NewPage's Rumford, Maine, paper mill seeks US$1.5M abatement of last year's taxes in addition to prior reduction of US$1.1M; mill's valuation has fallen to US$130M from about US$300M in 2008, dropped about US$47M last year, says local assessor's agent

RUMFORD, Maine , April 30, 2014 () – The Rumford Board of Assessors will meet with NewPage Corp. officials Thursday to deliberate the paper mill's formal abatement request for $1.5 million off last year's taxes as presented to the board.

That's on top of the reduction by a little more then $1.1 million in taxes last year, Linnell Geronda, assessors's agent, said Wednesday morning.

Geronda said the mill doesn't usually ask for abatements, but the paper mill's valuation has consistently dropped from not quite $300 million in 2008 to $130 million today.

Last year's valuation dropped by approximately $47 million, she said. In its abatement request, she said the mill now wants its valuation to be $64 million less, which, if granted, would be $1.5 million in taxes.

Last year, there wasn't any tax relief for residents, because spending went down as did the mill's valuation, so it was a wash, Geronda said. Had the mill's valuation not been reduced, residents would have enjoyed a tax reduction.

Thursday's meeting is scheduled for 1 p.m. in the Municipal Building jury room. The Board of Assessors met last week with NewPage officials and recessed the meeting to Thursday to continue deliberations, Geronda said.

NewPage is currently in negotiations with Verso Paper Corp. Both announced in January that Verso plans to buy Ohio-based NewPage Holdings Inc. for $1.4 billion to create a stronger, more globally competitive coated-paper-based business to serve customers

NewPage has seven paper mills in the United States, including one in Rumford. The Tennessee-based Verso has four mills, including facilities in Jay and Bucksport.

At the time of the announcement, the deal was expected to close during the second half of this year, subject to regulatory approvals.

NewPage Corp. announced in Dec. 2012 that it had completed financial restructuring and emerged from Chapter 11 bankruptcy protection.

Then on Feb. 19, 2013, NewPage announced that it would be cutting all non-personnel discretionary operating costs by 5 percent and personnel by about 300 positions across all of its mills and corporate office in response to a decline in demand for the paper it manufactures. For the Rumford mill, that meant laying off 45 hourly positions and $2 million in cost elimination.

In March 2013, Rumford paper mill officials met with town officials to reduce the paper mill's taxes. They also asked the Board of Selectmen to reduce spending in the coming year and cut the town budget. At issue was the potential that NewPage would shut down its Rumford Paper Co. subsidiary.

In Nov. 2013, the Rumford mill announced that it would shut down the mill's No. 12 paper machine, which manufactures coated paper used in catalogs and magazines. A mill spokesman said "tough economic conditions" forced the indefinite shutdown of the paper machine. About 120 workers would be laid off, Local 900 President Ron Hemingway said at the time. The mill then employed 830 people.

NewPage is the leading producer of printing and specialty papers in North America with $3.5 billion in net sales for the year ended December 31, 2011. NewPage is headquartered in Miamisburg, Ohio, and owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota and Wisconsin. These mills have a total annual production capacity of approximately 3.5 million tons of paper.

Related Links

-- NewPage, Rumford businessmen urge Rumford board to lower paper company's taxes

-- NewPage shutting down paper machine, laying off workers

-- Verso to buy NewPage mills, property

-- NewPage emerges from bankruptcy


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