MILFORD – A Canadian firm has put on hold its plans to take over the former International Paper facility known as the old Costigan stud mill. That decision has left Milford in a predicament, according to Town Manager Jim Hancock.

Daaquam Maine Inc., a subsidiary of a Canadian company based in St. Juste, Quebec, was scheduled to have the mill up and running sometime in 2004. That plan has been delayed by problems with the company’s operations in Canada, according to Hancock.

“They’ve decided not to open up, which has put the town in a very precarious position,” Hancock said Thursday.

The town now will have to re-evaluate its mill rate, and Hancock anticipates that it will add a mill to the tax rate.

Attempts to reach Daaquam officials for comment Thursday were unsuccessful.

In June, the town manager estimated the tax rate to be $21 per every $1,000 of valuation, and said he expected that number to drop 1 or 2 mills once the town’s property revaluation figures came in.

“We were counting their $160,000 as part of a TIF [tax increment financing] agreement [from Daaquam] that we’re not going to get,” Hancock said.

The town now will assess the property for “property’s sake to get an actual value of what they’ve got there,” the manager said.

“From what we got from them, they’re having a big spruce budworm problem in Canada,” Hancock said. “They just didn’t think it a prudent time to put their money here.”

The town manager said the company’s decision came as a surprise, but he thinks Daaquam is still planning to open the facility in the future.

Daaquam was founded in 1956, and was initially a family business. In 1987, current chairman and CEO Richard Belanger and vice president of operations Yvan Pouliot became active in the company. By 1996, they had acquired all shares in the company.

Daaquam Maine Inc. is a subsidiary of parent company Canfor Corp., which is based in Quebec.