SKOWHEGAN — Sappi Fine Paper North America has filed a formal property tax abatement application with the Skowhegan Board of Assessors for its Somerset mill asking that the town lower its tax commitment.

The request, filed last week by S.D. Warren Co., a subsidiary of Sappi and the legal owner of the property, follows 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.

The mill’s owner claims that was not enough and has asked that its property taxes be cut even further.

“Sappi has expressed appreciation for the reduction in assessed value of the mill instituted by the town last year, but the company maintains that the reduction was not sufficient to reflect the actual value of the mill,” the company said in a statement Monday.

Last year, Sappi paid $9.3 million in taxes. The reduction in the mill’s value approved by town assessors last year cut taxes for the current year to $7.94 million, or about 48 percent of the town’s total tax revenue for 2015.

In its abatement application, the company asks that the tax value of the mill be cut by an additional $137 million, retroactive to last April 1. If Sappi gets the abatement it has requested, the company’s taxes would be cut, and the company would be in line for a refund of up to $2.2 million, the Skowhegan town manager said.


A portion of Sappi’s taxes were paid in October. The balance is due this month, said Town Manager Christine Almand.

A $2.2 million refund would be due if the company wins its case for an abatement of $137 million, the amount by which the company claims the town overvalues the Skowhegan mill.

In 2014, the mill’s value dropped from $567 million to $463 million, and the company is now asking for the town to further reduce the assessment to $326 million, according to the statement. That request is based on an assessment done by appraiser Duff & Phelps, the company said.

“Sappi is, by far, the largest taxpayer in Skowhegan and will continue to work with the town to find ways to minimize any financial impact that will result from a fair valuation of the Somerset mill,” Mike Haws, managing director of the Somerset mill, said in the statement. “We remain open to working with the Skowhegan Board of Assessors and Skowhegan officials to reach an amicable resolution to the company’s abatement request.”

The Board of Assessors has 60 days to respond to the abatement request, Almand said. “The town had a likely suspicion that we would be receiving such a request. I think it was pretty clear from the request they filed how [Sappi] felt about the assessment,” she said.

Almand said she was not sure what affect the abatement would have on taxes, but said the town budgeted an additional $300,000 for legal fees and costs at last year’s town meeting in anticipation that the mill would challenge the appraisal. In September, the tax rate in Skowhegan rose from $16.40 for every $1,000 in property valuation to $17.15.


“It’s definitely something we will be discussing in the budget process,” Almand said. “We went into last year knowing we could receive an abatement request and set aside that $300,000. We are just going to go through the process, and I can’t tell you what the likely outcome will be.”

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, nearby towns that have also been affected by sudden drops in value at paper mills.

According to the company, the adjustment is critical to the long-term viability of the Skowhegan mill.

“Sappi intends to operate the Skowhegan mill far into the future, as evidenced by the many significant investments we have made to maintain its world-class status,” Haws said. “But in order to remain competitive, we must also be low cost. Sappi accepts its responsibility to assume its fair share of the town’s tax burden based on an assessment that reflects the mill’s true value. Imposing an undue or excessive tax burden on the Somerset mill will not help our community.”

Rachel Ohm — 612-2368

Twitter: @rachel_ohm

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