SKOWHEGAN – A $400,000 downtown revitalization grant is on hold following a freeze on the issuance of $40 million in voter-approved bonds by Gov. Paul LePage.

Skowhegan Town Manager John Doucette Jr. said the town has a signed contract with an engineering firm and already has spent $23,000 on project plans.

He said the Board of Selectmen last week had to stop awarding project bids because of the freeze.

“This particular grant that we got is under a state bond — Communities for Maine’s Future grant,” Doucette said Thursday. “It was approved by the voters in 2010. The governor put a hold on the bond money so the state is not spending money for it right now.”

The town of Skowhegan last year was awarded the grant to improve the municipal parking area with pedestrian walkways, lighting, trees, benches, granite curbs and directional signs.

The grant was awarded by the Maine Department of Economic and Community Development as part of 11 municipal grants statewide totaling $3.5 million. The money is to be matched with local money for downtown revitalization projects.

Skowhegan voters agreed to accept the grant during a special town meeting in February.

In a letter to municipalities that were waiting for the money, LePage said the state is already paying $100 million a year to finance debt payments from earlier bonds. Approving new borrowing would be “fiscally irresponsible,” he said.

LePage said that the earliest the bonds would be available is January 2014.

Jeffrey Hewett, Skowhegan’s economic and community development director, said the $400,000 already invested at the Somerset Grist Mill will count as the town’s matching money.

Doucette said Dirigo Engineering of Fairfield already has been paid for some of the planning and design for the project and the town was hoping to take delivery of the bond money for reimbursement.

“The good part is that the towns that are involved in this have gotten the governor to take another look at it — at least he’s rethinking it and that’s a positive thing,” Doucette said.

“We’ve got a project that is all ready to go out for bid at a time when oil prices are down. A lot of this is pavement and the price of this project is going to go up over the years,” he said.

Calls to the governor’s office and to the Maine Department of Economic and Community Development were not returned.

Morning Sentinel Staff Writer Doug Harlow can be reached at 612-2367 or at:

[email protected]