MILLINOCKET – The town has a solid infrastructure – except for generally awful cellular telephone coverage – is surrounded by a wealth of tourist-friendly natural resources, is carrying a $3 million fund balance and has $53,000 cash on hand that it can loan to town businesses.

An older but skilled work force is among Millinocket’s 5,200 residents. Its school system is considered excellent, it has a large hospital, for a rural area, and an expanding social services network.

An electric utility is growing and looking to grow within its borders. A large paper mill and several other small businesses are in town or nearby.

So why is it, then, that a town that once had the highest average per-capita income average in the state now has an unemployment rate twice the state average, and half its population living at or below the poverty line?

And what can the Town Council do about it?

Councilors started working their way toward answers to those questions, and the vast problems they represent, during a workshop on Tuesday night. Council Chairman David Nelson directed councilors to start working on a one-, three- and five-year plan to return the town to better economic ground.

He said he hoped the workshop would help heal a town divided by internal conflict over its poverty.

“We have assessed that economic development is important,” Nelson said after the meeting. “By the time we have a new budget, we will have a plan for the town’s economic development. You can count on it.”

What probably won’t happen by July 1 is town funding for the Millinocket Area Growth and Investment Council, a nonprofit, quasi-public agency aimed at assisting fledgling entrepreneurial efforts and improving the economic climate of East Millinocket, Medway and Millinocket.

The swing vote in council funding for MAGIC – the lightning rod for much of the bitter fighting over the town’s economics – is Councilor Scott Gonya, who indicated very strongly that he doesn’t want MAGIC to get another $30,000 from the town during fiscal year 2007-08.

“I want the fighting to end. I have had it,” Gonya said. “The town is split.”

Gonya and Councilors Jimmy Busque and David Cyr want to see the town hire its own economic development director, answerable to the council and Town Manager Eugene Conlogue. With Councilor Bruce McLean, MAGIC’s executive director, forced to recuse himself on MAGIC votes, MAGIC supporters Wallace Paul, Nelson and Matthew Polstein face a deadlock on the issue.

“I would like contractual services used for an economic development director so I have some control over this,” Gonya said.

Over MAGIC, he said, “There is none whatsoever, and I am embarrassed and I am upset by this.”

A small group of environmental conspiracy theorists have alleged MAGIC is conspiring to depopulate the region and turn it into a tourist haven while seeding East Millinocket and Medway with manufacturing businesses – a charge that pro-MAGIC residents, and several businesses, say is preposterous.

Others have expressed concerns that MAGIC was too much under the sway of Councilor Matthew Polstein, one of MAGIC’s founders who is proposing a $65 million ecotourism resort just outside town lines. Others have said they simply believe that MAGIC has failed to return enough to Millinocket for the money the town has allocated and that killing MAGIC’s funding is in line with an Election Day referendum vote of 1,153 to 1,014.

Polstein called the allegations “a house of cards.”

“Those things are fallacies, but I don’t know how to get over them,” said Polstein, who has described himself as a victim of a smear campaign. He said he has thought about offering to meet with opponents but didn’t want to be “beheaded” by them.

Gail Fanjoy, who quit the council because of the controversy in late 2005, held the seat McLean occupies. She called on the council to get serious about funding development and to continue its regional approach. True development, she said, would cost the town at least $150,000 annually, which drew gasps from some of the 40 people attending the meeting.

Funding MAGIC at $30,000 annually is “like sending Bruce into a burning house with a garden hose and a trickle of water,” she said. “Some have the audacity to not like the result of that.”

She and several other spectators said that MAGIC has been very helpful to fledgling business owners, providing them with business expertise and links to several funding sources.

McLean said after the meeting that MAGIC likely will keep going. He hinted that the town’s economy, by virtue of two possible deals with $50 million to $70 million manufacturing firms, soon might see some real growth.

That claim drew rueful smiles from Kathy Gagnon and Rose Weymouth, who are forming a citizens committee for economic development. MAGIC has made many claims like that before that haven’t produced jobs, Gagnon and Weymouth said.

“That’s the way economic development is,” McLean said. “Sometimes deals fall through, sometimes at the last minute.”

“Tonight was a good start,” Gagnon said. “Hopefully, we can get beyond the fighting. That’s what we all want.”