Old Town mill taxes unpaid G-P, Red Shield dispute who owes

OLD TOWN – More than $800,000 is owed to the city in taxes for the former Georgia-Pacific Corp. mill, but the due date passed last week without the bill being paid, and there’s confusion over who has to pay.

G-P said it doesn’t owe the money because it sold the facility and that it’s up to new owner Red Shield Environmental to foot the bill.

“That amount was to be paid by Red Shield,” said Kelly Ferguson, G-P senior manager of business unit communications, said Monday from the company’s Atlanta headquarters.

Red Shield doesn’t dispute its just over $600,000 portion of the bill and intends to pay it, but refuses to pay for personal property tax on paper machines that were left at the site but weren’t included in the sale.

“We don’t dispute the bill,” Red Shield chairman Ed Paslawski said Tuesday, referring to his company’s share of the bill. “We intend to pay.”

The city says that technically G-P is responsible for the entire $808,026 because G-P owned the mill on April 1, 2006, when the city completed its assessment of the mill property. The city’s tax bills run in six-month cycles, and G-P paid the first approximately $808,000 last September.

Interest already has begun accruing on the bill at “a pretty hefty rate” of 11 percent, City Manager Peggy Daigle said Monday. The next step will be to place a lien on the property if the money doesn’t come in.

G-P decided to close the mill about a year ago, leaving about 450 people out of work, and the city without nearly $80 million in property tax valuation.

Since then, the property has been sold to Red Shield Environmental, a group of private investors who have rehired about 50 former employees and are using the biomass boiler to heat the facility and produce power to sell to the region’s power grid. The company plans to produce ethanol at the site.

“Red Shield is responsible for the second six months of taxes, except G-P never sold the paper machines to Red Shield,” Jack Cashman, senior adviser to Gov. John Baldacci, said Tuesday. “[G-P] owes the taxes on the paper machines. They were not part of the sale.”

Cashman said G-P is arguing that it sent Red Shield a letter in February saying that everything left in the facility was being turned over to the new owner.

“G-P drilled holes in the paper machines so there’s no value to them anymore,” Cashman said. “They can’t get out of paying it by sending them a letter.”

The paper machines were valued at $50 million to $60 million before they were damaged, but can’t be sold or used in their current condition.

“G-P does owe those taxes,” Old Town tax assessor Bill Mayo said Tuesday. “Whoever the owner is, in state law, as of April 1, they owe that year’s taxes. Technically, by law, they [G-P] owe those taxes.”

Mayo added that such confusion isn’t rare when a new owner takes over and taxes aren’t pro-rated as part of the sale.

“This spring, we’ll be putting liens on properties for unpaid taxes,” Daigle said. “If they’re still unpaid, then we’ll be liening the property.”

A lien on real estate can be issued by a state or local government for nonpayment of taxes and the property eventually can be foreclosed, or sold, to regain the lost money.

Any lien that is filed, however, legally would be filed in the name of whoever owned the property on April 1, according to Mayo.

“It doesn’t matter if it’s a large corporation like the paper mill, or just a homeowner,” Mayo said.

For most people, a lien would affect their credit, but any lien against G-P may not have much impact because of the company’s multimillion, perhaps billion-dollar status.