Maine’s Mill Towns Search for New Life

Jon Kamp/The Wall Street Journal

MILLINOCKET, Maine—The commercial street in the heart of this small town has a new ice cream shop. A local nonprofit plans to revamp a dilapidated building into a co-working space, and a graphic-design company bought an office.

These are welcome signs of life in this isolated, central Maine town, which is still suffering from the closure of a paper mill a decade ago. The mill dominated the local economy for more than a century, once employing thousands and covering most town bills. It has proven hard to replace.

“We were a one-horse town, the mill was everything,” said Mike Madore, a retired special-needs educator who serves on the town council. “We need to do something, and we need to do it now.”

Five other Maine paper mills also closed in the past decade, upending small towns where the nation’s long-running economic recovery remains elusive. While Maine boasts a low 3.2% unemployment rate as of August—below the national rate—such figures don’t reflect some communities’ still-healing wounds from recent manufacturing losses, economists said.

The mill, which once employed thousands and covered most town bills, has proven hard to replace.

Jon Kamp/The Wall Street Journal

Some towns that lost mills are seeking smaller economic wins, wary of being too reliant on single industries. This should make their economies more sustainable, but “it’s a long path to get to that,” said Amanda Rector, Maine’s state economist.

Stretching back more than a century, riverside mills turned Maine’s trees into everything from newsprint and phone directories to, in East Millinocket, pages for the “Fifty Shades of Grey” erotic novels. But the industry, hurt by declining demand, has been shedding jobs for decades, and just six paper mills are still operating in the state today.

Bucksport, Maine, has scored some successes while trying to rebound from a 2014 mill closure. Among them, Portland-based startup Whole Oceans is planning to build a land-based salmon farm as early as next year, pending regulatory approval. Employment will be modest at first—at least 25 full-time workers on-site, far less than the mill’s 500 when it closed—but the fish farm will become Bucksport’s largest taxpayer, at an estimated $1.2 million a year.

The town planned ahead for years before the mill closed, setting aside $8 million, roughly a year’s worth of property-tax revenue for Bucksport, town manager Sue Lessard said. Geography also helps: Bucksport is near Bangor, the region’s commercial center, and has a picturesque harbor.

Bucksport also lost its mill in recent years, but has had more success in rebounding economically.

Jon Kamp/The Wall Street Journal

To the north, Lincoln—once derided as “Stinkin’ Lincoln” due to its mill’s exhaust—is trying to diversify its economy and rebrand itself as a recreation destination after the town’s mill closed about three years ago.

Goals include trying to turn a new drinking-water extraction site into a bottling operation. Economic development director Jay Hardy said he is upbeat about possibilities there, including talks with an unnamed, existing business about expanding in town.

“I want to have 10 businesses that hire 50 people, rather than one business that hires 500,” Mr. Hardy said.

Last week, a coalition including local communities and the forestry industry issued a report highlighting goals to significantly boost the value of Maine’s forests, which could aid towns beset by closures

Millinocket took a hard hit when it lost its mill, a metronome that set the pace of life for generations. When Eldon Doody moved there in 1974 for a job with former mill owner Great Northern Paper, it was hard to find parking on the main street, Penobscot Avenue.

“The street was so vibrant with clothing stores and shops,” said the 69-year-old, who served as company president in the early 2000s. Today, that street remains much sleepier.

Millinocket’s population sunk to about 4,400 people in 2016 Census estimates, down 16% since 2000. Residents who remained are paying higher taxes to help offset losing the mill, which covered more than half the tax base before it closed. The town payroll remains deflated, with sharp cuts to the police and public-works departments.

“Nothing prepared me for the level of distress this community had,” said Peggy Daigle, town manager from 2013 to 2015, when she said Millinocket teetered near bankruptcy. Her family connection to the local paper industry stretches back to its roots, and she has managed several former mill towns.

The paper mill in East Millinocket closed in 2014.

Jon Kamp/The Wall Street Journal

Today, local officials are trying to rebuild on a smaller scale that they hope is more sustainable. They are working closely with a local nonprofit focused on community and economic development in the region. Formed in 2014, Our Katahdin bought the commercial building in town two years later and the huge Millinocket mill site early last year.

The nonprofit has talked to more than 50 companies about potentially moving there, and has a commitment from a data-processing firm, said Steve Sanders, director of mill site redevelopment. Our Katahdin last week announced a $5.3 million federal grant for infrastructure improvements. It hinges on resolving an Internal Revenue Service lien.

The town is remote, but also a gateway to vast recreational areas, including Mount Katahdin, Maine’s highest peak. The natural splendor attracted John Hafford and Jessica Masse, a couple with two kids who run the graphic-design firm.

“Millinocket is Exhibit A of what happens to a community that was reliant on a single industry,” said Ms. Masse, a northern Maine native. Rebuilding with smaller pieces will take time, but she sees a worthy, long-term payoff.

“We want our kids 20 years from now to have the option of living here,” she said.

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