MADISON — Town and economic development officials are actively courting Poland Spring in a bid to bring economic life back to the shuttered Madison Paper mill property, an early sign that there could be new prospects for jobs and investment there.
However, securing a tenant for the former Madison Paper Co. plant is unlikely to happen until the mill’s former hydroelectric power station is sold.
UPM-Kymmene Inc. and Northern SC Paper Corp. sold the Madison mill on Jan. 3 for an undisclosed price in a deal that included the real estate of the main paper mill site as well as all the mill equipment. The mill’s hydropower assets are being marketed separately from the mill transaction. There are bidders for the hydroelectric assets at two dams, officials say.
Poland Spring is seeking a new site in western Maine for a $50 million water bottling plant and access to at least two additional springs that would boost the company’s production capacity by nearly 45 percent, the Portland Press Herald reported last month.
Poland Spring has not bid on the hydropower assets, but Madison area officials are pitching the idea to them.
“I guess it’s no secret that we’ve been trying to respond to the Poland Spring article that they had in the paper that they were looking for another place,” said Madison Town Manager Tim Curtis. “We have spots along the river here that have pretty strong aquifers in them. We’d like to see if Poland Spring would be interested in doing some testing here to see if they can find a water source that works for them.”
Poland Spring, part of Switzerland-based Nestle S.A., already operates three Maine bottling plants, in Poland, Kingfield and Hollis. The planned new water sources and bottling operation would increase the company’s production capacity from about 900 million gallons last year to 1.3 billion gallons.
They also would create up to 80 new jobs in rural Maine, where mill closures, such as Madison’s last year, have left former employees scrambling for new jobs, retirement or training in new skills.
Heather Johnson, executive director at the Somerset Economic Development Corp., which is working with former mill owners and the town, said Monday it is too early to count the Madison mill site as a candidate for a Poland Spring option.
“They are looking for springs, and we requested that they consider our area in their consideration set,” Johnson said. “They have a significant number of people making that same request, so it’s still in a data-gathering stage. We haven’t even sent them sites to review yet.”
WAIT FOR HYDRO PLANT TO SELL
Gregory Schain at New Mill Capital Holdings in New York City, whose company purchased the Madison mill in a joint venture with other entities, is confident that they will find a business to move into the former paper-making facility, but that work hinges on the sale of the hydro plant.
“I actually have several businesses that have expressed serious interest in operating at the site, but sourcing power is key, and everyone is in a holding pattern until the hydro sells,” Schain said. “The most obvious sources of power are the hydro or putting in a power generating station using the existing gas line that was installed in 2014.
“Until the hydro sells and people can explore the cost of that option, we are at a standstill as it relates to reusing the real estate. Hopefully, UPM makes a decision soon so we can move forward, and hopefully whoever buys the hydro prioritizes local job creation.”
As Madison officials look to court Poland Spring for the hydropower and mill sites, the water company is staying silent on whether the Somerset County location is being considered.
Heather Printup, community relations manager for Poland Spring Bottling, issued a statement Monday that said as consumer demand for Poland Spring water continues to grow, “we are actively exploring our options to sustainably meet that demand through expansion and increased investment in Maine.”
That expansion, she said, includes identifying additional spring sources and potentially a new bottling facility at a location yet to be determined. The focus, Printup said, is primarily in western Maine and more recently in the Penobscot River Valley.
In Madison, Curtis, the town manager, said if Poland Spring can find a water source that works for the company, Madison and Somerset County officials could work with it to determine if the industrial site could host a bottling plant.
He said there is a top bidder for the hydropower properties, but so far no one has disclosed who that is and the information may not be available until April or May. Curtis said the top bidder would buy the hydropower assets in Madison and in Anson along with water rights along the Kennebec River.
There are two hydroelectric dams and power plants at the former Madison Paper site. The dam at the upper mill is referred to as the Anson Dam. That power plant is in Anson and is assessed at about $20 million. Down the river at the lower mill is the Abnaki Dam, which is housed in Madison and valued at about $37 million, Curtis said. The Anson hydro facility generates 8 megawatts of power at peak and the Abnaki Dam about 18-20 megawatts, he said.
SOME LAID-OFF WORKERS REBOUND
Meanwhile, the Kennebec Somerset Transition Team at Kennebec Valley Community Action Program reports that 63 percent of the 200-plus workers who lost their jobs when the mill closed in May have retired or are in other jobs or in training programs.
Curtis said the transition team led by Dana Hamilton has held several meetings over the past year at the mill with state and federal representatives talking about job fairs, computer skills, mock interviews and resume training.
“A lot of the initial push was to get guys ready that hadn’t interviewed for a job in 25 years,” Curtis said of the laid-off workforce at the mill. The average age of the workers was about 50 and most of the younger, entry-level employees found work at Poland Springs, the Sappi paper mill in Skowhegan and Huhtamaki packaging in Waterville.
According to the minutes of a recent transition team meeting, 18 former employees have taken retirement with a pension paid by former mill owners UPM-Kymmene Inc. Curtis said the recent announcement by Sappi that the company is retooling one of its paper machines is good news for former Madison workers.
Doug Harlow can be contacted at 612-2367 or at:
dharlow@centralmaine.com
Twitter:@Doug_Harlow
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