A settlement agreement has been reached by Millennium Marine USA and the Washington County government that has as a part of its terms the public auction of four boat molds that were used by the former Eastport‑based company. The county government will auction off the boat molds on Monday, November 13, at 9 a.m. at 56 Clark Street, a vacant lot in Eastport that was purchased by Millennium's owner, Cory Guimond.
Guimond's Canadian company, Millennium Marine Inc., was the recipient of $524,000 in U.S. Economic Development Agency (EDA) grant funds when the county purchased the four molds for use by his Millennium Marine USA company, according to the security agreement between the EDA and the county. As part of the EDA grant terms, the county was required to retain a 15‑year lien on the four molds.
As stipulated in the settlement agreement, a public auction ad was published in the Bangor Daily News coastal zone for 30 consecutive days and included two larger ads about the auction. The ad states that all four molds will be auctioned for a minimum price of $15,000, with the title to transfer 30 days after the auction or when the hulls currently under construction are completed and removed. The ad does not say where the hulls would be removed from or who would complete the construction. In addition, the ad states that "trademark rights must be obtained separately," with Cory Guimond as the contact person for more information. The language in the settlement is slightly different from the ad, stating that "title will be subject to the design copyright as indicated in the lease between Washington County and Millennium Marine USA."
A preliminary search of the U.S. Trademark and Patent Office turned up no trademark information under the company's name. If the molds do not find a buyer, the settlement stipulates that "Washington County will sell the remaining molds and equipment to Millennium Marine USA for $2,000 on or by the date of the auction." Guimond is required to pay the county a separate sum of $20,000 by or before November 1, 2018.
The terms of the settlement include the provision that the two parties involved cannot discuss the terms of the settlement; however, a provision allows for the release of settlement terms as required by the Freedom of Access Act (FOAA). The Quoddy Tides filed a FOAA and received a copy of the settlement.
The City of Eastport, while a party to the counterclaim lawsuit, is not a part of the settlement. The settlement was signed by Guimond on September 25 and by Washington County Commissioners Chris Gardner, John Crowley and Vinton Cassidy and Washington County Manager Betsy Fitzgerald on October 2.
In a prepared statement, the county commissioners write of the settlement, "Aware of how expensive litigation is and cognizant that this case could be lengthy, Washington County continued to work with Millennium Marine and EDA to try to work out a solution. After much work, Washington County and Millennium Marine have now managed to resolve their differences."
History of EDA grant partnership
Originally the City of Eastport, in partnership with the county, was the EDA grant applicant with Ocean Renewable Power Company (ORPC) as an interested party in using the former Guilford mill building in Quoddy Village. After the initial grant application and award, ORPC changed its business model. The company notified the city in 2011 that it would not need the facility. The city reached out to the composites industry and economic development organizations for assistance in its business search.
The EDA grant was to expire in the spring of 2013. Former City Manager Jon Southern was at the helm at the time and visited Guimond's Canadian business, which had looked at a U.S. location in 2007. The Canadian boatbuilder expressed an interest in the facility, citing a lack of employees in the area of his Canadian facility as well as the Jones Act and the need to have his boats made in the U.S. for ease of access to U.S. markets.
The EDA grant of $1.4 million required a $75,000 match from the tenant. One portion of the EDA grant was used for building upgrades and the other portion used for equipment purchases, including an exhaust ventilation system. The grant was a partnership between the county and the city.
In summer 2014 the company was the beneficiary of a Community Development Block Grant (CDBG) Workforce Development Grant applied for by the City of Eastport. The $100,000 grant was used to fund a portion of Millennium's employee training during a six‑month period. Millennium projected a six‑month total salary and benefits cost of $264,506, of which it planned to bankroll $164,506. The application detailed employee costs for a six-month period: eight employees trained in fiberglass, laminating, gel coating and grinding at a cost per person of $18,470; one in custom construction and detailing at a cost of $23,088; one in all aspects of construction and management at $44,400; one in all aspects of fiberglass and gel coating at $24,627; and one in all aspects of boat assembly and quality control at $24,627. A second grant of $100,000 was successfully applied for and drawn‑down for the same employee training purposes. The terms of the EDA and the two CDBG grants were met, and the grants were closed out in June 2015.
However, all was not smooth sailing, with Millennium Marine USA bringing a lawsuit against the city in 2016. The city filed a counterclaim, and the city and county filed a joint counterclaim.
As reported in the January 13, 2017, Quoddy Tides, the city's counterclaim sought over $83,000 from Millennium and Guimond. The city claimed that Millennium owed $43,200 in overdue rent, $6,000 in needed repairs to the building, an estimated $30,000 for the removal of hazardous materials left in the building and nearly $4,000 in unpaid personal property taxes. The city also was seeking its attorney's fees. City attorney Dennis Mahar did not respond to a request for an update on the status of the city's lawsuit when the settlement agreement came to light in early November.
The city and county counterclaim denied many of the charges in Millennium's suit and included numerous defenses, including that any damages suffered by Millennium were the result of the company's negligence and that Millennium Marine USA was "administratively dissolved" prior to the filing of the lawsuit.
Millennium was seeking $226,662 in damages and claimed to have suffered losses of $430,000 because of defaults by the city and county, including business interruption and lost sales caused by delays in repairs following a fire in the building.