ST Paper will seek up to $1.5 million in state job-creation funds to breathe new life into Verso Corp.'s Duluth paper mill, with the full support of the Duluth City Council.
By a unanimous vote Monday night, councilors adopted a resolution backing a request to the Minnesota Department of Employment and Economic Development on behalf of ST Paper, which has been engaged in negotiations to purchase and reopen the mill for the past couple months.
If its bid proves successful, the prospective new owner of the mill proposes to invest more than $25 million to convert the plant to produce tissue, rather than the supercalendered graphic paper the mill has produced in the past. The mill closed last summer, when Verso also idled another plant in Wisconsin Rapids, citing weakened market conditions. Verso employed more than 220 people in Duluth at the time.
ST Paper anticipates a mill converted to tissue production would employ at least 80 people.
In addition to seeking a job creation grant, ST Paper also could be in line to receive a $3 million forgivable loan from the state, with provisions for that funding included in omnibus bills now before the Minnesota Legislature. The proposed loan would be forgiven so long as ST Paper followed through on its plans to convert the mill and its continued commitment to employ no fewer than 80 people at the facility for the next five years.
Ron Thiry, senior vice president and chief operating officer of ST Paper, said the jobs will pay upwards of $50,000 per year, plus full benefits
He said the company already has turned around a couple of struggling paper mills by refitting them to produce tissue paper: one facility in Oconto Falls, Wisconsin, and another in Franklin, Virginia.
"We believe we are on the threshold of moving forward with our project," Thiry said. "We know this facility has undergone considerable ownership changes over the years, and we're hoping with our project that it will no longer be at the whim of digital and technological changes, because bathroom tissue should be around for a long time."
Although he expressed optimism at the prospect of the mill conversion, Noah Schuchman, chief administrative officer for the city of Duluth, cautioned: "There's still a ways to go, and I appreciate that Mr. Thiry and representatives from ST Paper are here tonight to talk about this."
At large Councilor Arik Forsman said, "I know that we're not quite across the goal line yet. So, more to come. But this is certainly a positive step in the right direction, in my opinion."