Plans to put a wood pellet plant in Millinocket have been dealt a serious blow.
Last October, the board of directors at the Finance Authority of Maine approved a $25 million loan to help Thermogen industries to get the $140 million facility off the ground.
But today, the board voted 8-5 in favor of dropping that amount to $16 million. Later in the afternoon, FAME released a statement regarding their decision:
“In considering an application under the Major Business Expansion Bond Program, the Board is required under the governing statute to find that the applicant is creditworthy and that there is a “strong likelihood” that the securities will be repaid through the revenues of the project and any other sources of revenues and collateral pledged to the repayment of the bond securities.
Among the conditions imposed as part of the approval by the FAME Board are the requirements that any outstanding property taxes owed to the towns of Millinocket and East Millinocket be paid, and that any other liens against collateral for the bond be satisfied.”
The reduction in the bond amount now puts the project in jeopardy. Alexandra Ritchie, a spokesperson for Cate Street Capital, the investment firm behind the project, says they’re disappointed in the board’s decision, but stopped short of saying whether today’s decision killed the project.
“We need to regroup internally and as an organization and really identify what this means to the transaction and it’s ability to move forward. And regroup from there,” Ritchie said.
Millinocket residents who were counting on the new plant were devastated by the decision.
“This will, it will bankrupt the towns,” said Stu Kallgren, President of the Local 37 Steelworkers union. “Right off the bat. And there’s no need for it. We’re talking about $9 million here which is nothing. In the big scheme of things it’s nothing. It’s just a guarantee. They’re not giving us $9 million we’re gonna pay that back. We’re gonna make that money back.”
According to Thermogen, the new wood pellet plant would have employed nearly 60 people and produced roughly 300,000 tons of pellets annually.