Wiscasset is in the running for a Molnlycke Health Care expansion that could add 10 to 30 jobs and nearly double the size of the local plant, company officials said.

Taxes the expansion yields would help pay off the $937,500 bond the town took out to fund the infrastructure for the industrial park off Ferry Road, Town Manager Laurie Smith said.

No new bond would be needed; a financing plan giving Molnlycke some of the property taxes from the expansion would help defray the company's costs, Smith said. The plan, known as tax increment financing, would need OK’s from the state and from Wiscasset voters.

Molnlycke has also approached Brunswick, where the company just built a plant at the site of the former Brunswick Naval Air Station. Talks have begun with town officials there, but not yet with the town council, said James Detert, Molnlycke’s business development director for the Americas.

The expansion could wind up in either town – or neither – but not both, Detert said.

The board of the Gothenburg, Sweden-based, global company will make the call on the project, Detert said.

Expanding would bring another Molnlycke brand to town

Brennen Medical, a St. Paul, Minnesota-based company Molnlycke picked up in 2012, would use the new space.

Brennen uses pig skin in a product that helps burns heal, Molnlycke officials said.

The expansion would also mean more room for research work and possibly more foam production, Detert said.

A little history...

Rynel started in East Boothbay in 1973, later moving to Boothbay and then to Wiscasset in 2005. It became part of Molnlycke in a friendly acquisition in 2010, Molnlycke officials said. Molnlycke's Rynel plant in Wiscasset employs about 70 people, about 1 percent of Molnlycke's workforce worldwide.

The Rynel plant makes foam that goes into the kind of acute wound care dressings hospitals use. The Veterans Administration medical center in Togus uses Molnlycke dressings, company officials said.

Wiscasset or Brunswick, pros and cons

The Wiscasset and Brunswick options for expansion each have pieces that could slow or speed up a project. One factor is the way each creates or changes a Tax Increment Financing (TIF) district: In Wiscasset, voters would need to give the nod; in Brunswick, the town council has the say.

“In Wiscasset, you have to educate hundreds and hundreds of people (about the proposal),” Smith said. “In Brunswick, you have to educate nine.”

Advantage, Wiscasset on the planning board front, however. Years ago, the planning board approved the plant at the industrial park for up to 100,000 square feet, Wiscasset officials said. The current building stands at 40,000 square feet and the possible 32,000-square-foot add-on would bring that to 72,000 square feet, well within what's already been approved, Wiscasset officials said.

Molnlycke does not have planning board approval for a Brunswick expansion, which would be a second building across Admiral Fitch Avenue from the one just built, Detert said.

If Molnlycke expands in Wiscasset, the company may try to buy the property, Detert said.

If Molnlycke buys the Wiscasset property from Ferry Road Development, the existing TIF deal with the town would then need revising to reflect the change in the parties involved, Smith said.

An expansion in Wiscasset might involve either a new TIF deal or changes to the existing one, Smith said.

What's in it for Wiscasset?

The projected 10 to 30 new jobs in both production and research would come in the first three to five years following the expansion. Molnlyke has good pay,at or above the market for the positions, good benefits and low employee turnover, Detert said.

Detert didn't rule out more jobs at some point, but he preferred to keep his estimates conservative, he said.

A Wiscasset addition would cost Molnlycke a projected $6 million to $7 million; Whenever the TIF district's life runs out, the property taxes it yields would start helping to pay the town budget. (The TIF's length is one of the points that would need to be negotiated, Smith said.)

As long as the TIF is in place, the state would leave out the added property valuation when crunching the revenue sharing and education aid numbers for Wiscasset. Sheltering the valuation keeps it from shrinking the state funds Wiscasset has coming, according to Smith and Town Planner Misty Parker.

The new valuation from the expansion wouldn't factor into Wiscasset’s county tax to make that go up, either, Parker said.

As soon as people are hired into the new jobs the expansion creates, the money they make could filter into the local economy, Smith said.

In another plus Smith cited, Wiscasset schools have plenty of room for any students from the new job-holders' families. The higher the student count, the more education dollars the town stands to gain from the state, she said.

Landlord's tax woes may be moot

Molnlycke's landlord in Wiscasset, Ferry Road Development, has unpaid taxes on other properties in town. However, its taxes are up-to-date on all its properties in a pair of TIFs, including the parcel it leases to Molnlycke, Smith said.

Smith said the town's tax issues with Ferry Road Development on the other properties are no cause for concern regarding a Molnlycke expansion. The taxes there are paid up and the TIF's obligations are being met, she said.

“Molnlycke has been paying the taxes all along,” Detert said. “We’ve always paid on time.”

Initial reaction

Wiscasst selectmen had high praise July 30 for both Molnlycke and the prospect of an expansion.

“I think it’s a terrific opportunity for Wiscasset and if we don't take advantage of it, we’d be very foolish," Selectman Pam Dunnng said. Fellow board member Tim Merry called it a win-win.

Selectmen’s Chairman Ed Polewarczyk said he was excited, too; but he asked Molnlycke officials to address concerns he predicted residents would have about the town's issues with Ferry Road Development.

Buying the building or getting someone else to buy it from Ferry Road Development would remove that as an issue, Detert said.

Selectmen authorized Smith to get drafting a possible tax increment financing deal, and a letter for Molnlycke showing the board's support, contingent on voter approval. The board plans to take up both at its August 13 meeting, and possibly also  schedule a town meeting to vote on an agreement.

Molnlycke’s board is expected to decide about an expansion in mid-September, Detert said.”We are under the gun,"’he said, adding that the company is not trying to pit Brunswick and Wiscasset against each other.

The plan would be to complete the expansion by August 2014. "That's fairly ambitious...We're going to have to hit it hard to make our timeframe," he continued. “You’re not going to see a lot of dilly–dallying.”

Susan Johns can be reached at 207-844-4633 or susanjohns@wiscassetnewspaper.com