Millinocket Group 'Turning Over Every Rock' To Eliminate $1.4M Tax Debt That Scuttled Factory

Jan 10, 2019

A volunteer economic development group that’s trying to revive Millinocket’s former paper mill site is continuing to challenge a federal tax lien that has hampered its efforts. The lien most recently dissuaded a North Carolina forest products company from launching a $30 million factory on the site.

The group, Our Katahdin, filed a third appeal of the $1.4 million tax lien with the Internal Revenue Service last Friday — although the ongoing federal government shutdown will delay the IRS’ consideration of that appeal.

Our Katahdin is also seeking a new, more accurate appraisal of the mill site’s property value and looking at other options for getting rid of the tax lien, which the group inherited two years ago when it bought the 1,400-acre site for $1. The previous owner of the mill, Cate Street Capital LLC, had created two subsidiary organizations that owed $1.4 million to the IRS.

Until that lien is resolved, the organization won’t be able to spend a much larger amount of funding — about $8.76 million — that it has lined up for improvements to the mill site, the group’s president’s, Sean DeWitt, said Wednesday morning.

“The challenge we have now is that $8.76 million can’t flow, none of it, until we resolve this lien,” said DeWitt, who was was addressing a crowd of more than 300 at the annual business breakfast of the Bangor Region Chamber of Commerce. “So this is front and center for us here in 2019. It’s really holding the region back.”

DeWitt, a Millinocket native, was the keynote speaker at the breakfast, held at the Cross Insurance Center.

People attend the Bangor Region Chamber of Commerce's annual business breakfast at the Cross Insurance Center in Bangor on Jan. 9, 2019.
Credit Gabor Degre / Bangor Daily News


Along with discussing the tax lien, he described other efforts Our Katahdin has made to bring economic activity to a region battered by the closure of paper mills, including the creation of a co-working space, the pursuit of better broadband internet service and the wooing of companies in industries ranging from data storage to aquaculture.

DeWitt normally works in Washington, D.C., as a director at the World Resources Institute, an organization that researches the economic potential of natural resources, but he travels to Maine for his work with Our Katahdin. During his talk on Wednesday, he mentioned that he has multiple family members who worked at the Great Northern Paper Co. Mill that once employed thousands of people.

Sean DeWitt, president of Our Katahdin, delivers the keynote speech at the Bangor Region Chamber of Commerce's annual business breakfast at the Cross Insurance Center in Bangor on Jan. 9, 2019.
Credit Gabor Degre / Bangor Daily News

To help redevelop the mill site, Our Katahdin has secured multiple types of funding totaling more than $8 million to improve the roads and other infrastructure and convert the area into an industrial park, according to DeWitt.

Those funds include $5.3 million from the U.S. Economic Development Administration and lesser amounts from the Maine Rural Development Authority and from a New Market Tax Credit arrangement it’s working out with the Northern Forest Center, DeWitt said after his talk on Wednesday.

However, all that funding will only be released on the condition that Our Katahdin eliminate the $1.4 million tax lien from the Internal Revenue Service, which it so far has been unable to do, DeWitt said.

This story appears through a media sharing agreement with Bangor Daily News.