GNP, E. Millinocket spar over documents > Mill: Property overvalued by $84 million

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BANGOR – Great Northern Paper has filed suit against the town of East Millinocket claiming the municipality is seeking more information than is required by state law in its review of the papermaker’s request for a tax abatement.

East Millinocket, however, counters that the documentation is needed to properly re-evaluate the company’s assessed value and whether it should grant the abatement.

In February, GNP asked for the abatement, claiming its real estate and personal property, which includes machinery and equipment, were overvalued by $84 million for the tax period of 1999-2000.

The appraisal valued the East Millinocket real estate and personal property at $204 million.

Taxes on the disputed $84 million are more than $1.5 million.

Between February and late July, attorneys for East Millinocket asked GNP attorneys for documents ranging from financial statements to executive compensation reports to the lists on the amount of materials in landfills at GNP’s mills, according to court documents.

The town’s last request, in late July, for more information was discussed with East Millinocket attorneys and an agreement was reached between the town and the mill over what would be submitted.

GNP claims the town in the last couple months reneged on the agreement and wants all the information it initially requested, according to court documents.

Also requested are valuation or appraisal estimates on GNP prepared by Inexcon, the Canadian company that purchased GNP last year.

Last week, GNP said that request was beyond what is required under state law, and this week it filed suit in Penobscot County Superior Court to stop the town’s efforts.

“The request appears to be little more than an attempt to crush GNP’s abatement rights under the weight of an extraordinary fishing expedition for irrelevant or marginally relevant information,” according to GNP’s court documents.

“The request is overly burdensome, duplicative and seeks information far beyond that provided for under [state law].”

Lee Bragg, an attorney for the town of East Millinocket, said Thursday afternoon that the municipality’s request for more documents is within its rights under the law to consider an abatement.

He expects to file a response to the lawsuit as early as today.

“I think the bottom line is they have a substantial amount of relevant documents they have not produced that the assessor and the appraiser feel they need to successfully assess the mill,” Bragg said.

“I have to assume that just because they have chosen to sue the town they have other information they don’t want the town to see.”

Bragg said he is unsure about what documentation still needs to be filed by GNP because the number of requests and counter-requests between the town and the papermaker have made the abatement process cumbersome.

“To some extent, we don’t know [what’s missing],” said Bragg, noting the town’s requests have been reasonable.

“There’s some documents we’ve asked for that are kept by businesses in the normal course of doing business. We simply assume they have them because most businesses of this type have them.”

GNP is seeking the abatement because it believes the town failed to rely on an appraisal it commissioned on the mill’s real estate and personal property in East Millinocket.

Attorney Martin Eisenstein, representing GNP, could not be reached for comment and did not return a message. Bragg said the appraisal GNP wants used was never received from the company contracted by the town and the mill to do it.

In 1995, GNP and East Millinocket agreed to have a company appraise the real estate and personal property.

That company did not complete the assessment in the requested time, Bragg said.

“The town never received a valuation report and they [GNP] have been under the impression that it has,” Bragg said.

“The mill never received a valuation report.” In 1998, GNP and East Millinocket, without an appraisal, “sat down at the table and agreed on a number,” Bragg said.

“For the mill to argue that the town failed to rely on some prior appraisal is just fiction. There is no prior appraisal. There was this agreement.”

That agreed value was between $210 million and $220 million, he said.

The 1999 valuation of $204 million allows for depreciation, he said.