GNP, Millinocket reach deal on tax dispute
Great Northern Paper Co., which owns two Katahdin-area mills, has reached an agreement to pay the $2.24 million in delinquent property taxes it owes the town of Millinocket.
The Bangor Daily News reported that GNP reached the deal with the Millinocket Town Council in a special meeting on Monday — a move that will help clear the way for Cate Street Capital to develop its proposed $140 million wood pellet plant. Cate Street, a New Hampshire-based investment firm, formed GNP when it bought the Millinocket and East Millinocket mills in 2011.
Under the agreement, GNP will pay off the delinquent tax bill using proceeds from its planned sale of paper mill equipment from the Millinocket mill it has owned since 2011. If the sale proceeds don’t cover the full bill, the town will put a $2.24 million lien on the company. GNP also agrees to pay the town $1 million in property taxes for the 2014-2015 fiscal year.
The agreement doesn’t touch on the $657,900 in delinquent property taxes GNP owes the town of East Millinocket, where it owns a mill the company plans to reopen at an unspecified date. The mill halted operations earlier this year and laid off 212 workers.
“Cate Street and the town of Millinocket share the same objective of creating and maintaining economic development in the region,” Cate Street spokeswoman Alexandra Ritchie said in a prepared statement. “Collectively, we are pleased to have outlined a path to resolve GNP West’s outstanding property taxes to the town in the very near term and to be able to move forward in a cooperative manner for the benefit of the local community."
The towns of Millinocket and East Millinocket have been under extreme financial pressure because of the unresolved debt and the uncertain status of GNP's mills.
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