Trescott-based seafood pie company folds

Despite the hard work of many people, including a number of experts, as well as infusions of grant funds and loans, the Cobscook Bay Co. of Trescott has closed. The company was launched in 2010 with the Maine Fresh brand of seafood pies as the brainchild of Cobscook Community Learning Center (CCLC) Executive Director Alan Furth and others. It was envisioned as a way for a nonprofit to use its connections and 501c3 status to help develop a for-profit business that would utilize local resources, support local job creation, and eventually help support the nonprofit's social mission through a profit-sharing mechanism.
The news was made public at the Washington County commissioners' meeting on November 13, when the county's Unorganized Territories tax increment financing (TIF) report was given. It was announced that the company was closing and that a joint loan-mitigation strategy had to be coordinated between Sunrise County Economic Council (SCEC), the manager of the TIF program, the Cobscook Bay Co., Coastal Enterprises Inc. and others. The SCEC assistant executive director told the commissioners, "It ceased operations. It looks like the closure is permanent."
Furth, as the Cobscook Bay Co. board president, confirmed the closure on November 20 during an interview. "Cobscook Bay Co. is folding," he says. "Our team has committed to staying on through this process." He adds, "We tried really hard, but it was the wrong balance and equation." However, he is hopeful, stating, "The equation has a chance to continue." It will all depend on the complex negotiations taking place with lenders and stakeholders as the company's business is wrapped up. So far, Furth says, "Talking with lenders feels like an incredibly cooperative, respectful process."
It was a failure, he calmly declares, and notes that while it is "an end" it is not "the end" of his efforts to build on the mission of sustainable marine economies within local communities. In the 36 years that he's worked in the region, he says that he has never been more hopeful about what the future could hold.
Originally the Cobscook Bay Co. was formed as a for-profit partnership between the CCLC's secondary limited liability corporation, Periwinkle LLC, and Phinney Enterprises, owned by local businessman John Phinney. However, over time the mix of stakeholders changed.
About 10 jobs were created at the seafood manufacturing center in Trescott, more than meeting the requirements of a Community Development Block Grant (CDBG) of $120,000 for job creation, says Washington County Council of Governments Executive Director Judy East, who oversees much of the CDBG application process in the county.
East explains that there are no CDBG requirements that still have to be met by the Cobscook Bay Co. "Once you hire the number of employees that the grant amount requires -- one for every $30,000 in grant money -- you have met the terms of the grant. There is no requirement to stay in business." She says that Department of Economic and Community Development (DECD) auditors review all business development proposals before funds are granted. They look at two to three years of past income and cash flow projections for two to three years out, and they expect that the business will be viable. "But there are no strings attached that say you must stay in business," East says. She adds that the only repercussions for a CDBG recipient would be "if the business does not actually hire the requisite number of employees in the first two years after the grant award. Then you have to give the money back." The Cobscook Bay Co. met that requirement by 2011, she notes.
Over the four years of the company's existence, significant funds were raised through grants and loans. According to a 2010 article in MaineBiz and other sources, funders who helped the start-up off the ground include: The Great Bay Foundation with a 2009 grant of $150,000; the $120,000 CDBG; 2011 and 2012 Washington County UT TIF grants of $50,000 and $75,000, plus a UT TIF loan of $50,000; a Bar Harbor Bank & Trust loan of $160,000; as well as the involvement of Coastal Enterprises Inc. (CEI) and the Maine Manufacturing Extension Partnership. Also involved were food industry experts such as Jeffrey Johnson, founder of Pemberton's Gourmet Foods, James Beard award-winning chef Sam Hayward of Fore Street Restaurant in Portland, former Ducktrap River Fish Farms Operations Manager Dustin Batley, and Ducktrap founder Des Fitzgerald.
While CEI Senior VP of Marketing and Communications Liz Rogers says that her company cannot comment on any loan negotiations at this time, County Commissioner Chris Gardner says the Cobscook Bay Co. "has been very up front with us." He adds, "They have provided us with a debt settlement plan." Gardner explains that the UT TIF loan terms included collateral but that the company will "probably be able to have the loan repaid without collateral collection." He expects that over the coming weeks the commissioners will be working with the company, and by the December commissioners' meeting will have an idea of a timeline for repayment. "We're sad to see this happen. The local product development exemplified the goals of the TIF program."
SCEC Executive Director Charles Rudelitch adds that it is likely the TIF loan committee will work on a recommendation on the loss mitigation for the commissioners. "There are other creditors involved, so it will be a fairly complicated process involving coordination," he says. "The business was really important. It was doing what we all talk about: value-added of local resources."
In 2013, the Cobscook Bay Co. entered into majority share purchase negotiations with the New Hampshire-based company Craig's All Natural. In an interview at the time, Furth commented that Craig's was committed to keeping the company in Trescott with hopes that the facility might be used to produce some of Craig's All Natural's other seafood lines. However, in a 2013 interview with Dustin Batley, who was the CEO of Cobscook Bay Co. at the time, he noted that understanding the supply chain was a big part of the learning process when supply and demand of local seafood is a part of the equation. Purchasing $200,000 worth of scallops, and then sitting on that stockpile until pie customers were found, was not the best way to run a business. The primary goal of the purchase negotiations, he explained, was to keep the business viable and keep jobs in the county.
While the Cobscook Bay Co. is closed, Furth shares the news that the Maine Fresh brand will continue under Craig's. In addition, the social mission will continue, he says, but he could not elaborate because of the extensive ongoing negotiations. Craig's All Natural now sells the signature Maine Fresh brand of seafood pies through its wholesale branch to such upscale retailers as Whole Foods Markets and through its website.