MRC defends selection of firm with ties to failed operations as Hampden's plant operator
Other news: QSJ sets record usage on reporting of protesters
SOMESVILLE, Aug. 6, 2022 - This week’s report is abbreviated. The QSJ was working on the history of the company chosen to restart the Hampden regional waste plant, but was beaten by the Bangor Daily News.
Reporter Sawyer Loftus Wednesday broke the story that:
“A company expected to play a key role in reviving a Hampden trash plant that’s been closed more than two years is inextricably linked with a firm that came to Maine more than a decade ago, pledging to reopen the Katahdin region’s two paper mills and start a facility making wood pellets that could serve as a coal substitute.
“That firm, Cate Street Capital, instead left behind operations that either failed or never materialized, along with unpaid bills to vendors and the federal government, and two bankruptcies. It restarted the East Millinocket paper mill for about 2½ years, but the Millinocket mill lay dormant. The wood pellets plant slated for Millinocket never came to fruition.
“In the process, Cate Street benefited from more than $140 million in state and federal tax breaks and lending in its first two years of owning the mill properties, the Bangor Daily News reported at the time. Both Cate Street and its papermaking subsidiary, Great Northern Paper, have since filed for bankruptcy protection.”
You may read the BDN report here. The BDN allows three free articles per month to non-subscribers.
The Municipal Review Committee, the group that represents the 115 Maine communities that plan to send their trash to the Hampden facility, was aware of CS Solutions’ links with Cate Street Capital, board president Karen Fussell told Loftus.
“CS Solutions brings experience in plant restructuring, significant experience in pulp as well as waste operations, and strong Maine ties,” she said.
Fussell noted that CS Solutions will not be a facility owner, just a vendor, and will play no role in its corporate governance.
“MRC has had extensive discussions with Revere regarding their reopening plans and proposed operating structure, and we are confident that it can succeed,” she said.
BDN reported, “CS Solutions is closely linked with Cate Street, sharing officers, addresses and some business history with the investment firm that began in Portsmouth, New Hampshire, in 2009 to invest in sustainable development.”
Revere Capital Advisors, an investment firm based in New York, is in negotiations with the MRC to acquire and run the plant. It announced that, if chosen, it will hire CS Solutions as the principal operator.
The three top executives of CS Solutions are Ned Dwyer, chief executive officer, George Gervais, chief operating officer, and Dammon Frecker, executive vice president.
Dwyer served as president of Cate Street’s Great Northern Paper as the East Millinocket mill closed for good and Great Northern later filed for bankruptcy.
Gervais was Maine’s commissioner for economic development under Gov. Paul LePage who defended the use of taxpayers money for Cate Street in a Central Maine Newspapers column arguing the tax credits sustained the East Millinocket mill longer than it would have survived otherwise.
Maine policymakers have since tightened the program’s rules, but Cate Street was able to receive $16 million under the state’s New Markets tax credit program. The refundable credits were for investments that didn’t improve any part of the East Millinocket mill, an investigation by the Portland Press Herald found.
In 2018, Gervais was rejected by the legislature in LePage’s nomination to make head of the state’s Housing Authority after it was reported he was a senior loan officer at Carteret Mortgage Corporation, which filed for bankruptcy in 2008 after it was accused in numerous lawsuits of predatory lending practices, including allegations that the firm was involved in “a giant fraud scheme which has resulted in hundreds of faulty mortgages in the Detroit area.”
Gervais also founded EVO Inc. and Grill Concepts, formerly based in Searsport. Waldo County records showed that dozens of liens were put on the property at One East Main Street, mostly in the mid-2000s, due to unpaid taxes and other obligations. According to Penobscot County records, more than $14,000 in taxes went unpaid, forcing the state to impose a lien on a PO Box in Bangor registered to Gervais.
Frecker has been active in the management of the New Hampshire biomass plant, called Burgess BioPower, which has been a point of debate in state politics because it produces power that’s more expensive than the market rate.
He advocated for successful legislation this past spring that will allow the plant to keep operating while producing above-market-rate power, with the cost shouldered by New Hampshire utility ratepayers, the BDN reported.
The MRC is like the Peanuts' character “Pig Pen.” A cloud seems to follow every step the committee makes.
It’s great to see BDN’s renewed interest in the MRC. On April 10, 2021, BDN reporter David Marino Jr. wrote that the company selected then to take over the plant, Delta Thermo Energy, “appears to have mischaracterized its work overseas and listed people as technical advisers on its website without their knowledge or permission. https://www.bangordailynews.com/2021/04/10/news/bangor/prospective-hampden-waste-plant-buyer-listed-people-as-technical-advisers-without-their-knowledge/?fbclid=IwAR0JIXVa9pA65FGsdwE2iQQNXNZgjJlP2P-5yknrmOjzWOVQyVODz8rtskg
Delta Thermo lost its rights after failing on financing promises.
Protests growing in size at Northeast Harbor home of Leonard Leo
NORTHEAST HARBOR - The largest protest in front of Leonard Leo’s house occurred this week, the day after Kansas voters overwhelmingly rebuffed an attempt to ban abortions. The QSJ also recorded its highest daily usage since I began writing the blog in March 2020. A total of 7,446 views were reported by Substack of my news alert of the arrest of a protester on July 31, including 3,052 view of the video of the arrest. The next day 6,186 views were reported when I identified the protester who was arrested. The QSJ was told the post of the video went viral among friends of the 21-year-old graduate of MDI High School and that it was viewed by many young people.
POSTSCRIPT: I will be joined by guitarist Peter Rodriguez at my Sunday gig at Nor'Easter Lobster Pound from 3 to 5. Tell the wait staff you're a QSJ reader, and I will buy your first drink.