The most popular gathering spot in Millinocket is an empty dirt lot with a view of a demolition site.

The lot is at the terminus of a dead-end dirt road, called the Coal Ash Road by locals, cratered with potholes, past an empty playground and a fenced-in electric substation. A steady stream of pickup trucks, their cabs carrying somber faces, makes its way through the lot during the day. Some visitors park and sit with binoculars pressed to their eyes. Some opt for a slow drive-by, a shake of the head in disbelief.

But all eyes are focused on one thing.

Staring back at them across a narrow stretch of Millinocket Stream is a pile of rubble that was once the largest paper mill in the world, and the heart of this community for more than 100 years.

When Great Northern Paper Co. built the mill in 1900, Millinocket grew so quickly it was called the “Magic City,” a name that stuck. Today, the mill’s current owner is tearing it down for scrap, a process that began about 18 months ago.

“It’s a sad sight, isn’t it?” asks an old man riding a red scooter with two small American flags streaming from its tail. He parks alongside the fence that separates the dirt lot from the riverbank, and from under the visor of a hat advertising a local computer repair shop stares at the vast piles of debris and the mill’s half-torn-down steam plant whose jagged walls still sprout dead wires and rusty pipes.

Did he work in the mill?

“Only 40 years!” says the man, whose name is John Levesque.

Now 84, Levesque began working for Great Northern Paper shortly after the end of World War II at the age of 16. His first job was in the mill’s woodyard, where the logs that were floated down the region’s rivers and lakes from forestlands were stored before being turned to pulp and ultimately into paper.

Now he comes to the dirt lot every day to watch the destruction of the place where he toiled for four decades.

The destruction of the mill marks a pivotal point in the town’s history. Though the mill hasn’t operated since 2008, some people held out hope that as long as it stood, it would be restarted and return the town to its former glory.

Because of Great Northern’s mills – a sister mill was built in neighboring East Millinocket in 1906 – the Katahdin region once boasted among the highest per capita incomes in the state and a growing and affluent population. Unemployment was rare and jobs at the mill were plentiful. During Great Northern’s height in the 1960s and 1970s, it employed more than 4,000 people and it was common for young men to graduate from Stearns High School one day and show up for work at the mill the next.

But the last few decades have pummeled the community and, with both mills down, the situation is now dire. The town is hemorrhaging people, having lost 35 percent of its population since 1990. It’s seizing homes by the dozens that people have walked away from and let fall into disrepair. Real estate values have plummeted. Jobs are sparse and unemployment far exceeds the state average.

“I feel like I’m the captain of the Titanic,” says Peggy Daigle, Millinocket’s hard-driving, sharp-witted town manager. Her gallows humor aside, Daigle is serious about her job, which she sees as telling the truth, doling out tough love to residents and preparing them for a rocky future without the mill and the millions of dollars it once delivered to the town’s coffers.

“The rapid decline this town is facing is quite unprecedented,” she says.

From the outside looking in, it’s easy to believe you’re watching the death of a community. As the mill goes, so goes Millinocket. But there are those with hope for the future, those who see the demolition of the mill not as the town’s death knell, but as a milestone in the town’s evolution. Where that evolution will lead is a topic of intense debate.

Some pin their hopes on becoming a destination for tourists and adventure-seekers looking to hike and kayak during the warmer months and cross-country ski and snowmobile in the winter. Others see the revival of the forest products industry as the only solution. Most are somewhere in the middle.

What Millinocket can expect from a mill-less future will depend on its people, their capacity for cooperation and their vision for reinvention.

THE PAPER TRAIL

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illinocket was the quintessential company town. Great Northern Paper owned the land, paved the roads, built the bridges and provided jobs for anyone who wanted one. For many years, this symbiotic relationship allowed the company and Millinocket’s residents to thrive.

Millinocket’s population peaked at more than 7,700 residents in the 1960s and 1970s (not including East Millinocket, which had a population of 2,567 in 1970), according to the U.S. Census Bureau. The towns had the highest manufacturing wages in the state. In 1973, average annual gross manufacturing wages in the Millinockets were $11,951 (roughly $64,000 in today’s dollars) compared to a state average of $7,050 (nearly $38,000 in today’s dollars), according to the Census of Maine Manufactures, a now-defunct annual report the Maine Department of Labor issued until the mid-1990s.

The Millinocket and East Millinocket mills produced newsprint for some of the largest newspapers on the East Coast, including The New York Times. It produced paper for once-ubiquitous phone books and catalogs. The people of Millinocket could boast that on any given day, a majority of the people on the East Coast held Millinocket-made paper in their hands.

George Hobbs, a second-generation millworker who began working for Great Northern Paper in 1978, witnessed the boom.

