Matthew Polstein’s classmates at Cony High used to hold their noses when the teen-ager walked down the halls of the Augusta school. That’s because he spent most of his free time during the late 1970s kayaking in what was then the brown and foamy water of the Kennebec River.His classmates don’t hold their noses any longer. Probably, a lot of them don’t even realize that the guide who took them white-water rafting last summer on the much cleaner Kennebec works for the guy they used to tease.

Polstein, 40, owns and operates New England Outdoor Center, the second largest outfitter in the state. His headquarters is the Rice Farm complex in Millinocket, which includes his Penobscot River base of operations, campsites and cabin tents as well as the River Drivers Restaurant. He also owns the Twin Pine Camps on Millinocket Lake and the Osprey Center in Caratunk, which includes the Kennebec River base, Sterling Inn & Guesthouses and campsites.

White-water rafting, his summer operation, has been successful offering vacation packages that include lodging, meals, rafting and a Jacuzzi. In the winter, his New England Outdoor Center offers similar packages for snowmobilers. Polstein attributes his success to being able to offer vacationers outdoor adventure along with indoor amenities and staying ahead of the curves in the industry.

“When we started 20 years ago, we decided we weren’t going to advertise to young men looking for life-or-death experiences on the river,” he said recently, seated at a small table in his restaurant, which overlooks the Penobscot. “We wanted to offer outdoor experiences with accommodations for families and the opportunity to cater to groups.

That meant fostering a relationship with people who were looking for a less aggressive camping or camplike experience and those who wanted amenities. That’s what we still do, but we’ve added snowmobiling and are basically a year-round operation.”

Over the past two decades, Polstein has gone from guiding small groups of strangers through Magic Falls during the short Maine summer to managing a year-round resort empire worth an estimated $4 million with 80 employees (25 of whom work full time, year-round), and an annual payroll of $750,000. The irony of Polstein’s success is that he rarely spends time on the water now.

The son of instructors at the University of Maine at Augusta, Polstein could not stand the halls of academia. In fact, he loathed being indoors and longed to be outside on the water in a canoe, a kayak, a raft – anything that would float.

He threatened to quit school more than once, but a teacher from the Dublin School persuaded him to spend his senior year at the private academy in Dublin, N.H., on the promise that he could kayak every day and compete on the school’s kayaking team. When winter weather kept students from practicing outside, they trained for slalom races in the indoor pool. After high school, Polstein attended Hampshire College in Amherst, Mass., but did not graduate.

“In western Massachusetts, you could paddle on the Connecticut River into December and then start again in February, if you didn’t mind paddling around the ice,” he recalled. “One summer, I took a job at Saco Bound [an Outward Bound program in southern Maine]. I taught white-water rafting and canoeing, so I could paddle all the time.”

In 1982, he left college to start a white-water rafting business on the Kennebec River. Polstein had a few rafts, a pickup truck and a van. There were no facilities and he met clients at a rest stop. That fall, he bought a 600-square-foot building with no running water to use as a base camp on the Kennebec. The next two years, he partnered with Sugarloaf in an effort to offer more amenities to rafters, but the 90-minute bus trip to and from the base camp was just too far, and he began looking for property closer to the river.

Although he spent his summers on the water, Polstein spent the rest of those early years in the halls of the State House in Augusta “fighting for the right to be on the river.” He and other outfitters successfully lobbied to raise the “river capacity,” meaning the number of rafters who could be on the river each day. As soon as that fight was won, Polstein said he waded into the battle over the Big A Dam and negotiated with Central Maine Power and Great Northern Paper over the amount of water they released on the rivers from their hydro power dams.

In 1987, Polstein bought and renovated the Sterling Hotel, an 1816 inn below The Forks in Caratunk along with 20 acres on Wyman Lake, where he eventually built guesthouses and campsites.

In the ’80s, he began doing a few excursions on the Penobscot River as well. But he could not offer the same overall quality experience on the Penobscot that he could on the Kennebec. Penobscot River clients had to stay at campsites or local motels that Polstein didn’t own. If customer service was inadequate, he couldn’t easily fix problems.

