EAST MILLINOCKET – If Katahdin region leaders cannot develop a regional economic development plan to spend $75,000 created by the temporary shutdown of a Millinocket paper mill, Eastern Maine Development Corp. will do it for them.

Maine Economic and Community Development Department officials relayed that message to the towns’ officials Monday in response to complaints that Millinocket leaders had their town designated the region’s new economic development agency, and received a $75,000 payment for it, before the other towns knew of it.

DECD Commissioner John Richardson ordered the money frozen until a plan is developed. If that doesn’t happen, EMDC, a regional development agency on retainer with Millinocket, will develop one, he said.

“I regret that there was not more communication about this before it got to this point,” Richardson said Monday. “Maybe I should have given things more thought or checked into things more thoroughly. The situation could have been handled better.”

Board of Selectmen Chairman Mark Scally told the board Monday that he was pleased that Richardson agreed with his interpretation of Millinocket’s town charter, which he aired last week.

As amended in 2002, the charter states: “If there is a paper mill closing, the owner of the hydropower facilities shall pay an annual amount of $75,000 to the economic development body serving the Katahdin region as identified by” DECD to offset the impact of a shutdown.

The Millinocket mill, which is owned by Brookfield Asset Management of Toronto, shut down on Sept. 2. Hydro facilities owner Brookfield Renewable Resources paid the money the next month.

In two letters and an e-mail to Gov. John Baldacci and a Brookfield official, Millinocket Town Manager Eugene Conlogue sought the development designation without mentioning regional plans.

“This designation will allow the Town to receive $75,000.00 [from Brookfield] per the terms” of the charter, Conlogue wrote in a letter dated Sept. 25. “Governor, the Town needs your assistance in this matter and time is of essence.”

Richardson said he made it clear in subsequent conversations with Conlogue that the money must be used regionally. Richardson said DECD officials were surprised to learn that East Millinocket and Medway officials didn’t know of the designation when the check was cashed.

The charter, Richardson said, does not allow the towns to divide the money. Magic – an economic development agency that David Dickey, chairman of the Medway Board of Selectmen, said represents Medway now and represented the towns in 2002 – doesn’t fit the bill.

“The towns need an agency that they can all work with, and EMDC is a very good agency,” Richardson said.

Scally agreed that dividing the money evenly would be unfair to Millinocket, which for several years had spent more economic development money than the other towns.

“The important thing is to move on,” Scally said.

Dickey and Conlogue could not be reached for comment Monday.

Medway Administrative Assistant Kathy Lee was satisfied with Richardson’s decision, but hoped that Millinocket officials’ actions would not damage regional political relations. She hoped any plan would incorporate Woodville, Patten, Sherman and other areas hurt by the mill closing.

“I regret that this came up after the three towns had been working together so well on the schools and other issues,” Lee said. “The $75,000 is really not a lot of money, so to have something like this cause damage would be unfortunate.”

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