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April 11, 2024

Planning advances for redevelopment of former paper mill in Jay

aerial view of blue building and snow Courtesy / JGT2 Redevelopment LLC The site’s new owner will demolish about 400,000 square feet of the former papermaking operation, leaving about 1 million square feet of industrial space.

Godfrey Forest Products in Bangor is the first taker on the redevelopment of the former Pixelle paper mill in the Franklin County town of Jay.

The new owner of the 1,000-acre property, JGT2 Redevelopment LLC, has said it will sell Godfrey about 84 acres to build a 300,000-square-foot manufacturing facility. If the project moves forward, the plant would make a construction plywood called oriented strand board. 

The sale would take place when permits for the factory are in place, which is expected to take about a year, Tony McDonald, JGT2’s lead on the overall redevelopment project, told Mainebiz.

Godfrey Forest Products’ principal, John Godfrey, is a Bangor native who previously developed OSB manufacturing facilities across North America, including the LP Houlton Facility in New Limerick. 

“I developed the OSB mill in Houlton in 1980, and here it is still running 44 years later,” Godfrey said in a news release. “I have every confidence that anyone coming to this site in 44 years will find the same thing in Jay.”

The plant is expected to employ over 150 people. 

In the pipeline

Other prospective users on the site are in the pipeline.

“We’re in discussions with several parties interested in portion of the buildings,” McDonald said. “But I’m 18 to 24 months away before I can do anything with the buildings because I’ve got to sell the equipment — the paper machines and the ancillary equipment.”

big sapce with yellow line on the floor and machinery
Courtesy / JGT2 Redevelopment LLC
The business attraction focus at the former Pixelle paper mill in Jay is on businesses that can benefit from the project’s proximity to forest resources.

An equipment auction is tentatively scheduled May 7-10. It’s expected it will take most of the summer for buyers to remove much of the equipment from the buildings and likely longer to remove the papermaking machines. 

“Then we need to do selective demolition inside the buildings to clean out the leftovers from the papermaking business,” he said. “So it’s 18 to 24 months before I can deliver a space.”

The condition of the buildings and infrastructure is great, he said. The mill was operating up until a year ago. The good condition was one of the attractions of buying the site, he added.

McDonald declined to cite the purchase price for the site. The purchase was financed with cash from the three partners behind JGT2.

It’s too early yet to say how much further investment might have to be made into the site, he said.

JGT2 — a joint venture of New Mill Capital Holdings, Infinity Asset Solutions and Camjay LLC — bought the site in December from Pixelle Specialty Solutions.

Six-decade history

Originally developed in 1965 by International Paper and subsequently operated by Verso Corp., the mill was acquired in 2019 by Pixelle, a Pennsylvania producer of specialty paper. 

In 2020, the mill experienced a major industrial accident when its pulp digestor exploded, bringing production to a temporary halt. Pixelle brought in pulp from other sources for a while, but in March 2023 the mill ceased papermaking operations for good. 

As soon as Pixelle placed the mill real estate and equipment for sale, New Mill Capital became aware of the opportunity. 

New Mill — with offices in Los Angeles, Michigan and Kansas City — is a national asset disposition firm that purchases and sells excess production equipment and real estate assets in a variety of manufacturing sectors. 

Infinity Asset Solutions is a provider of industrial disposition services in fields such as manufacturing and forestry. Camjay was founded by McDonald to invest in and manage the Jay property.

McDonald, a senior partner at commercial brokerage firm the Boulos Co. in Portland, said he’s teamed up previously with New Mill on two Maine projects: the redevelopment of the Hostess Bakery Plant in Biddeford in 2014 and the repurposing and sale of the former Madison Paper Mill in 2019 to GO Lab Inc. in Belfast. GO Lab subsequently developed the mill into a wood fiber insulation factory as TimberHP

In December 2023, New Mill and McDonald formed JGT2 Redevelopment LLC to acquire and redevelop the Jay mill.

The site comprises 1,000 acres of land and 1.4 million square feet of buildings, along with an existing 150-megawatt power plant connected to the grid.

Energy opportunity

JGT2 formed JGT2 Energy LLC to pursue opportunities presented by the land and the 150-megawatt interconnection to the grid. 

Hallowell engineering consultant RLC Engineering determined the site could support a 75-megawatt solar farm, making it one of the largest solar installations in Maine, able to power 25,000 homes. The existing connection to the grid made the solar opportunity particularly attractive, because connection is a significant part of the cost and development of solar farms, McDonald said.

In addition to the solar opportunity, the mill has three 50 megawatt-rated gas turbine generators connected to a dedicated natural gas line servicing the site. The 150-megawawtt generating capacity could power an additional 50,000 homes. 

The gas turbines were used in the papermaking process to generate electricity for the grid and to utilize their 900-degree exhaust to make steam for the paper plant. 

With no need for steam, JGT2 Energy has opted to run the gas turbines as capacity power generators, providing peak power when demands on the grid are high and additional power is required. The arrangement would have the gas turbines running relatively infrequently. The turbines provide dependability and quick-start capability  considered key to the needs of the grid for peak power on demand. 

Mansfield, Mass.-based energy supplier Energy New England and Portland consultant Competitive Energy Services provided guidance to assess the combined solar and gas turbine generation plant opportunity and bring it to  fruition. 

Competitive Energy Services has  since been retained to help bring the opportunity to market, as JGT2 Energy seeks to find a joint venture partner or buyer in the generating space. 

In addition to the energy assets held by JGT2, there’s an adjacent 25-megawatt hydroelectric plant owned by Eagle Creek Renewable Energy of Bethesda, Md. 

Real estate 

In developing the real estate, McDonald said the focus is on businesses that can benefit from the project’s proximity to forest resources.

JGT2 will demolish about 400,000 square feet of the former papermaking operation, leaving about 1 million square feet of industrial space, said McDonald. 

The spaces consist of free-standing buildings as small as 5,000 square feet up to a subdividable 950,000-square-foot main mill building that could be subdivided into sections of 60,000 square feet to 100,000 square feet to accommodate users of different sizes and needs, he said.

The main mill building has ceiling heights of 20 feet to 70 feet and overhead cranes throughout the facility with capacity in the 50-ton 90-ton range. 

Additional features of the site include rail lines running through the property with numerous spurs entering the buildings, offering enclosed loading and unloading capability. 

There's also a wastewater treatment plant, designed for a 50-million gallon per day run rate, considered potentially useful for certain process manufacturers on site or for treating wastewater from other locations.

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