NY Times story on Millinocket

[Mohamed Ellozy]

A Paper Mill Goes Quiet, and the Community It Built Gropes for a Way Forward:

MILLINOCKET, Me. — Pass a playground and follow a dusty road, and there, on the other side of a chain-link fence, is the wreckage of the paper mill that was born before this town was.

One recent afternoon, backhoes picked through the rubble of a vast room that once held 10 paper machines, while a handful of townspeople, some smoking in their idling cars, watched.

It is something to do here, witnessing the disintegration of the Great Northern Paper mill, which conjured this town out of the backwoods and sustained it for a century. Once among the biggest mills of its kind, it pulled power from the river and made pulp from spruce, filling wallets and pantries for thousands of families and supporting a bustling main street. People called Millinocket the Magic City.

The mill stopped running in 2008, a turn of events that had once been unthinkable. Since the closing, the town has been unable to find a strategy that could provide an economic engine on anything near the scale the mill did. Its last paper machine was auctioned off in June, snuffing out any wistful hope of a restart.

 

[hiking lady]

I guess they should try Berlin ' strategy, a massive landfill that takes everyone's garbage, a humongous atv park, throw in some snowmobiles a motel or campground, biomass plant, hydrostation, 2 prisons and they'll be fine.

 

[dug]

Wow, tough shot at Berlin....

If you have a grander plan, by all means, let them know. They are trying everything to bring the city back to what it was. Pretty tough to see the area and their struggle to survive, and I see if first hand.

 

[peakbagger]

I actually had done up a longer reply on Berlin but I will limit it somewhat.

Berlin and Millinocket were both the biggest pulp and paper mills in the world at one point. Berlin was at its peak in early century while Millinocket hummed along until the sixties and even into the seventies. Both cities were built around an industry that was there for 100 plus years and its going to take many years for the localities to deal with the loss of the industry that built them. Ultimately both need to get smaller as it highly unlikely that an industry of that size is ever going to be in those towns again.

The berlin landfill was built long before the pulp mill shut down. The local towns all had problematical dumps that needed closing and the mill owner allowed them to dump there at cost but the vast majority was mill waste. This helped out the entire area, as the old dumps got closed and replaced with a state of the art landfill. The towns ended up buying the landfill and still run them as a non profit, the imported municipal waste replaces the mill waste and reduces the cost to the owner towns. Considering the alternative is to ship it at a much higher cost to a problematical landfill in Bethlehem owned by a out of state corporation, I think its not a bad decision.

The ATV park is a logical extension of the winter snowmachine business. Not my cup of tea but it allows seasonal businesses to run 9 to 10 months a year compared to 3 or 4 months of winter. Several local businesses have expanded. It also supports the long term tourist businesses. I have known folks who have to work 4 or 5 jobs seasonal jobs a year to survive. If they can cut down to 1 or 2 jobs nearby (instead of having to drive to Conway to work barely above minimum wage), they regard that as a major improvement in their lives.

The prisons employs a lot of folks and the federal governments home repurchase program tends to encourage home owners to improve their properties for resale to so they qualify for the program. They also funneled close to 2 million dollars in impact money to Berlin which was targeted at blighted housing. Its not obvious to occasional visitors but many structures have been torn down and turned into green space. The federal and state prison also puts more folks with health insurance into the economy which helps out the local medical providers keep critical services in place and subsidize those without insurance or those on medicare (which the hospital effectively needs to subsidize).

There has also been a lot of money funneled into major rehabs of apartments. The city has made significant investments in water and sewer infrastructure in the last few years and the RT 110 upgrade and planned work on the upper end of the east side bypass will improve traffic flow through town and clean up some neighborhoods that were blighted as the owners didn't dare invest in their properties until the road alignments were determined.

The biomass plant is a positive but unknown impact to the economy as it has only recently has gone commercial. There is significant truck traffic coming into town using local services and I see a fair share of new trucks and trailers driving out on the road. Milan Lumber and White Mountain lumber now have a local place to get rid of sawmill wastes and landowners now have a local market for low grade wood which means they have a higher incentive to do management cuts. Granted its a low employee count but is far more attractive than an abandoned mill and a brownfield site sitting abandoned.

Overall, compared to Millinocket, Berlin is somewhat closer to working its way through it. Still a long way to go with some major issues still waiting to be dealt with but at least they are moving.

 

[hiking lady]

I wasn't saying it as a negative, but I will add that a lot of the prison workers bought housing outside of berlin, that the downtown businesses continue to struggle,
given that there are empty blocks, and burned out buildings. It appears that Gorham is probably benefiting more from the atv park and most people I know who live in Berlin either move there to retire or work out of town or are on disability. I think unfortunately Millinocket will have a more difficult time due to it being so far north, maybe they can do what the balsams plans on doing.

