HOULTON – With reports of company closures, shutdowns and layoffs dominating the news, Houlton officials on Wednesday took steps to reverse that trend.

The Town Council, sitting in its capacity as the Shiretown Development Corp., unanimously approved a 10-point memorandum of understanding with Melton Sales and Service of Bordentown, N.J., that paves the way for the company to expand its operations to Houlton.

Melton could initially employ 25 people in the refurbishment and overhaul of heavy equipment for the U.S. Department of Defense. Employment could go to 40 or more within three years.

Wages for skilled employees, such as welders, mechanics, machinists, electricians and painters, would start at about $12.50 an hour.

“It sends a message to the world that we’re open for business; that we’re not a minimum-wage town,” Councilor Michael Carpenter said of the memorandum.

The memorandum is not binding, but it does give Melton the chance to begin some limited operations at the former Houlton International Corp. facility at the town’s industrial park.

HIC, which made hardwood furniture components, closed its doors last month after more than 40 years in Houlton. Foreign competition was blamed for the closure.

According to the memorandum, Melton would take over all buildings and leases now held by HIC. Melton would then transfer ownership of the property to the town, which would lease it back to Melton.

The company would lease the facility from the town for 10 years with a 10-year renewal and purchase option.

By the town’s holding the property, the town becomes eligible to seek grants and assistance from the state. Melton will become eligible for financial assistance, including municipal tax increment financing, employment tax increment financing and business equipment tax reimbursement.

The Shiretown Development Corp. would use $115,000 of its own money to finance some renovations to the former World War II hangar – which it owns and was leasing to HIC – and other buildings owned by HIC that will be purchased by Melton.

It also would provide another $50,000 grant to cover costs incurred by Melton to transport equipment to the Houlton site to begin operations.

The SDC also would secure a $500,000 interim bank loan to further finance renovations to the buildings to assist Melton in its startup, possibly as soon as March.

Ultimately, the town anticipates securing $2 million in loans and grants, some or all of which would be loaned to the SDC to replace the interim loan and further assist Melton in its expansion efforts in time for the company to bid in October on a major DOD contract.

Loans sought by the town would have to be approved by voters in a special election.

“We’re going to do everything with every agency we can find to reduce the debt load,” Town Manager Peggy Daigle said at Wednesday’s meeting. “We need to work quickly and diligently with Melton Sales and Service to keep this company in town.”

Melton, for its part, will be investing about $1 million for renovations and equipment to be used at the Houlton facility. The equipment would serve as collateral against any loans the town might secure.

John Melton, president and chief executive officer for Melton Sales and Service, attended Wednesday’s meeting. He said the proposed deal was a “win-win” situation: His company gets a facility it needs for expansion and the town gets a company that will occupy an otherwise empty facility and provide a $1 million annual payroll.

“We have teamed and partnered,” Melton, who lived in the town for 18 years, said Wednesday. “It’s a great opportunity for all folks.”