Company plans $31M factory at Lincoln paper mill site, will employ 100 people

Posted on September 25, 2019 | Success Stories
Photo of Lincoln Paper and Tissue Mill

By Charles Eichacker, BDN Staff • September 25, 2019

A North Carolina company that makes a composite wood material used in construction plans to invest $31 million into opening a new factory in Lincoln that will employ about 100 people.

LignaTerra Global LLC will build its new 300,000-square-foot plant on a section of open land that was formerly part of the former Lincoln Paper and Tissue mill site, but that the town bought early last year. The company initially planned to open its plant at the former paper mill site in Millinocket but withdrew those plans late last year as a local economic development group struggled to resolve an old federal tax lien on the property.

Lincoln officials now plan to sell or lease some of the 76.6-acre site to the company with the understanding that its investment could generate hundreds of thousands of dollars in property tax revenue over the coming years, according to Jay Hardy, Lincoln’s economic development director.

LignaTerra produces a composite wood material called cross-laminated timber that’s meant to serve as an alternative construction material to steel and concrete. Builders have used LignaTerra’s material in projects in at least two states, Colorado and West Virginia, according to the company’s website.

It will probably take LignaTerra at least a year to build and open its Lincoln facility and train the people who would run it, according to Brien Walton, the head of a regional economic development agency, Acadia Capital Management II, Inc., that’s helping the town and company complete the project.

The operation will be funded by venture capital firms that are taking advantage of a new federal tax program that’s meant to promote investment in economically depressed parts of the country, according to Nick Holgorsen, LignaTerra’s managing director and co-founding partner.

Under that program, a part of the 2017 tax bill passed by Congress, the town of Lincoln has been designated a so-called Opportunity Zone, and the town has used that status to create a special fund through which investors can support eligible projects and potentially receive a break on their capital gains taxes.

Holgorsen said Lincoln’s proximity to forests and big Northeastern markets with a demand for building materials, the region’s workforce and the helpfulness of town officials all played a role in the company’s decision to open a plant there.

“Central Maine, and Lincoln specifically, has proven to be an ideal location for value-added timber products,” he said. “The proximity to healthy, working forests provides quick access to necessary renewable resources.”

LignaTerra originally announced in early 2018 that it would locate its first Maine factory at the former Great Northern Paper Co. mill site in Millinocket but withdrew those plans late last year as a local economic development group struggled to settle the mill’s old $1.5 million tax debt to the IRS. (The Millinocket group recently announced that it had reached a deal to resolve the debt by paying off about a third of it.)

Hardy said that the new stream of investment and tax income from LignaTerra will help Lincoln fund other investments on its section of the former mill site, which it is now calling the Maine Forest Products Innovation Park.

Those investments could in turn make the property more appealing to other businesses, according to Hardy. The town is working to develop a solar array and a plant that generates electricity. It’s also working with state and federal environmental agencies to clean up the contamination around the rest of the former mill site.

“We think it’s a big day for Lincoln, but we think it’s a bigger deal for the forest products industry and the forest economy in Maine,” Hardy said. “We’re trying to create a small ecosystem on the mill site so that a bunch of companies can share its services and build on each other’s technology and intellectual property.”

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