has ready access to roads, rail, water, vast sustainable working forests, affordable renewable hydropower and a hardworking industrial work force. Unfortunately these assets have not been able to be put to use in recent years. This transaction puts a 1,400-acre industrial asset in the hands of the people of the Katahdin region.
4. What are the assets and liabilities involved in the transaction?
The assets include the 1,400-acre former mill site, land adjacent to the Millinocket Municipal airport, a 157-acre parcel of land at Ferguson Pond and several additional parcels in Millinocket. The acquisition also includes a Regional EB-5 Center, which is a valuable federal designation that enables foreign investors to invest in projects in the United States.
The acquisition comes with approximately $1.4 million in tax liability to the IRS and $164,000 in back real estate taxes as well as additional back taxes on business equipment owed to the Town of Millinocket.
5. Why this acquisition instead of foreclosure on the mill site due to unpaid back taxes?
Foreclosure by the Town would have given the Town the option to own the mill site. The acquisition by Our Katahdin involves the mill site, all other former Great Northern Paper assets in Millinocket (including the land adjacent to the airport needed for its expansion) as well as the EB-5 Regional Center. Foreclosure would have also forced the Town to inherit the lien from the Internal Revenue Service that exists on the property. The acquisition means Our Katahdin will work to resolve this lien as soon as possible to render the site unencumbered. The acquisition also avoids the long legal and administrative process associated with foreclosure, bankruptcy and liquidation.
This transaction also includes the transfer of an EB-5 Regional Center to Our Katahdin. If foreclosure happened on the mill site, the EB-5 Regional Center would not have been part of this foreclosure given that it is a separate company that does not own land. Therefore, this unique, valuable opportunity to promote investment in the mill site and in the Katahdin region would have been lost permanently.
In addition, this transaction preserves existing environmental liability protections for the site through the State of Maine DEP’s Voluntary Response Action Program (VRAP) program. If foreclosure had taken place, the current VRAP would have been negated and new agreements would have needed to be established at a cost to the town and resulting in further delay and cost in re-development.
Most importantly, the acquisition allows Our Katahdin and the Town of Millinocket to partner together to harness their mutual strengths, relationships, experiences and capabilities, rather than leaving the responsibility of site redevelopment process solely to the municipality.
6. What is an EB-5 Regional Center?
An EB-5 Regional Center is an organization designated by United States Citizenship and Immigration Services (USCIS) that creates local jobs through foreign investment. An EB-5 regional center deploys local investment from foreign investors who in turn receive an EB-5 investment visa to the United States.
EB-5 Regional Centers facilitate direct investment in projects that meet the job creation and economic development goals of designated geographic areas in coordination with regional economic development agencies.
7. Isn’t Our Katahdin focused on community development projects?
Our Katahdin believes in small wins. Since its launch in December 2014, Our Katahdin has focused primarily on community development through its “platform” approach. This approach involves engagement with the people of the Katahdin region to define its way forward. Our Katahdin will employ these same principles of (1) local engagement and (2) small wins in the redevelopment of the Millinocket mill site. While redevelopment will not happen overnight, effort can be made now to start the process, and Our Katahdin stands ready to work with any and all partners to make this a reality.
That said, Our Katahdin also has every intention of continuing to ramp up its efforts in community revitalization as well, which are equally as important as economic development. We believe in the future of the Katahdin region.
8. What is Our Katahdin’s vision for the former Great Northern Paper mill site in Millinocket?
Our Katahdin believes the former Great Northern Paper mill site can be redeveloped to become a world-class bio-industrial park. The fast growing bio-economy focuses at the intersection of new technologies and abundant renewable natural resources, including forests, hydropower, agriculture and aquaculture. We envision the park will be home to a number of small-