In 1990, he began looking for property in the Millinocket area and found the Twin Pines Camps on Millinocket Lake, a group of classic hunting cabins that included a lodge with an indoor swimming pool. Until 1997, he still didn’t have his own base of operations on the Penobscot. That year the $500,000 NEOC headquarters was completed. It includes offices, storage space for equipment, showers and changing rooms, a Jacuzzi and the River Drivers Restaurant.

To accomplish that kind of growth, Polstein said that he had to radically change the way he operated.

“For the first 10 years, I did everything,” he recalled. “Then I came to the realization that I couldn’t do everything I wanted to do, and grow the business, if I did everything alone. The real story isn’t me, it’s the dedicated people who’ve stuck with me. My river managers Davis Weatherby and Joe Apicella have been with me for 12 years and my operations manager, David Philbrick, has worked for me for eight years, since he was just 18.”

The ’90s also brought about personal changes for Polstein. He met his wife, Wendy, who worked as a graphic artist for a Portland advertising firm in 1994. She moved to Millinocket the next year, eventually managing the restaurant and overseeing the company’s marketing strategy. The couple were married in 1996 and their first child, Max, was born just a few weeks ago, on Oct. 1.

At the same time that Polstein was changing the way he thought about his own business, Millinocket and the surrounding communities were changing the way they thought about themselves. While the paper mills laid off workers and sought tax breaks, community leaders looked to increase the money brought into the region by tourists. The paper mills also became more willing to negotiate with outfitters about water flow on the river and welcomed the new business to help increase the tax base.

Polstein estimated he’s invested $2.9 million in the Millinocket area over the past five years. He said that although NEOC still generates about 50 percent of its revenue from the Kennebec River operation, the Katahdin region offers greater opportunity for growth and a larger pool of workers to draw from than the tiny Caratunk and Forks communities.

Marilyn Brunette, executive director of the Katahdin Area Chamber of Commerce, praised the Polsteins’ contribution to the community.

“They’re highly motivated people,” she said of the couple. “They’ve brought a lot of business into the community and they’re very involved with the Chamber and the town.”

Polstein is a member of the Town Council and belongs to several local organizations.

“Their business keeps growing and growing,” said Brunette. “This area has always had tourism to some degree because of Baxter State Park, but it [tourism] gets bigger and bigger every year because of operations like NEOC.”

The growth of Polstein’s business ventures parallels the growth in the white-water rafting industry. From 1985 to 1990, the number of rafters on the Dead, Kennebec and Penobscot rivers more than doubled from 44,540 to 90,129.

Rafting figures for 2001 are not yet available, according to Wende Gray of Raft Maine, the industry’s trade association. Northern Outdoors, the state’s largest outfitter, had 12,741 customers in 2000 and NEOC was second with 11,148. Gray said she expected those rankings to hold when 2001 figures are compiled after Dec. 1.

Those rankings also apply to revenue generated per rafter, she added, because the two companies are “true adventure resorts providing lodging, meals, retail sales and other outfitted activities.” Rafting revenues, excluding lodging, food, etc., make up only 45 percent of NEOC’s total revenue, according to Gray.

Polstein, however, breaks down his business revenue more simply into winter and summer, with the spring and fall being “shoulder seasons.”

“About two-thirds of our income is from rafting and about one-third is from snowmobiling,” he said. “Our busiest months are August and February and our slowest are November and April. We’re looking to increase our shoulder seasons with fishing in the spring and hunting in the fall.”

Polstein said he hopes to increase the company’s rate of growth from 10 percent per year to 15 percent per year and to decrease the percentage the company earns from its rafting operation to 30 percent, while increasing income from other areas of operation like snowmobiling and the restaurant. He added that he plans to remain competitive by paying more attention to detail than other outfitters do by staying true to NEOC’s mission.

As printed on its brochures, that mission is:

“To rekindle your spirit of adventure, to explore the outdoors with a level of service and amenities that exceed your expectations, to foster understanding and respect for the responsible shared uses of Maine wilderness – one of our greatest natural resources, to give you a vacation experience of high value you won’t soon forget.”

So, instead of getting his thrills seeking out that kind of adventure himself, Polstein now gets his kicks offering it to other people.

And after 20 years in the rafting business, he still looks longingly at the river.