SKOWHEGAN — The Skowhegan Board of Assessors is scheduled to meet Thursday afternoon for a possible decision on a request by Sappi Fine Paper North America to cut the property tax value of its paper mill on U.S. Route 201 by more than $137 million, which would cost the town an estimated $2.2 million in revenue.
The meeting is set for 3 p.m. in the Council Chambers at the Town Office on Water Street.
The paper mill is assessed for taxation by the town at $463,630,900. The company says the property should be taxed based on a value of $326,343,426. The difference — the amount by which the company says the valuation needs to be cut — is $137,287,474. Sappi’s estimate of the mill’s value is based on a study by Duff & Phelps Corp., a New York valuation firm.
A possible decision on the Sappi request comes this week with the release of the company’s 2014 Sustainability Report, in which corporate officials detail how Sappi is “driving out internal waste” as part of a five-year sustainability plan, according to a company statement Wednesday.
Sappi says that it has the lowest reported carbon footprint among domestic competitors because of the company’s focus on energy efficiency and renewable energy. The company said this is in part because of the successful completion of the final phase of a natural gas conversion at Sappi’s Somerset mill in Skowhegan this past November.
“This major capital project reduces the mill’s greenhouse gas emissions and helps access to natural gas by the local communities,” Sappi said in a news release.
Contacted on Wednesday, Andrea Maker, administrator at Maine Pulp and Paper Association, said it does not comment on company specific matters.
A decision on Sappi’s request for a cut in property tax value was postponed by the board April 10, when Skowhegan’s assessor’s agent Bill Van Tuinen said there still were some questions to be answered. Van Tuinen said Wednesday that some additional information will be offered by the company Thursday, and the Board of Assessors will discuss all of that behind closed doors in executive session to protect the confidentiality of some company information.
“They could move to either make or deny an abatement — it’s all a possibility,” he said.
Assessors, representatives of the mill, attorneys and Van Tuinen have addressed various methods of figuring out what the mill is worth. An abatement is a lowering of the assessed value of a property for tax purposes.
Sappi filed a formal property tax abatement application in March with the Skowhegan Board of Assessors for its Somerset mill, asking that the town lower its tax commitment. The board has until May 4 to make a decision.
The request, filed by S.D. Warren Co., a subsidiary of Sappi and the legal owner of the property, followed months of negotiations between the town and the mill that last September resulted in a $100 million cut in the tax valuation of the mill.
But Sappi claims that reduction was not enough to reflect actual diminished value of the mill. Last year, Sappi paid $9.3 million in property taxes.
The previous reduction in the mill’s value, from $567 million to $463 million, approved by assessors last year, cut its tax bill to $7.94 million, or about 48 percent of the town’s total property tax revenue.
If the company disagrees with the final decision by the Board of Assessors, it can appeal to the local Board of Assessment Review. If the company is still dissatisfied, it can appeal to the state Board of Property Tax Review.
The town is also waiting to hear the outcome of emergency legislation that has been proposed to provide tax relief for Skowhegan as well as Jay and Madison, other nearby towns that have also been affected by sudden drops in value at paper mills.
Doug Harlow — 612-2367
Twitter: @Doug_Harlow
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