“You would not believe these two towns,” he says. “You couldn’t find a parking spot on Main Street, I don’t care what time it was. The playgrounds were full of kids, everybody’s pockets were full, the money was flowing, everyone was happy. The company took care of the people.”

Hobbs, 55, says the company installed his parents’ first telephone and sent a crew to pour the foundation of his father’s home.

“All he had to do was pay for the concrete,” he says.

During Great Northern’s heyday, if someone from Millinocket went to buy a car in Bangor, the salesman wouldn’t even bother calling a bank to make sure they’d provide a loan, Hobbs says proudly.

“You just sign your fricking name and go,” he says. “That was the reputation the workers and towns had for being able to take care of themselves.”

Hobbs is one of the 212 employees laid off in early February when the East Millinocket mill was idled. Its owner, Cate Street Capital, shuttered the mill, citing high energy and wood costs. The mill produced newsprint for customers such as the Maine Sunday Telegram. The mill continues to employ roughly 20 people to keep it ready for a potential restart.

When Cate Street Capital bought the mills in late 2011, they were both idled. People hoped the company would provide the mills with a necessary shot of adrenaline. The East Millinocket mill started producing paper once again, but the company never reopened the Millinocket mill.

“They seemed to talk the talk and walk the walk for a while, got everybody’s hopes up,” Hobbs says. “Now everything is going down the tubes.”

Millinocket’s unemployment rate has fluctuated between 13 percent and 20 percent since its mill closed in 2008. East Millinocket, where the mill operated until late January, had an unemployment rate of nearly 20 percent in June.

Ned Dwyer, president of the new Great Northern – the name was revived when Cate Street took over – says the company continues to work on reopening the East Millinocket mill. Because the newsprint market is in decline, he says the company is exploring the potential of making different paper for more lucrative markets.

But people are losing hope.

“It looks like it’s the ninth inning with two outs and the count is 3 and 2 and the batter is probably going to hit a pop fly,” Hobbs says. “Every day goes by I’m losing my confidence. I was very upbeat, but I really thought I’d be back to work by now.”

Stu Kallgren, president of the local paperworkers’ union and, as manager of the East Millinocket mill’s waste water treatment plant, one of the few remaining employees, says “patience is wearing thin” in the community.

“Why someone hasn’t been shot up here, I don’t know,” says Kallgren, sitting in the union’s office in a small strip mall down the street from the East Millinocket mill. “There’s a lot of stress up here.”

DOWNWARD TRENDS

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hile the original Great Northern was responsible for Millinocket’s birth and golden years, it’s also at least partly to blame for the town’s current economic malaise. For most of its history, Great Northern prevented other industries from locating in town because it didn’t want to compete for the labor pool. Because it owned the land, it had that power.

The resulting lack of economic diversity coupled with the town’s geographic isolation crippled the area when Great Northern began to stumble. In the late 1980s, squeezed by increasing competition in the paper industry, Great Northern announced its first big layoff of more than 1,200 workers at its Maine mills. Despite multiple economic development efforts, the town has never recovered.

Millinocket’s population has decreased nearly 42 percent from 1970 to today, from 7,742 to 4,506, according to Census data. Daigle, Millinocket’s town manager, expects that number to keep falling. She cites Census estimates that predict Millinocket’s population will bottom out around 2,300 by the end of this decade.

An even starker metric of how the town’s population has changed is the size of graduating classes at Stearns High School. Richard Angotti, who worked 40 years for Great Northern Paper and is now chairman of the Millinocket Town Council, graduated from Stearns in 1969 in a class of 235 students. This past May, Stearns’ graduating class was 38.

Nearly 60 percent of the current population is 45 or older.

“We’re a dying community,” says Hobbs. “We are losing our young and talented people. They’d like to stay, but they can’t get a job. How’s the community going to survive? How’s the community going to grow?”

Greg Libby has been grappling with the same issue, trying hard to keep two of his sons in the area. The 53-year-old Millinocket resident was laid off from the East Millinocket mill in early February along with his sons, ages 31 and 26.

It was Libby’s third time being laid off in the last decade and he realized enough was enough. Rather than hope for the mill to reopen and return to his job as superintendent of the plant’s pulp mill, he decided to do something he’d considered many times: start his own business.

He bought a snack distribution route from Michaud Distributors, a company that delivers snacks such as Humpty Dumpty potato chips to supermarkets and convenience stores. He hired his 26-year-old son to drive the route. He didn’t have a job for the older son because he thought he’d be back in the mill by now. He only recently hired himself for $8 an hour to handle the warehousing and fill in when his son can’t drive the route.

