Mill towns brace for tougher times

MILLINOCKET – People in the Katahdin Region describe Great Northern Paper Inc.’s Chapter 11 bankruptcy as the latest big drop in a 16-year roller coaster ride of uncertainty.

Hundreds of retirees are worried about their company-paid health insurance.

More than 1,000 workers, who have been idle for the past 15 days during an extended shutdown, are wondering if they will see another paycheck.

Homeowners and parents are worried about making mortgage and college tuition payments.

Town officials are concerned about the flow of taxes from the paper mills, which provide the bulk of their tax revenues.

The mood was somber in the paper mill towns of East Millinocket and Millinocket.

“People are upset and nervous,” said George Nelson, the owner of George’s Barber Shop, located on Central Street in Millinocket. “People don’t know what will happen.”

Nelson, who moved to Millinocket 46 years ago, recalled how tough it was to find a place to live. “This place was a booming place,” he said. “There wasn’t one house for sale and … long waiting lists to get into apartments.”

Those were the days long before a hostile takeover and more than a decade of corporate downsizing, resulting in the loss of thousands of high-paying paper mill jobs and shrinking populations in the communities. Today, hundreds of homes are up for sale at very low prices.

“Housing is unbelievable,” said Nelson. “If you want to sell your home, you have to take what you can get.”

Nelson and others are concerned that even more people will leave the area. “The impact will be that the young will have to leave the area to get jobs, or people will have to drive a heck of a long ways to work, ” he said. The barber said he knew of five or six Millinocket men who work all week in Portland and travel back home on the weekends. “It’s expensive to live in Portland, but it’s a job,” said Nelson.

The Millinocket barber says the area needs a plan to promote its various recreational opportunities. We could use a resort, an 18-hole golf course, or a casino to bring money to this area, said Nelson.

Up the street at the Northern Shopping Plaza, Alan Pangburn, the owner of the IGA, says he hopes the area has seen the bottom.

“Sure I’m concerned, but is it the end of the world? No,” said Pangburn. “I’m optimistic there is going to be a buyer and we can move on from there.”

Pangburn, who came to Millinocket about eight years ago, said he has no plans to leave. “I love this community,” he said.

The grocery store owner, who employs 43 people, said his business was more affected by Ames Department store’s leaving than anything that has happened at Great Northern. He said as the population of the area has declined, shoppers from neighboring towns of Patten, Sherman and Mattawamkeag have supported Millinocket-area businesses. Without Ames, Pangburn and other businesses owners haven’t seen as much traffic.

Pangburn doesn’t want to see any more job losses, but is optimistic that the Millinocket Area Growth and Investment Council will bring another anchor store to draw more people to Millinocket. “We are very optimistic we are going to have it [the empty Ames Store] filled by late spring,” he said.

John DiCentes of Millinocket, a member of the Katahdin Area Retirees Association, says the group is planning a series of meetings to help retirees fight to keep their company-paid health benefits.

“People need their medications,” said DiCentes. “To shut that off is the direst deal I’ve ever heard of.” Using a prescription card, one couple he knows spends about $40 a month for medication, which will cost about $2,000 without the card.

Upcoming municipal and school budget deliberations in the towns of Millinocket and East Millinocket promise to be interesting this year, especially in light of the company’s bankruptcy filing.

Municipal leaders in Millinocket and East Millinocket are concerned about tax collections. The company pays 71 percent of the taxes in East Millinocket, or $3.43 million, and about 54 percent in Millinocket, or about $4.4 million, but so far has not paid any taxes on its paper mills.

Mary Morris, East Millinocket’s administrative assistant, said the town has obtained a $2.4 million tax anticipation note. She said the town has not had to use any of the money from the note, which must be repaid on June 30. She said selectmen will be discussing the tax issue during its upcoming budget deliberations.

Millinocket Town Manager Gene Conlogue says the town’s cash flow is OK right now. The town has a $1.2 million tax anticipation note, but it will run out of money by early June if GNP does not pay its taxes. “We are concerned what things will look like in the next three to four months if nothing changes,” said Conlogue.

In light of GNP’s filing, the Millinocket Town Council postponed a public budget hearing Thursday night.

Meanwhile, members of a Millinocket sportsmen’s group are concerned that the 200,000 acres of forestland the company placed in a conservation easement last summer as part of a deal with The Nature Conservancy could become part of a new national park if GNP fails financially.

Kent Wommack, the executive director of the conservancy, said GNP’s filing had no effect on the forestland because it was owned by a subsidiary of the paper company, called the Maine Timberlands Co. He said if the company defaulted on its obligation, the conservancy would not want to own the land, but would sell it to another timberland investor.