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MILLINOCKET, Maine (NEWS CENTER) --- A lengthy standoff over unpaid taxes in Millinocket may be over, which could finally clear the way for the development of a new pellet mill here.

The town has been owed millions in back taxes on equipment at the shuttered paper mill. The company managing the site was looking to sell those devices at auction this month but the town took legal action to stop that from happening weeks ago. Now with a new agreement approved by the town council, things could be sorting out.

The company, Cate Street Capital, has long been trying to put the pellet mill -- a project called Thermogen --- on the old site. Supporters argue once up and running the mill could create dozens of badly needed jobs for the Katahdin Region. Yet officials with Cate Street say they can't keep pursuing Thermogen until the old equipment is sold off.

The problem of course is the town has been owed more than $2 million in back taxes on those devices, including the mill's iconic paper machine number 11.

Just weeks ago Millinocket leaders made it clear they had had enough. They filed a tax lien against Great Northern Paper West and said unless payment was made, the equipment could not be auctioned off. As a result many people, including Maine Governor Paul LePage worried what kind of impact the standoff would have on the project.

Yet late Monday afternoon Millinocket leaders say the two sides had hammered out an agreement to get the taxes paid.

Under the agreement, the town will lift the lien and Cate Street will be able to proceed with the auction this week, provided Millinocket gets paid in full when the equipment gets sold.

Town councilors say they worked on this plan with the company for about a week and they are hoping this will be the start of some progress.

"It started out a little rough but it settled down and we all realized the position we needed to be in," said Rich Angotti, who is chair of the Millinocket town council, "and so everybody worked together to get to that point."

"I hope this is a new beginning with a lot of positive communications between us and Cate Street," remarked council woman Gilda Stratton.

Under the agreement if Millinocket doesn't get paid this week the town can put the lien back on.

The auction at the old mill will take place on Thursday.

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