OLD TOWN – It was slightly more than a year ago that Gov. John Baldacci and then Economic Development Commissioner Jack Cashman promised to find a buyer for the Old Town mill, left vacant by Georgia-Pacific Corp. when it closed the facility and left 450 people out of work.

“The foundation here is continuing to build and grow,” Baldacci said Monday. “If we could have turned this around earlier, we would have done cartwheels.”

Despite a slower than desired start and some problems along the way, the mill’s new owner, Red Shield Environmental LLC, is making progress, and local companies are beginning to see the multiplier effect.

“When Georgia-Pacific walked away, we thought this might be the end,” Duane Lugdon, a representative of the United Steelworkers union, which represents unionized millworkers, said Monday.

But it wasn’t the end, and at a press conference Monday, Red Shield and state officials announced the addition of another 130 jobs with the startup of the mill’s pulp operation and more jobs expected in the future.

Red Shield Chairman and Chief Executive Officer Ed Paslawski touted several projects planned in addition to the pulp operation, and said that in the next 12 months, his company intends to make $100 million in capital investment in the site.

A Red Shield subsidiary also is developing four wood pellet lines and a commercial scale pellet cogeneration plant.

Products produced by the University of Maine advanced engineered wood composites facility additionally are slated to be commercially manufactured at the site.

“The potential sales for that are international,” Paslawski said.

In addition, Red Shield is negotiating with a hydroponics company that would employ 175 people at the site.

“The multiplier effect on the local economy, I think, will be substantial,” Paslawski said.

Representatives from heat pump manufacturer Hallowell International LLC also attended Monday’s press conference, and owner Duane Hallowell said he still intends to develop a commercial pump operation at the Old Town site.

“We’re doing very well in Bangor with our residential product,” Hallowell said.

Marketing for the commercial pumps has begun, and Hallowell said he hopes to have started setting up in Old Town by the end of summer.

“I’m moving as fast as I can,” he said, adding that he has other products under development.

The heart of Monday, however, wasn’t about the products or the facility for company officials.

“I think it’s important that this day is for the employees,” said Dick Arnold, Red Shield environmental site manager.

The announcement that the project is taking shape after some struggles with emissions violations and machinery troubles means a lot to the former G-P employees who have come back to try to breathe life into the facility once again.

“I want to see other people back to work,” Jim Bosse said Monday inside the mill. Bosse is one of about 50 employees brought back to work last November who have been working hard to get things going so more of their former colleagues can return to the site.

Bosse has worked at the mill 42 years, and although he’ll be ready to retire in about seven months, it’s exciting for him to see the facility operating.

“The more jobs you get back, the better it is,” he said.

The start of pulp production brings the total number of people employed at the mill to about 180. In addition, two Maine companies that previously were supplying green wood to operate the mill’s boiler also will provide the wood supply for pulp production at the site.

“But this is still just the beginning,” Baldacci said.

Monday’s announcement is the first step in a collaboration with the University of Maine to use the pulp process to produce ethanol, a substitute for MTBE, methyl tertiary-butyl ether, found in automobile gasoline. Some places are outlawing MTBE because it allegedly causes cancer and has been found in water supplies.

For now, the high-quality hardwood pulp will be sold to other facilities, but UM has received a $10.35 million grant to conduct research on using the pulping process to make ethanol, plastics, industrial chemicals and other products now made with oil.

With the three-year grant, which consists of $6.9 million from the National Science Foundation and $3.45 million in matching money from the state, UM researchers will help determine the kinds of products that could be made from wood byproducts, how to make them, and how to market them.

In addition to ethanol, the process creates other salable byproducts, such as carbon dioxide for beverage carbonation and dry ice. The process is expected to be up and running within the next two years.

“I think this is a proud day for the university,” Hemant Pendse, UM professor of chemical and biological engineering, said Monday. “We are going to show everybody how it can be done here.”