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December 14, 2018

FAME financing to boost restart of Old Town mill, two other projects

Courtesy / ND Paper LLC
Courtesy / ND Paper LLC
ND Paper's efforts to restart the shuttered Old Town mill received a significant boost Thursday from the Finance Authority of Maine, which approved $12 million in tax credits for the project.

About FAME

Finance Authority of Maine is a quasi-independent state agency that provides financial solutions that help Maine people achieve their business and higher education goals. It is celebrating its 35th anniversary and helps to create a Maine workforce with good-paying jobs by focusing on the nexus of economic and educational development. FAME recently was recognized for the fourth year in a row as one of the Best Places to Work in Maine.

The Finance Authority of Maine approved financing for three projects, including $12 million in tax credits to advance the restart of the closed Old Town mill.

Collectively, FAME said in a news release on Thursday, the projects are expected to create and retain at least 700 jobs in Maine.

The other projects approved for financing by FAME's board involve an anaerobic digester renewable energy facility at Brunswick Landing and public infrastructure improvements in Westbrook.

Restarting Old Town mill

The Old Town project involves financing through the Maine New Markets Capital Investment Program for approximately $31.8 million in investments at the Old Town mill, which will be undertaken by ND OTM LLC. In connection with the private investments, a total of approximately $12 million in tax credits will be awarded over the next seven years.

The FAME board certified applications for investments in six community development entities, all of them LLCs: Stonehenge Community Development 124; CCG Sub-CDE 44; Enhanced Capital New Market Development Fund 58; Community Development Funding XXII; UA Sub-CDE XXV; and CIF XIV.

The companies will use the proceeds of the investments for capital improvements, investments in working capital, construction, equipment procurement and other related improvements in order to restart and optimize the pulp manufacturing plant at the former mill site.

FAME said that the project is expected to create or retain approximately 130 direct and 635 indirect and induced jobs related to the site, where the mill has been idle for more than three years.

In October, OTM Holdings sold the mill to ND Paper, a wholly owned subsidiary of Nine Dragons Paper (Holdings) Limited. ND Paper operates three pulp and paper mills in North America with combined annual production capacity exceeding 1.1 million metric tons, including the fully-integrated pulp and paper Rumford Division in Rumford.

"We are grateful for FAME's assistance with our plans for the Old Town mill," Brian Boland, vice president of government affairs and corporate initiatives at ND Paper, said in the news release. "The financing will help us expeditiously restart this idled facility that will ultimately supply pulp to a global base of customers. Even more importantly, an operating Old Town mill will once again provide, directly and indirectly, literally hundreds of well-paying jobs for hard-working Mainers."

FAME, in cooperation with Maine Revenue Services, has administered the Maine New Markets Capital Investment Program since the Legislature created it in 2011. The program is designed to attract investment in economically distressed areas of the state. It allows eligible investors to claim tax credits against state taxes in amounts up to 39% of a project's total cost. The maximum aggregate amount of tax credit authority is set forth at $250 million, of which after Thursday's award approximately $11 million remains.

Brunswick Landing renewable energy

Courtesy / Tranzon
Courtesy / Tranzon
The 1-megawatt anaerobic digester at Brunswick Landing.

FAME approved conduit bond financing for GIGME01 LLC, an operator of solid waste facilities. An entity formed by Genesis Industrial Group, GIGME01 is buying the Village Green Ventures' 1-megawatt anaerobic digester at Brunswick Landing. Genesis is renovating the existing digester and building an additional one to double the facility's capacity and improve performance, FAME stated in its news release.

The facility diverts biosolids from landfills and anaerobically digests them to produce biogas, which is then converted to electricity and fertilizer. It provides a significant portion of the electricity needs of the businesses at Brunswick Landing.

The work also will permit the injection of renewable natural gas into the Maine Natural Gas pipeline on the campus. The proceeds of the bonds will be used to finance the new capital improvements, as well as to refinance the cost of acquiring the digester.

FAME said the financing is expected to help to create and retain approximately six jobs, adding that the bonds to be issued for the project may not exceed $18 million.

FAME's Revenue Obligations Securities Program provides tax-exempt bond financing to eligible borrowers without any recourse or obligation on the part of the state. The bonds carry no liability or credit enhancement on the part of FAME or the state. FAME acts as a conduit for borrowers in order to allow them to access favorable interest rates and to help stimulate the economy and create and retain Maine jobs.

Westbrook's Rock Row project

Photo / Maureen Milliken
Photo / Maureen Milliken
The Main Street, Westbrook, entrance of the site where Waterstone Property Group plans a mixed-use development.

The final deal approved, also involving conduit bond financing, is for Dirigo Center Developers LLC, a company formed to build Rock Row, a large multi-use development at the site of a former quarry in Westbrook.

As part of the project, DCD has committed to building a number of public infrastructure improvements, both on the former quarry site and on other public land, including upgrades to public street intersections and two Maine Turnpike Authority exits. The bonds issued may not exceed $16.3 million.

The first phase of the multi-use development, a Market Basket supermarket and other retail, is expected to create up to 250 construction jobs, as well as an additional 250 permanent jobs related to the tenants of the development.

"FAME is pleased to support GIGME01's plans for efficiencies and continued operations on the former naval air station base at Brunswick Landing, as well as DCD's plans for the Rock Row project in Westbrook," said Jay Violette, chairman of the FAME board.

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