JAY — Verso Androscoggin LLC and Andro Hydro LLC filed a joint application for an abatement of property taxes for tax year 2015.
The companies claim the valuation of the paper mill, associated property and hydroelectric facilities should be reduced by at least $296.99 million, collectively.
The town valued the real estate and personal property at about $636.99 million as of April 1, 2015, according to the application. Of that amount, real property is valued at about $174.8 million and personal property is valued at about $462.1 million.
The company claims the town significantly overvalued the property, which Verso claims should be valued no higher than $340 million for that tax year.
The request does not factor in Verso shutting down a paper machine and pulp dryer last fall. The company will factor those valuations into the 2016 tax year when it files its paperwork by April 1.
Verso sold its four hydroelectric facilities, now known as Andro Power LLC and formerly known as Verso Androscoggin Power LLC, on Jan. 7 to Eagle Creek Renewable Energy in New Jersey for $62 million. Two of those facilities were in Jay, and one each in Livermore and Livermore Falls.
Verso Corp. and 26 subsidiaries, including Verso Androscoggin LLC, filed voluntary petitions on Jan. 26 with the U.S. Bankruptcy Court in the District of Delaware to reorganize under Chapter 11 of the U.S. Bankruptcy Code.
The company said at the time that restructuring debt is necessary to strengthen the company’s balance sheet and to position Verso for long-term success.
Verso Androscoggin has also appealed Jay’s denial of lowering the value on the mill and properties for tax years 2013 and 2014. Those cases are at the state level waiting to be heard. No date has been set for the appeals.
Verso claims that proper valuation techniques for tax year 2015 were not used. It states in its application that the income approach to valuation and cost approach were not properly performed. It also believes obsolescence was not properly subtracted and the market value was not properly accounted.
The company also claims relevant factors were not considered as required under the law.
“In computing the assessments, the assessor discriminated against certain classes of property, by, for example, disproportionately and arbitrarily reducing the value of property located within (tax-increment financing) districts to benefit the town and inflate the taxes allegedly due from Verso,” according to the application.
Verso believes the assessments on the property are not in conformity with the law and result in unjust discrimination, and unequal apportionment of the tax burden in violation of the Maine Constitution. Its reasons, among others, are the property is assessed at a higher percentage of just value than other property in Jay.
All taxes for the mill, hydro facilities, personal property and real estate were $9.9 million in 2015 prior to the TIF reimbursement, which was $965,818, Town Manager Shiloh LaFreniere said.
Verso has paid the first half of its taxes; the other half is due April 1.
“The town will be discussing the next steps with our legal counsel and determine appropriate action,” she said.
In the 2013 tax abatement case, Jay selectpersons agreed to lower the valuation of the mill and associated properties from 815.4 million to $591.9 million. It resulted in a tax abatement of $829,258.
The company claimed the value should be about $460 million. It appealed to the Jay Board of Assessment Review, which upheld the Board of Selectpersons decision.
In the 2014 case, the town had valued the mill and associated properties at about $593.78 million. Verso claimed the valuation should be no more than $400 million for that tax year. It requested a tax abatement of at least $193.79 million in valuation.
Town boards denied Verso’s appeal.
The company appealed both cases to the Maine State Board of Property Tax Review, which has not yet heard the appeals.
NOTE: The story was modified since it was first published to add the word million after $193.79. It was a reporting error.
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