Finance Authority of Maine Awards $12 Million in Tax Credits to ND Paper's Old Town Mill
In October 2018, OTM Holdings sold the Old Town mill to ND Paper, a wholly-owned subsidiary of Nine Dragons Paper (Holdings) Limited. ND Paper expects to restart in the first quarter of 2019 and ultimately produce 275,000 admt per year of unbleached kraft pulp.
Dec. 20, 2018 - At its December 13, 2018 board meeting, the members of the Finance Authority of Maine (FAME) approved financing for three separate projects that collectively are expected to help create and retain at least 700 Maine jobs. The projects range from renewable energy at Brunswick Landing to public infrastructure improvements in Westbrook to the re-start of the shuttered Old Town mill.
Approval of the deal for the Old Town mill concerns financing through the Maine New Markets Capital Investment Program for approximately $31.8 million in investments at the Old Town mill in the company formed to hold the facility, ND OTM, LLC. In connection with the investments, a total of approximately $12 million in tax credits will be awarded over the next seven years.
The FAME Board certified applications for investments in the following six community development entities: Stonehenge Community Development 124, LLC; CCG Sub-CDE 44, LLC; Enhanced Capital New Market Development Fund 58, LLC; Community Development Funding XXII, LLC; UA Sub-CDE XXV, LLC; and CIF XIV, LLC.
The companies will use the proceeds of the investments for various capital improvements, investments in working capital, construction, equipment procurement, and other related improvements in order to re-start and optimize a pulp manufacturing facility at the site of the currently shuttered Old Town mill. This is expected to create or retain approximately 130 direct and 635 indirect and induced jobs related to the site.
The Old Town mill site has been idle for approximately three and one-half years. In October 2018, OTM Holdings sold the mill to ND Paper, a wholly-owned subsidiary of Nine Dragons Paper (Holdings) Limited. ND Paper operates three pulp and paper mills in North America with combined annual production capacity exceeding 1.1 million metric tons, including the fully-integrated pulp and paper Rumford Division in Oxford County, Maine.
FAME has administered the Maine New Markets Capital Investment Program since the Legislature created it in 2011. It does so in cooperation with Maine Revenue Services. The program is designed to attract investment in economically distressed areas of the state. It allows eligible investors to claim tax credits against state taxes in amounts up to 39 percent of a project's total cost. The maximum aggregate amount of tax credit authority is set forth at $250 million, of which after today approximately $11 million remains.
“We are grateful for FAME's assistance with our plans for the Old Town mill,” stated Brian Boland, Vice President of Government Affairs and Corporate Initiatives at ND Paper. “The financing will help us expeditiously re-start this idled facility that will ultimately supply pulp to a global base of customers. Even more importantly, an operating Old Town mill will once again provide, directly and indirectly, literally hundreds of well-paying jobs for hard-working Mainers.”
FAME is a quasi-independent state agency that provides financial solutions that help Maine people achieve their business and higher education goals. FAME is celebrating its 35th Anniversary and helps to create a Maine workforce that with good-paying jobs by focusing on the nexus of economic and educational development. FAME recently was recognized for the fourth year in a row as one of the Best Places to Work in Maine. To learn more about FAME, please visit www.famemaine.com
SOURCE: Finance Authority of Maine (FAME)