Sale of Hampden trash, recycling plant expected in May or June

Waste and baled recyclables in Fiberight’s Hampden waste recovery plant. The plant’s sale has been delayed from March 31 to May or June. Courtesy of Fiberight/Coastal Resources of Maine

A committee representing the solid waste disposal interests of 115 Maine municipalities voted unanimously Thursday to extend a sale date with a Pennsylvania-based company that plans to buy the Coastal Maine Resources LLC recycling and waste-to-energy plant in Hampden.

The Municipal Review Committee had hoped Coastal Maine would be sold to Delta Thermo Energy Inc. by the end of March, but a delay in negotiations is moving the closing to May or June.

“Although progress is being made, we still have a couple of hurdles to overcome,” said Michael Carroll, executive director of the Review Committee.

Carroll was speaking Thursday in a virtual Municipal Review Committee board of directors meeting to which the public was invited. The board’s 8-0 vote to extend the deadline followed an executive session that lasted nearly 90 minutes. The bondholder trustees of the plant, Delta and the committee are still in negotiations, working through a very complex process, he said. He and Karen Fussell, president of the Municipal Review Committee’s directors, said their focus is on what is in the best interests of the committee’s municipal members.

Jon Pottle, the committee’s legal counsel, said there has been significant progress made in negotiations and both sides are close to seeing necessary documents in their final form.

“As noted, we’re not quite there at this particular stage, but I think we are quickly arriving at that,” he said.

Tony Smith, committee vice president who has been on the board seven years, said the common denominator during that time has always been to protect member municipalities.

“That’s first and foremost as we’re moving forward here,” he said.

In a virtual town hall meeting Jan. 19, the committee introduced Robert Van Naarden, founder and chief executive officer of Delta. He said his company focuses on clean municipal solid waste processing. His company was drawn to the plant because the facility is set up and has contracts in place with municipalities, Van Naarden said. Delta can start operating the facility soon after a sale, he said.

The recent delay in negotiations was caused by apparent differences between Delta and the bondholders that arose during negotiations, though Municipal Review Committee members would not reveal what those differences were.

“It just simply wouldn’t be appropriate to identify what those might be, because we’re in negotiations on those,” Pottle said.

Fussell said a public town hall on the proposed sale is expected to be held in April, and Delta officials would be there to answer questions. Multiple board meetings would also be held before a closing takes place, according to Pottle.

“We’re moving toward what we hope will be final terms that the parties can move forward on in this potential sale process,” Pottle said.

About 3/4 of municipal solid waste from member municipalities is going to the Penobscot Energy Recovery Co. in Orrington and the rest to Waste Management’s Crossroads facility in Norridgewock.

Coastal closed its facility May 28, 2020, for financial reasons.

To reduce the amount of waste being landfilled, Waste Management agreed to allow about 75% of that waste to go to Penobscot Energy Recovery Co. even though Waste Management had exclusivity to the waste and lost funds because of the move.

The Hampden facility is owned by Coastal Maine Resources, the company formed by Fiberight to finance, own and operate the facility.

The facility is pledged as collateral for repayment of Coastal Maine’s loans to a group of bondholders represented by a trustee, according to the committee’s website. As part of the sale process, Coastal Maine anticipates the bondholders will foreclose on the pledged assets, thereby becoming the owner, it says.

The Review Committee owns the land on which the facility sits, acts as the landlord, holds all the municipal waste contracts and is the permittee for all the state Department of Environmental Protection waste.

Delta has developed facilities overseas in Dresden, Germany; Shari, Hokkaido, Japan; Seoul, South Korea; Romania; Russia; South Africa and Singapore, according to the committee’s website.

“The bondholders and the MRC were given a recently dated document indicating that DTE will have access to more than adequate funding to purchase, operate and make necessary improvements to the Hampden facility, subject to completion of due diligence and customary terms and conditions of financing,” it says.

An attendee at Thursday’s meeting asked what the purchase price is for the facility, with Carroll saying that is a negotiations matter and he could not reveal that information. In response to another question about whether Delta would process sludge from out of state at the plant, Fussell said, “No.”

Central Maine communities that are members of the Municipal Review Committee include Albion, China, Freedom, Oakland, Palmyra, St. Albans, Thorndike, Troy, Unity and Vassalboro.