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As president of Our Katahdin, the grassroots nonprofit organization that’s working to redevelop the shuttered Great Northern Paper mill in Millinocket and bring back good-paying jobs to a region still suffering from paper mill closures in the last decade, Sean DeWitt and his team are juggling several balls to make that happen.
There’s a broadband initiative under way in Medway, East Millinocket and Millinocket to create a fiber network that will enable local businesses to compete effectively in a global economy. There’s ongoing negotiations with the Internal Revenue Service for partial forgiveness of $1.4 million in back taxes owed by the mill’s former owners, which the nonprofit took on when it purchased the 1,400-acre mill site for $1 in 2017. And there’s the promising announcement in February of the plans by LignaCLT Maine LLC to build a 300,000-square-foot manufacturing plant on 35 acres of the 1,400-acre site now owned by Our Katahdin to make cross-laminated timber and bring 100 jobs to the region within five years.
Each of those initiatives requires allies, ranging from the forest products and business development expertise provided by the University of Maine and Husson University, timely advocacy by Maine’s congressional delegation and the Governor’s office, and financing by local banks and federal agencies like the U.S. Small Business Administration and the U.S. Department of Agriculture’s Rural Development office in Maine.
So when the SBA’s regional New England Administrator Wendell Davis drove up from Boston last week to see what Our Katahdin was up to at the shuttered Millinocket mill site, DeWitt and his team welcomed that opportunity. Davis toured the mill site and then sat down with Our Katahdin to provide an overview of SBA’s loan and business development programs.
“It opened our eyes to the breadth of support that’s available through the SBA,” DeWitt said in a telephone interview with Mainebiz the day after his meeting with Davis. “It’s such a big site at the mill, we don’t normally think of SBA as a core partner [for the mill’s redevelopment].”
DeWitt said Davis outlined the various programs offered not only by the SBA but also by the USDA’s Rural Development office in Maine that could help both startups and existing Katahdin Region businesses with an array of programs.
DeWitt said he learned how SBA and the USDA Rural Development offices in Maine can work together to provide access to capital and help startup ventures turn their ideas into solid business plans with a solid foundation for success.
“When we hear that local entrepreneurs are thinking of launching a business, we were encouraged to have them call SBA and USDA so that they’ll have a better notion of what their options are,” he said. “It’s going to take some time to build the entrepreneurial system we need, but we know the SBA and the USDA are there to help us.”
In a telephone interview with Mainebiz following his meeting with the Our Katahdin team in Millinocket, Davis said the visit was part of a several-day swing through Maine to highlight a recent “memorandum of understanding” that senior leadership of SBA and USDA in Washington, D.C., signed to better coordinate their efforts and delivery of programs that are particularly geared to improving rural business and agriculture economies.
In addition to meeting with Our Katahdin in Millinocket, Davis and the SBA’s Maine District Director Amy Bassett also visited Maine Development Foundation in Augusta, Eastern Maine Development Corp. in Bangor and met with the staff of U.S. Rep. Bruce Poliquin, R-District 2, at his Bangor office to provide updates on SBA and USDA Rural Development programs and to discuss any issues raised by constituents.
He also joined Maine State Director of USDA Rural Development Timothy Hobbs in leading a roundtable discussion with small business lenders in Augusta, allowing them time to ask questions and provide feedback on their experience with SBA and USDA Rural Development programs in Maine. The focus of the discussion was on program areas covered by the recent memorandum of understanding, including lending programs and the overlay of HUBZones designated by SBA, and rural markets identified by USDA.
Davis said the feedback would be used to help enhance access to programs and to improve the ease of use for both lenders and small business clients.
“We are honored to work with USDA across rural Maine to seek innovative methods to bring more private and public capital and investment opportunities to rural communities allowing for strategic growth over time,” Davis said. “We are working with local governments, chambers and community organizations to reach as many aspiring and existing entrepreneurs as possible to help educate rural areas on the many ways that SBA and USDA may assist them to start, grow, expand or recover their small business.”
In simple terms, Davis said, the SBA-USDA memorandum of understanding is “to make sure we can reach as many people as we can in rural communities.” Getting out of his Boston office and hitting the road in Maine, and later New Hampshire, is an obvious way to hear directly from local economic development organizations what’s working and what’s not.
A less tangible but equally important result of the MOU, he said, is that it has encouraged both agencies to work more closely together and understand better how they might complement each other’s programs to better serve Maine’s rural businesses and aspiring entrepreneurs. For example, he said, all SBA employees received training in the various USDA programs to give them a better understanding of how they worked.
In a written statement, Hobbs said he was pleased that USDA Rural Development and SBA formed what he described as “this innovative partnership to deliver programs to rural small businesses.”
“USDA Rural Development is a unique agency in that we have the ability to focus on the needs of rural areas in Maine,” Hobbs said. “By investing in homeownership, essential infrastructure such as broadband, healthcare, and water and wastewater systems, we create vibrant Maine communities where rural small businesses can flourish.”
Davis said the SBA is on track this year to increase its financing assistance to small businesses over its 2017 dollar volumes, with SBA nationally on target to approve $34 billion in loan guarantees to small businesses throughout its 68 district offices across the country — which would mark a 13% increase over the 2017 loan volume of $30 billion.
In Maine for 2017, the SBA’s total lending dollar amount was up by more than 26% — with 303 7(a) loans totaling $68.5 million (a 3% increase over 2016) and $56 million in third-party 504 loans (a 56% increase over 2016).
Davis said so far this year New England small business owners have leveraged SBA loan approvals into approximately 12,000 jobs created and another 14,000 jobs retained.
“All of this is made possible by our network of lenders and Resource Partners – SCORE, Small Business Development Centers , Women’s Business Centers and the Veteran Business Outreach Center,” he said.
Asked what might have impressed him about Our Katahdin’s efforts to repurpose the shuttered Great Northern paper mill, Davis quickly answered that the first thing was the fact that the nonprofit’s members were from the greater Millinocket region.
“For me, when you have stakeholders who are active in a local redevelopment effort, that’s the first thing you need to be successful,” he said. “They are willing to put their time and resources on the line.”
Typically, he said, SBA comes into the picture “after the fact,” when an established business owner or startup has a particular need or goal and begins looking for financing to address it. So he was glad the meeting enabled him to help educated DeWitt and others on Our Katahdin’s team learn about SBA and USDA programs so that they can take advantage of them in early stages of their redevelopment efforts.
“I found their story no less than inspiring,” he said. “I was really impressed with their resolve to revitalize the Katahdin region’s economy and the entrepreneurial spirit they are bringing to that challenge.”