Town of Millinocket, Maine, files lien against Great Northern Paper for US$12,585 in unpaid real estate taxes, which must be paid in 18 months or town can foreclose, says local tax collector; company also owes town US$1.18M in net personal property taxes

Debra Garcia

MILLINOCKET, Maine , July 7, 2014 (Bangor Daily News) – With $12,585 in unpaid real estate taxes overdue, Great Northern Paper Co. LLC is among property owners that the town has pressed 304 real estate tax liens against, officials said Monday.

The 304 liens were filed July 3, said Tax Collector Lorene Cyr, who did not have a list of the liens available or the total amount in delinquent taxes they represent.

The liens must be paid within 18 months or the town can foreclose on the properties, Cyr said.

"It is quite a lot. Usually it is in the 200 range," Cyr said Monday of the number of liens the town has sought annually over the last several years.

The town seeks real estate liens on nine GNP-owned buildings and lots, according to the documents released Monday by the Penobscot County Registry of Deeds. The properties are just outside the tax increment financing district on the company's Katahdin Avenue industrial park, Route 11, Aroostook, East and Eastland avenues, Prospect and Congress streets. Two lots are on Medway Road, the documents state.

The taxes owed for individual liens range from $26.96 to $6,900 in principal. The $12,585 includes principal, interest and mailing costs, the documents state.

Real estate taxes cover the value of land, housing, garages and other nonmovable items. Personal property includes items that are movable, like vehicles, livestock, furniture and business and office equipment.

The real estate taxes Great Northern owes are small change compared to GNP's overdue personal property taxes. As of Thursday, GNP owed Millinocket $2.17 million in gross overdue property taxes, $103,661 in interest and $10 in fees on the papermaking equipment at the company's industrial park.

The town received a personal property-tax payment of $225,000 from Great Northern on Thursday, the same day the Town Council voted 5-2 to accept a payment plan to receive Great Northern's $2.17 million in overdue property taxes in installments this month.

Besides the $225,000, the plan calls for a $340,000 payment on July 8, a $360,000 payment on July 14 and the remainder of the $1.18 million on July 21, officials have said.

Councilors blasted GNP -- the town's largest single taxpayer -- and GNP auctioneer Koster Industries for failing to comply with agreements to pay the total $2.17 million tax bill by June 17. That's when Koster auctioned GNP property to raise funds to resolve GNP's tax bills with the Internal Revenue Service and Millinocket's lien filed on May 27.

The council voted 7-0 on June 30 to amend the payment agreement to eliminate a step in the payment process required by a tax increment financing agreement that would effectively speed up the payment process.

The TIF agreement requires Millinocket to return half of the $2.17 million property tax, or $1.08 million, to GNP annually. With the June 30 vote, the town will simply accept the $1.18 million and forgo the payback.

Town Manager Peggy Daigle warned residents during Thursday's meeting against thinking that the TIF agreement meant that the town was getting shortchanged. The TIF agreement has been in place on the Katahdin Avenue property for many years. The town is getting all the taxes it is owed, Daigle said, plus $467 per day in interest on the debt.

Councilors said that they had a "step-back strategy" for dealing with GNP should the company falter on its payment schedule.

"If this agreement goes by the wayside, we have talked with the lawyers, and we know what we have for a step-back strategy for this. Do we want to prolong this? No," Councilor Michael Madore said Thursday. "If we can get $225,000 in the coffers today with a schedule of payments so we can move on, then that is what we are hoping for."

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