SKOWHEGAN — Work on the redevelopment of a former mill in Skowhegan is halting this week, leaving its owners urgently seeking a combination of public funding sources and tax relief from the town to address millions in damages caused by December’s historic storm.

Flood damage has put High Tide Capital LLC, the Bangor-based developer that has been rehabbing the downtown Skowhegan mill into a mixed-use development, in a multi-million-dollar pinch.

“The lights will be off and there will be no workers on site” starting Monday, said Dash Davidson, a principal in the company.

To get the project back on track, Davidson and his partners have been making urgent appeals for a mixture of publicly funded loans and relief packages. But officials still need to be convinced to approve those loans, and that process may not move fast enough to meet the project’s urgent need.

Plans for the 80,000-square-foot building, which previously was the home of Solon Manufacturing and Maine Spinning Co., include commercial and restaurant space, a hotel and mix of workforce and higher end housing. The project promises to add housing stock, drive tourism and create about 15 jobs, developers have said.

Part of the building was set to open early this year, but flooding after the storm caused an estimated $3.5-$4 million in damage, according to Davidson. The project’s insurance policy will eventually pay out about $2.5 million of that amount once the claim process is complete, Davidson said.

That simple arithmetic problem leaves him and his partners looking for at least $1 million — and fast. That’s because the bank financing the project will not advance any more money on its approximately $15 million loan until the project is restored to the state it was in before the flood, according to Davidson.

No private lender would give a loan in this situation, Davidson said, which is why his company is eyeing public sources of funding to bridge the gap.

“It’s on us now to figure out how to piece the project back together,” he said.

State aid is not likely to come any time soon, as Gov. Janet Mills awaits the approval of federal funds to flow into Maine. But loans from Somerset County, the town of Skowhegan and other public sources could come together sooner.

Mills toured the damaged mill property in the days following the storm flooding, drawing more attention to the catastrophic losses of riverside property owners.

The Somerset Economic Development Corp., a county agency that operates somewhat independently, is currently fast-tracking a loan package of around $69,000 for the project through a state-matched program, according to Executive Director Christian Savage.

“We’re trying for a quick turnaround,” Savage said.

Savage and Davidson also proposed to county commissioners this week that the county could become a partner on the economic development agency’s loan. That would be a unique move, but not unheard of, Savage said: The county partnered with the economic development agency on a loan for TimberHP, a manufacturer that opened last year in Madison.

It was not immediately clear how county commissioners would move forward, as this week’s meeting was largely informational for commissioners to ask questions. Only one commissioner, chairman Robert Sezak, said outright at the meeting that he would be supportive of a county loan, assuming the interest rate was high enough.

Commissioners could vote on the county portion of the loan as early as their next meeting the first week of February, according to Savage.

At the town level, the Skowhegan Economic Development Corp. also is working on a loan, but Jeff Hewett, the town’s director of economic and community development, said he can’t accelerate the process to the pace that the county corporation is moving at.

“I’ve got to treat everyone the same,” Hewett said.

A town loan would eventually come to the Board of Selectmen for approval, which Hewett said could happen in late February.

Ultimately, Davidson said the key to getting loans from the county, town and other agencies will be entering a tax agreement with the town.

An agreement that would limit the higher taxes incurred on the property once the development is complete for a determined period of time would allow Davidson’s company to show lenders that they will have sufficient cash flow to service the debt, he said. In any agreement, future taxes owed to the town would not drop below the current amount of about $8,000 per year, according to Davidson.

“The one thing that town does have the power to do is offer us relief in the future on our new, higher taxes based on our investment in the building,” Davidson said.

But selectmen have not considered the issue at a meeting yet, and there is no agenda item on the topic listed for the board’s next meeting on Tuesday.

If selectmen do approve an agreement, the package would then be sent to town meeting for approval. That could either be at a special meeting called by selectmen or the annual meeting in June.

“It’s all up to the selectmen at this point,” Davidson said. “This is the last piece of the puzzle. We’re hoping that the town and the selectmen can really step up and be the hero here and save the day for this project.”

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