“We’re not just going to sit back and dwell on it and whine,” says Libby. “We’re just going to move on and make a living however we can. This was something I could do and still live in my house and try to keep my grandkids in the area. It’s also been kind of therapeutic because it’s kept my mind off the mill situation.”

Options for others laid off from the East Millinocket mill are sparse. Some people are driving 50 miles to Bangor for work. The federal government has approved the East Millinocket workers for job retraining assistance, but the average age of workers is 58. For many, going back to school or retraining isn’t realistic.

DOWNSIZING A TOWN

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hen Peggy Daigle arrived in Millinocket in April 2013 to take over as town manager, she found a town with a rapidly disappearing tax base, and without a rainy day fund. The town had never saved for bad times – “an indication of how wealthy the community once was,” she says.

No one ever expected Great Northern Paper would fall so far.

She acknowledges she’s a short-timer. She was on the verge of retirement when the Millinocket Town Council offered her the job because of her roots (she grew up in East Millinocket) and her experience leading towns through economic challenges. As Old Town’s town manager, she led the revitalization efforts after that town’s mill went down. She was brought in to manage Millinocket’s downsizing – reducing housing stock, cutting back some services and looking for other ways to save money.

The town will lose 15 percent (or $35 million) in taxable value this year, she says, and another 15 percent next year, for a total loss of roughly $70 million. That equates to an approximate loss in taxes of $2.1 million, she says. Her job is to cut $3 million from the town budget.

“I’ve been in a lot of towns where the economic shifts have happened, but I can tell you this is by far the most drastic I’ve ever experienced,” she says. “People are still in a state of denial.”

This year she was successful in cutting $600,000, split evenly between the town and school budgets. Funds for school crossing guards were eliminated and the town’s library budget was cut by a third, but the most dramatic cut was the elimination of health care reimbursements for about a dozen retired town employees, which saved the town $92,000, Daigle says. The school department, on the other hand, still pays about $620,000 a year for retiree health insurance. The town is currently embroiled in a legal battle to try to release the school department from that obligation, Daigle says.

Daigle says because she’s nearing retirement, she has the freedom to speak the truth.

“We should be able to get through this,” she says. “Is it easy? Nope. Will it hurt some people? Probably. We need to figure out how much pain we can handle.”

Because of the drop in the town’s taxable value and resulting loss of revenue, Millinocket was forced to increase the tax rate last year by about 3.5 mills as a short-term fix to increase the amount of money in the town’s fund balance, Daigle says. The town’s mill rate now stands at 29.95.

“The reason it went up is we’ve been losing valuation hand over fist,” Daigle says.

The valuation will continue to drop, but she hopes the tax rate doesn’t get beyond 30. It’s not sustainable as is, she says, because it will discourage new investment.

“Who in their right mind would build anything new in Millinocket with that tax rate?” she says.

In just the year and a half since she took the reins, 76 commercial and residential properties in town have passed through the town’s ownership, having been seized for back taxes.

“I could probably throw a rock and hit a home we’ve owned,” she says.

Most have been sold at auction, some for as low as a few thousand dollars. The town as of Aug. 11 still owned 22 residential properties.

“It’s not our goal to make a ton of money,” she says. “Our goal is to get them to people who want to live there, put money into them and be productive residents,” Daigle says.

In an effort to reduce the housing stock, the town has given some seized residential properties away for free to neighbors if they agree to pay the cost of demolition. The strategy is to reduce the town’s bloated and blighted housing stock, the result of losing more than 42 percent of its population in the last 40 years. It will also help beautify the town by eliminating run-down homes and giving the remaining properties bigger lots.

WHAT MAKES IT ‘THE MAGIC CITY’

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ngotti, the councilman and 40-year veteran of Great Northern Paper, doesn’t want to talk about the old mill. As chairman of the Millinocket Town Council, he wants to forget the mill and move on. It’s frustrating, he says, that all anyone from outside the community wants to talk about is the mill, even though the mill hasn’t operated since 2008.

“It’s history. The mill is gone – plain and simple,” he says. “Half the problem right now is the sensationalism about this mill that is no longer in Millinocket.”

Instead, he wants to focus on the future.

He believes the town’s difficulties are part of a natural evolution toward a healthy and viable future. He points to businesses such as Pelletier Manufacturing and Millinocket Fabrication and Machine that are adding jobs, and Thermogen Industries (another Cate Street company) that wants to build a wood pellet mill at the site of the old paper mill. He points to tourism as at least a partial answer to the community’s economic struggles. He points to the people.

“It’s not the one-horse town it used to be,” he says. “This town will survive because it’s neighbor helping neighbor. What makes Millinocket great? It’s not the mill that makes it great, it’s the people that make the town great. That’s the magic within the Magic City.”

Read part 2: What will it take for Millinocket to rise?

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