 

[peakbagger]

Some follow up

http://bangordailynews.com/2014/08/...ing-notices-to-east-millinocket-mill-workers/

 

[RoySwkr]

One problem with Berlin is tax base. The remaining mill and much of the commercial strip N of US-2 are actually in Gorham, and the prisons are tax-exempt as is ATV park, don't know about municipal landfill.

 

[peakbagger]

The landfill is in Success, its owned by the local governments so I am not sure if it would be taxed.

 

[peakbagger]

To close out this thread

http://online.wsj.com/articles/shuttered-great-northern-paper-to-liquidate-in-bankruptcy-1411504197

 

[hiking lady]

That sounds eerily familiar to the lower cascade mill in berlin that is trying to make a go of it but is open infrequently it appears due to lack of work. Sad for the people in Millinocket given how far north it is. They would likely have to retrain or move I would guess.

 

[Stan]

Even with the raw material and good labor close at hand it is difficult, if not impossible, to compete with the cheap labor and loose environmental standards of China and developing countries. This has been the historical cycle in most New England "mill towns" and the recovery may take a very long time as that cycle evolves. Success seems to occur where there is some unique local asset or resource combined with visionary homegrown leadership. I don't doubt those latent conditions exist in Millinocket, hard to identify that asset specifically but easy to imagine that it has something to do with the resource that surrounds it. One thing for certain, it'll take support, not interference, from us flatlanders to help move that cycle along.

I'm optimistic about Millinocket and if my planning horizon weren't so short I'd invest there. If your social conscience has a problem with that, consider buying a house (some are cheaper than new cars) and renting it out at a very affordable rent. I'd bet there are some good cuts of venison and a few bear steaks in the deal ... sooth the savage beast and sleep well!

 

[peakbagger]

Blame the decline in newpapers for GNP's decline. The east plant was optimized to make groundwood newsprint, it was far less expensive than kraft paper yet was adequate for a newspaper. In the 80s they spent a very large amount of money building a recycling facility to reduce the amount of virgin fiber used but the economics of bringing bales of waste paper from Southern Maine and the rest of New England didn't make sense as less than half of the weight in the truck could be recycled. When the plant was at its peak, they would sign an agreement with one newspaper and the entire output of a machine would go to one purchaser 24 hours a day/365 days per year. With the decline in newspapers, the entire demand for low grade newsprint has shrunk. Many of the remaining newpapers have switched to coated groundwood paper which is whiter and had better color resolution. The Millinocket mill 10 miles away has a world class machine capable of making this higher grade paper, but in epic prior management blunder, the machine was put in the wrong mill and the owner who made that decision ran out of money before they could rectify the situation. Even if they had put it in the right plant, even the remaining coated mills are having it rough as the magazine market has also shrunk.

About the only papermarket that is steady or possibly growing in the region is away from home tissue which is used for paper napkins at restaurants and toilet paper used in commercial establishments. There was a new tissue machine installed in Gorham NH last year and two more are being built in eastern Maine at the Woodland Mill. Even in that market, many firms are chasing it and overbuilding hoping that it buys them a few years which will lead to inevitable oversupply and subsequent shake out of high cost producers.

The next big news is an expected consolidation of the New Page and Verso holdings in Maine once Verso completes the buyout of New Page. There is speculation that of the three mills in Maine, there will be machine closures.

The future for the working Maine woods is for a biofuel and bio chemicals. The US government had identified the northern tier of the US as a prime supplier of renewable fuels and feedstocks and if carbon legislation is passed, its going to be one of the "easy ways" to displace some percentage of fossil fuels. Cate Street the owner of the GNP holdings is still actively pursuing torrefied wood production in Millinocket and other firms are also trying to come up with a business plan that works. Unfortunately most of the concepts do not require anywhere near the workers that the paper industry needed. Despite that, the jobs that will exist tend to be year round and pay higher and more consistent than the tourist based businesses that are highly touted. Realistically the two industries can coexist as evidences by the extensive acreage in the maine woods protected from development that remain in sustainable agriculture.

 

[Lost Dad]

An interesting sidebar to this discussion, from today's Bangor Daily News
http://bangordailynews.com/2014/09/25/business/millinocket-leaders-agree-to-accept-virginia-firms-offer-to-help-the-town/

Interesting that some residents would reject the offer of free support by professionals who have worked with other cities that have re-invented themselves.

 

[peakbagger]

I expect past history with "people from away" has left them very suspicious of "free" offers. The decline has been going on for years and every time there is a crisis there is someone who pops up with a something for nothing deal that inevitable costs the town. Many of the past offers and attempts were from people who talked a good game but really were just out to make a quick buck.

 

[Billy]

...Sad for the people in Millinocket given how far north it is. They would likely have to retrain or move I would guess.

In Acadia a few years ago, I spoke briefly with a guy who grew up and lived most of his life in Millinocket and had recently moved to the Bar Harbor area.
I mentioned it must've been awesome growing up next door to Baxter State Park.
He replied, "Have you ever heard the phrase 'Familiarity breeds contempt'...well so does endless unemployment."