MADISON — Investments in the town’s old mill were a focal point of discussions this week as officials looking to repurpose the structure prepare to close on an $85 million bond.
Town Manager Tim Curtis at a meeting Monday reviewed loans and grants that the town has received on behalf of GO Lab.
GO Lab Inc. is a Belfast-based building products manufacturer. The business closed on the former Madison Paper Industries mill in 2019 in a $1.9 million deal.
When it’s up and running, GO Lab will make three types of wood fiber insulation, which has been on the market in Europe for more than 20 years.
Madison Paper Industries closed in May 2016. The loss of the mill was a blow to the town’s tax base and officials spent years battling in court over the valuation of the former paper mill. In July, Maine’s highest court sided with the town over Madison Paper, which had argued that it was due a tax refund because the mill was assessed at more than it was worth.
Financial agreements between the town of Madison and GO Lab include a $400,000 loan and three grants totaling $1.65 million.
The $400,000 was acquired in 2019 when the town received $300,000 in funding to loan to GO Lab for engineering costs. The town then kicked in the additional $100,000.
Money was loaned in August 2019 with no payments for two years, then interest only until 2026, when a final balloon payment is due. Selectmen OK’d a request on Monday by GO Lab to push the balloon payment to 2028, with interest payments to begin at that time and a principal payment to begin in 2024.
In exchange, the town has received all engineering documents created since 2019 on the land. In the event that GO Lab does not succeed in Madison, the town will have engineering reviews for future developments.
In all cases, the property is owned by the town but leased to GO Lab. The terms have not been decided but payments will be “structured to capture costs such as legal and insurance fees and personal property taxes,” Curtis said.
Jay Field, director of content and communications for GO-Lab, said Tuesday that officials are “in the final stages of closing” on an $85 million bond and have hired a contractor to work on construction.
“We’ve raised all of the equity as part of that package to have the bond go to closing,” Field said. “It’s very exciting, the work is going to begin sometime later this fall.”
The town manager said that around 45 jobs are expected to be created this fall at the mill. When fully operational, 120 jobs will be created. When Madison Paper announced in 2016 that it was closing, 214 people were out of a job.
The entire project cost is $110 million.
In other business Monday, Curtis provided the board with updates on how the town is looking at allocating the money received from the American Rescue Plan Act.
Officials in Madison are planning for $487,945 over two years. When the town’s application is complete, they anticipate receiving the first half of the funds, $243,972.50. Curtis recommended allocating the money for bonus payments to town employees, a matching grant program for small businesses, road reconstruction and other projects.
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