New Markets, other options for GNP mills

It’s said a little knowledge is a dangerous thing – and so Carle Gray’s column (BDN, “Get down to business and bring back GNP,” Jan. 23) did more harm than good by adding uncertainty to an already precarious situation.

It’s distressing that, though Gray found time to write his column raising questions about the New Markets tax-credit initiative I’ve discussed, he never bothered to call my toll-free office line to find out the answers himself. With 1,130 workers idled as a result of the Great Northern Paper bankruptcy, and the potential for a devastating ripple effect throughout the region, Gray’s column does a disservice to every worker by creating additional unease at a time we need to pull together to get the mills back on line.

The New Markets approach is just one tool in the array of options I’m researching to help bring Great Northern back on line. But I believe it’s an approach worth pursuing. In fact, one of the company’s major creditors suggested I pursue this option, as it could help attract investors.

Congress enacted the New Markets Tax Credit (NMTC) program on the last day of the 106th Congress in 2000, with the goal of generating $15 billion in new, private-sector investments in low-income communities. Administered by the U.S. Department of the Treasury, the plan is designed to stimulate new investments by providing a 39 percent tax credit to taxpayers, distributed over a seven-year period, who make equity investments in qualified, nonprofit community development organizations like Maine’s Coastal Enterprises Inc. (CEI) – a proven, highly esteemed organization and job creator based in Wiscasset.

Last August, CEI submitted its $90 million application under the New Markets initiative, including $30 million specifically targeted toward sustained forestry, and I supported at the time upon its submission. This month, upon learning of the Great Northern bankruptcy, I began working with the Treasury Department to expedite review and approval of this proposal. This will be the first year of NMTC awards – and Treasury officials expect to be able to announce successful proposals next month.

As CEI’s president, Ron Phillips, says, the New Markets proposal provides incentives for private and equity investment that could encourage a potential buyer at Great Northern.

And to me, that’s the key to helping Great Northern: putting together a package of options that, together, have the potential for a workable solution. Indeed, I’ve focused on an array of choices since the company announced it was filing for bankruptcy. At a time when 1,130 workers are idled, and thousands others in the region affected, we need to examine every option, and to work with all parties, to find every way federal and state policies could help the mills reopen. So I’ve been working closely with Gov. Baldacci, who has been working vigorously to bring all of the parties together.

Maine’s congressional delegation has traditionally worked together on issues like this with so much at stake, and last Saturday Sen. Susan Collins, Rep. Mike Michaud and I met with town and union officials to address the issue. I’ve also talked repeatedly with the current owner of the company to encourage acceptance of a new management strategy; and spoken with the company’s major creditors to urge their support of efforts to get the mills operating again.

I’ve also worked at the national level to address issues that underlie Great Northern’s business difficulties in the long term. For example, I’ve personally urged Commerce Secretary Don Evans, and Trade Ambassador Robert Zoellick, to get tough on trade practices by the European Union and Korea that undermine our trade laws. I’ve underscored the importance of vigorously enforcing our trade agreements. And I’m working with the Treasury Department to address the strength of the dollar, and its impact on imports and exports.

Ultimately, proposals like the New Markets tax credit, coupled with encouragement to develop new management strategies and address economic conditions underlying the current paper market, could play a role in reviving Great Northern Paper. My goal in the long-term is to help develop the package that can restore the company to health, put the talented work force back to work, and to assure these mills continue to play a central role in the Katahdin region for years to come.

Olympia J. Snowe is Maine’s senior U.S. senator.