MILLINOCKET – Two town businessmen are seeking to use a $400,000 state grant Friday to turn an old Katahdin Avenue wood mill facility into a boiler factory and create as many as 150 jobs in three years.

If all goes well, Moscone Bantam Boiler Co. LLC eventually could become one of the Katahdin area’s biggest employers, Town Manager Eugene Conlogue predicted.

“The early number of employees is 15, but based on what we project will occur, Moscone will be hiring many more than that,” Conlogue said Friday. “As these boilers start getting built and they start to take off, you are creating very significant employment. You could see hundreds of people getting hired down the road.”

According to the application, partners Robert Moscone and Richard Day will use the money to revitalize parts of the former Business Resource and Innovation Center at 10 Katahdin Ave., hire at least 15 full-time workers and start building steel heating boilers for residential and commercial sale by August.

“This is all in the incubator stage, and we hope the first year that we can sell a few thousand boilers,” Moscone said Friday. “We might be over that.”

Work could begin in a few weeks.

Much must go right for the project to fly. Moscone and Day must conclude negotiations to acquire the BRIC building, the former Katahdin Paper Engineering and Research Facility, from the Katahdin Paper Co. Both sides have a tentative agreement, Moscone said.

The state Department of Economic and Community Development has to approve the Community Development Block Grant application, which takes about three weeks, said Bruce McLean, executive director of the Millinocket Area Growth & Investment Council, a quasi-public agency aimed at creating business in East Millinocket, Medway and Millinocket.

The application is competing with a “huge” number of applicants, said McLean, who took the application to Augusta on Friday to make the state’s deadline. If the application fails, Bantam can resubmit in May, he said.

Among area businesses that are or will be competing for a $400,000 grant are Lincoln Paper & Tissue LLC and two businessmen who want to build a bottling works in Medway, McLean said.

The state Department of Environmental Protection and other state agencies must approve permits to convert the BRIC, McLean said, which is not expected to be problematic.

And Moscone and Day must complete their business development plan and continue to build boilers and a distribution network to sell them. They are negotiating with national and overseas distributors and have regional and state distributors, Moscone said.

Moscone and Day need to build an organization to support their undertaking, McLean said.

‘There are a huge number of things you have to put in place to make everything work, and a lot of times people try to do it themselves, and with this project that’s not really feasible,” McLean said. “This represents a new level for both of them that they are going to have to have some people help them with.”

Yet council members, who voted 5-0-1 last week to support the grant application, are still excited about the plan. Moscone, who designed the first boiler built for typical-size residential homes in 1989, has laid much of the groundwork for success already, they said.

He has designed a product that can cut heating oil or natural gas bills by 30 to 50 percent or more, he and his customers have said, and has sold about 268 of his two residential-size models from his shop on Bates Street.

“To me, this is not a risk,” Councilor David Cyr said. “The market is already in place. They [boilers] are already going out the door; they’re being sold, and it’s a proven product.”

Despite a lack of marketing, word of mouth on Bantam’s product from potential investors and state officials since Moscone first announced his plans in late November has been excellent, said Conlogue, who has worked with Moscone for about six years.

“This is a moment of great personal and professional satisfaction because we have heard all the reasons why we can’t build these boilers here and now we have people coming forward to say why we can build these boilers here, and why we should,” Conlogue said.

In late November, Moscone received from a Mexico factory 110 more boilers that he is fitting for sale. Three more boilers, including an industrial-sized 500,000 BTU model and two small residential models, are ready for construction, Moscone said.

Various distributors have expressed interest in buying or moving about 2,500 more boilers if Moscone and Day can build them, he said.

Bantam’s plan “addresses a very significant issue in this state and in this country, and that is energy efficiency,” Conlogue said. “It makes no sense to me that we should be building these in Mexico when we could be doing it here in the state of Maine.”

“This is going to happen,” Moscone said. “We’re too far along on this now. The lights are green. There are no red lights stopping us.”