Sappi North America, Boston, Mass., USA has filed a formal property tax abatement application with the Skowhegan, Maine, Board of Assessors for the Somerset mill. Sappi filed this request because it believes the assessed value of the mill determined by the Town of Skowhegan greatly exceeds its fair market value. A fair valuation is critical to the long-term financial health of the mill.

The value of paper mills across North America has fallen sharply in the past few years due to structural demand declines in the industry. Even mills like Somerset that make coated paper for use in high-end magazines and catalogs have experienced shifting demand to digital advertising, tablets, and mobile devices. The lower demand has made it difficult for many mills to remain profitable.

"Sappi intends to operate the Skowhegan mill far into the future, as evidenced by the many significant investments we have made to maintain its world-class status," said Mike Haws, managing director of the Somerset mill. "But to remain competitive, we must also be low cost. Sappi accepts its responsibility to assume its fair share of the Town's tax burden, based on an assessment that reflects the mill's true value. Imposing an undue or excessive tax burden on the Somerset mill will not help our community. Qquite the reverse, it will create a competitive cost disadvantage in global markets and put jobs and future investment at risk." 

In 2014, the Town of Skowhegan lowered the appraised value of taxable assets at the Somerset mill from $564 million to $464 million. Sappi has expressed appreciation for the reduction in assessed value of the mill instituted by the Town last year, but the company maintains that the reduction was not sufficient to reflect the actual value of the mill.

A recent appraisal conducted by Duff & Phelps, a widely respected firm skilled in appraising industrial properties such as the Somerset mill, supports the company's position that the Town of Skowhegan has overvalued the mill. Based on the results of the appraisal, the value of the taxable assets of the mill is $326 million. 

The mill employs more than 730 workers and its activities support jobs for thousands of Mainers. Sappi says it has consistently demonstrated its commitment to keeping the mill competitive and operating sustainably for many years to come. 

 

"Sappi is, by far, the largest taxpayer in Skowhegan and will continue to work with the Town to find ways to minimize any financial impact that will result from a fair valuation of the Somerset mill," Haws said.

 

"We remain open to working with the Skowhegan Board of Assessors and Skowhegan officials to reach an amicable resolution to the company's abatement request."