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MOP's $15 million financing package almost in place

Informational meeting at 6 tonight

October 05, 2011
GROVETON — The financing is almost entirely in place to allow MOP Environmental Solutions, Inc., of Bath to purchase and make needed improvements to the properties where Wausau Papers and Groveton Paper Board and ancillary functions were located, explained MOP vice president Wayne King in a Friday telephone interview.

"We're going forward with the Purchase and Sale Agreement (P&S)," he said confidently. King pledged that MOP (Maximum Oil Pickup) would communicate with the town before undertaking any of several anticipated phases of "building out the mill." King served as District 2 state senator from 1988-1994, the first Democrat elected to the post since the Civil War.

The company put $100,000 down when its president Charlie Diamond signed the P&S on Sept. 16 and agreed to complete the purchase in 60 days, paying the balance of $2 million. MOP has secured almost another $13 million in financing to bring to the table, but King said there is still room for more investors.

Plant buildings with a total of 500,000 square feet of space located on 25 acres on the Upper Ammonoosuc River, the waste water treatment plant (WWTP) with an 8-million-gallons-a-day capacity on 63 acres, the Brooklyn Dam and former power house on 7.7 acres, and more than 10 acres of miscellaneous parcels are being sold by Groveton Acquisitions, LLC, of Enfield, Conn. This entity was created by Jerome "Jerry" Epstein of Perry, Videx of Hainesport, N.J. and William Firestone of Capital Recovery Group (CRG) of Enfield, Conn., who frequently do deals together.

"I could have sold it for more to someone who would have scrapped the whole building, but I knew it would be better for Groveton to have someone local who would bring something there and bring in new industry," Epstein explained in a telephone interview. Everything is included except the processing equipment once used in papermaking. "We can buy time extensions (beyond 60 days), if needed, to finish our removal-scrapping of paper-making equipment," Epstein noted in a follow-up e-mail.

The concept behind MOP's plan for reusing the factory site — "the center of the community" — is to focus on green technology in a combined manufacturing facility and a research and education center, King said. "As we build the mill out, everything will be done with the community in mind — to benefit it with every choice we make and to improve the long-range prospects of the North Country's economy," he said, pledging that the town's air and water would remain both "clear and sweet."

Phase I calls for MOP, which produces patented cellulose-based oil absorbent products, to manufacture two new such products in Groveton plus cellulose insulation that King described as being as good as anything on the market but with a lower price tag.

MOP, which now has sales of approximately $1 million a year, anticipates growing substantially in the next year. The company soon expects to receive another patent to cover improvements to its original product, King said.

Likely Phase I would create 20 manufacturing jobs and another 10 administrative, sales and research and development jobs at the Groveton mill. If all goes as planned, he estimates that this number would increase to 100 by the end of 2012.

MOP now occupies a 50,000-square-foot space in Bath, powered by a .5-megawatt hydroelectric plant on the Ammonoosuc River. The absorbent materials it fabricates and bags take up a lot of space, King explained.

In Groveton, MOP plans to restore the Brooklyn Dam so it can generate 1 to 1.5 megawatts of electricity and also to operate the WWTP.

Fostering the development of a controlled environment agricultural system, such as "aquaponics" — a combined hydroponics and aquaculture system, — to grow vegetables for local as well as New York City markets is integral to MOP's "green" dreams. Growing local foods being seen more and more as important, King noted. Both he and MOP president Charlie Diamond have embraced the general concepts promulgated by Gilbert Preston, former executive director of the North Country Council (1989 to 2000) and now assistant professor and Director of Operations SUNY Center for Brownfield Studies at SUNY-ESF (Environmental Science and Forestry) in Syracuse, N.Y. Preston and the Center's students have theorized that the assets once needed in the Northeast to operate now-shuttered paper mills, including water and power, could be used for controlled environment agriculture.

"I've already heard from someone who would like to erect 40 new greenhouses on the property, heated by excess heat from the plant," King said.

Advanced recycling is another "green" business that King said MOP envisions being developed in the mill complex.

Only the first level of recycling — collection and baling of already sorted materials — is now being done in Cos, he said. MOP's tentative business plan calls for secondary recycling and processing, creating a series of value-added products from paper and other recyclables.

Research facilities would also be part of the mix and relationships would be established with White Mountains Community College (WMCC), UNH and other educational institutions located in New Hampshire and Vermont. On-site classrooms could be located in existing space to make WMCC courses more readily accessible.

Manufacturing bio-fuels would likely also be part of the mix as well using the natural gas supplied by the Portland Natural Gas Transmission System (PNGTS), whose step-down station is adjacent to the town's iconic covered bridge.

"We're looking to find synergistic businesses to build out the mill," King said. Precise planning is key, he noted, allowing each business to have access to loading docks and rail to move their products.

MOP also envisions making the mill's riverside more attractive, possibly developing a walkway for townspeople and others to enjoy.

Both King and Pat Garvin, senior economic development planner at North Country Council (NCC), are slated to answer questions at tonight's informational selectmen's meeting at 6 p.m. in the town offices.

Garvin (see accompanying sidebar) is NCC's point person for a $150,000 Economic Development Administration (EDA) planning grant for the Groveton Mill Redevelopment Project that was announced on Sept. 16 by Sen. Jeanne Shaheen. The funding application, submitted eight months ago and unrelated to the particular proposals being put forward by MOP, calls for the development of a comprehensive and integrated business, engineering, and marketing plan for the expansion and improvement of the mill complex, including installation of a combined heat-and-power system to lower energy costs. The EDA grant was matched by a $100,000 grant from the Neil and Louise Tillotson Fund. Most of the $250,000 will go to consultants, Garvin explained.

The studies will likely be completes within a year, since requests for proposals (RFPs) from qualified consultants must first be sought and then bids solicited and reports printed, Garvin said. The results of these studies will be useful to the community and to any developer. For example, one study would examine the huge-capacity WWTP and see whether it could be compartmentalized so that the entire plant would not have to be operated.

Martin Lord Osman
Salmon Press
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