RUMFORD – A new $5 million electricity substation will be built if the local paper company and the town agree to a land swap.

Selectmen on Thursday will review plans to give about 33 acres owned by NewPage Corp. – and routinely used by the town – to Rumford in exchange for closing Railroad Street just beyond the old Agway Building.

If the swap is completed, mill spokesman Tony Lyons said there will no longer be any land now used by the town but owned by NewPage.

“We are seeking support from the selectmen to discontinue Railroad Street and for a special town meeting that would allow the town to take the title of the properties,” he said Tuesday. “This is a great opportunity for the town.”

Selectmen Chairman Jim Rinaldo agrees.

“I think it’s a good deal for us. When I came on the board two-and-a-half years ago, the estimate to fix that road was $325,000,” Rinaldo said.

He said the town will be losing little, if any, taxes from the 33 acres now owned by the mill because the town has been using and maintaining it.

What little taxes that may be lost will more than be made up by taxes paid on the section of Railroad Street the mill wants to acquire. Additional taxes will come from construction of the electrical substation.

The properties now owned by the mill include the so-called administrative building overflow parking lot on Railroad Street next to the old Agway building, the Drug Abuse Resistance Education park, ballfields and ice skating rink located at the corner of Lincoln Avenue and Falmouth Street, the Virginia ballfield located at the corner of Route 2 and Front Street, Morency Park and the river bank along River Street, the town’s snow dump along Rumford Avenue, Veteran’s Park at the head of Congress Street, and a turnaround that will be constructed about 300 feet toward the mill from the Agway building on Railroad Street.

In return, the mill would receive about two acres from the town that comprises the remaining 1,700-foot section of Railroad Street that empties onto the Rumford-side entrance of Ridlonville Bridge. The street serves as a shortcut for many people who drive from Hartford Street to Route 108.

Lyons said the land exchange would help the mill separate its power stream from that of Brookfield Power of Gatineau, Quebec, Canada. The mill sold its power plant located atop Falls Hill just over a year ago. The two hydroelectric plants produce about 40 megawatts.

He said construction of a substation off a section of Railroad Street would also help the mill provide better security to a power site. He said since 9/11, the federal government has wanted better security for such sites.

If the exchange is approved, Lyons said a transformer station would be built on a 150-by-150-foot site off Railroad Street. The tower would be 50 to 70 feet high. Lyons said Central Maine Power eventually would take it over.

The town has used the parks, snow dump and other properties virtually lease-free for many years, some beginning as early as the 1940’s, Lyons said.

“Every time the mill makes improvements or acquires property, that ensures that they will be here longer,” Rinaldo said. “They have been very good corporate neighbors and are our biggest taxpayers.”

Rinaldo hopes selectmen will approve the land swap at Thursday’s board meeting, then set a special town meeting for residents to vote.

“The mill has always been very accommodating. The land swap is in the town’s best interest,” he said.