MILLINOCKET – It doesn’t look like Moscone Bantam Boiler Co. LLC will be opening a factory in the former Katahdin Paper Engineering and Research Facility, town officials said Friday.

After months of negotiations, Robert Moscone and Medway businessman Richard Day Jr., who are pushing the factory and the 150 jobs they hope to create within three years, apparently have ended negotiations with officials from Katahdin Paper Co. LLC, Town Manager Eugene Conlogue said.

Moscone and Day will split their factory effort between Moscone’s Bates Street shop and Day’s welding shop in Medway, Conlogue told the council during a brief report Thursday night. Moscone’s property has a large building to the rear. Councilors did not comment during the meeting.

Conlogue expressed surprise Friday that the deal fell through. Both sides had a tentative agreement in March that Bantam would move into the Katahdin Avenue facility, which Katahdin Paper Co. owns but is not using.

“We don’t know why it didn’t work out between Bantam Boiler and Katahdin Paper,” Conlogue said Friday, “especially after they offered the E&R building for as little as a dollar to the community last fall.

“They offered it to MAGIC and directly or informally to at least two different groups,” Conlogue said. MAGIC is a quasi-public agency funded by East Millinocket, Medway and Millinocket to create business and economic opportunity in those towns.

Moscone declined comment Friday and Day could not be reached for comment.

Glenn Saucier, Katahdin Paper’s director of human resources, expressed surprise Friday that Bantam would not be using the building.

“I have not been contacted by Bantam Boiler on any issue, one way or the other,” Saucier said Friday. “Our last discussion was several months ago. I was waiting for them to get back to me. As far as I am concerned, the ball is in their court.”

Saucier declined to detail the negotiations. He said that he and Katahdin Paper Mill Manager Serge Sorokin were go-betweens for officials at Brascan Financial Group of Toronto, which owns Katahdin Paper and other companies.

Council Chairman David Nelson and Conlogue expressed hope that the E&R, which formerly housed MAGIC, eventually would be used by Katahdin Paper or another business to create more jobs. The Katahdin region has unemployment that is about double the state average and 47 percent of its families living below the poverty line.

With Katahdin Paper – one of the area’s largest employers – receiving $1.8 million a year in TIF tax breaks from the state and more than that from the state’s decade-old business equipment tax reimbursement program, the company “needs to be more involved in the community as we develop new business and create new jobs in their corporate role as a ‘good neighbor,'” Conlogue said.

“We have no plans for that building right now,” Saucier said. “Unless somebody comes to us with a deal, we have no plans for it whatsoever. We haven’t touched it in three years, so there are probably things that need to be done to it, but it’s a good building.”

Moscone and Day qualified for a $400,000 state Community Block Development Grant in March involving the E&R building. Now, the grant will have to be approved by Medway’s town government and re-written to include the two municipalities, Conlogue said.

Conlogue and Nelson expressed confidence that Bantam’s boiler plant plans will eventually occur.

“I have been inside their facility. I have seen the product working. My church has one,” Nelson said Friday. “The Bantam boiler is a fantastic product that can be utilized to create jobs in the region.

“It presents a tremendous opportunity for the Katahdin region to be involved in a manufacturing effort such as this.”

“We are going to make it happen,” Conlogue said.