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Management Side
Demolition Stops at Bucksport Mill Site After Lack of Payment
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Bucksport, Maine, USA 10 March 2016 -- (From The Bangor Daily News) -- A lack of payment for work performed at the former Verso Paper mill has resulted in a cessation of demolition work and an eerie silence at the sprawling riverside industrial site.

According to Susan Lessard, interim town manager for Bucksport, subcontractors walked off the job this week after DeNovo Constructors failed to pay them for work they have done at the site. DeNovo, based in Chicago, is the demolition contractor hired by AIM Development to demolish and remove the former mill buildings from the 250-acre property.

Lessard said Wednesday that subcontractors began calling the town earlier this week in an attempt to contact DeNovo about the lack of payment. She said the town has no contact or relationship with DeNovo, and so provided the subcontractors with contact information for AIM, which acquired the property from Verso last year.

"DeNovo is having financial difficulty and has stopped work at the site," Lessard said. "I am sure [AIM is] even more unhappy with this stoppage than we are."

Jeff McGlin, AIM's vice president for development, did not return a voicemail message left for him Wednesday afternoon.

According to documents filed in federal court in Illinois, DeNovo was sued last year for failure to make pension payments and to pay union dues on behalf of its workers. The parties agreed to settle the case last September for an immediate payment of approximately $68,000 and an additional $42,000 divided among subsequent monthly payments. It was reopened in December, however, after DeNovo failed to make one of those scheduled payments, according to court documents.

On Wednesday, March 9, the civil case was terminated when a federal judge ordered DeNovo's bank to turn over $36,800 to the independently controlled pension fund. The judge also ordered DeNovo to obtain and maintain a $50,000 surety bond "to guarantee payment of future wages and benefit contributions," court documents indicated.

Lessard said the town is concerned that the stoppage will result in the project taking longer than 12 to 14 months to complete. She said the town set that completion timeline in the demolition permit that it issued to AIM last fall.

"Our concern, obviously is the timing," Lessard said. "We want this [project] back in progress ASAP."

The longer it takes to complete the work, the longer it will take to find a new use -- and hopefully a new employer -- for the site, she said.

"There will be no redevelopment of this site until [the demolition] is completed," Lessard said.

AIM officials have not indicated what it will do with the site once the mill is demolished, but they have suggested they likely will try to redevelop it, as they are doing with another former Verso mill in Sartell, Minnesota. They have said they will not use the site as a permanent metal recycling facility.

As a condition of it issuing a demolition permit to AIM, the town required the property owner to post two bonds to guarantee completion of the project.

One ensures a bond of $3.9 million, directly accessible to the town, in the event that AIM does not complete the demolition project. The other gives the company seven years to find new uses for concrete foundations at the property and, if it cannot secure new uses for them by then, guarantees up to an additional $600,000 to have the foundations removed.

AIM Development, a subsidiary of Montreal-based American Iron and Metal, acquired the former paper mill after Verso decided to shut the facility down and to lay off more than 500 millworkers at the end of 2014.

About 1,000 people had worked at the mill in 2000, when it was owned and operated by Champion International. A series of industrial owners had made paper at the site since 1930.

 

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