Tax breaks for mill will help save about 400 state jobs
Tax breaks for mill will help save about 400 state jobs
| CAPTION: Laura Kirby/Daily Mining Gazette A planned $5 million investment in pollution control and operation efficiency at the Smurfit-Stone Container paper mill in Ontonagon could save up to to 235 local jobs and an additional 183 jobs statewide. |
By LAURA KIRBY, DMG Writer
ONTONAGON — Up to 235 jobs in Ontonagon County could be saved by a proposed $57,000 tax break agreement between village government and the Smurfit-Stone Container paper mill by reducing operating costs and making the company more competitive, village managers said.
Proposed abatement of 50 percent on the company’s millage rate for the next 12 years would halve tax on some $710,000 in funds directed at replacing worn out equipment.
That funding comes out of $5 million in planned investments after Michigan Economic Development Corporation awarded the company a single business tax credit valued at more than $4.8 million over 10 years.
The award given in June as part of efforts to encourage Michigan’s economic growth, has spurred the company to plunge millions into its pollution control equipment.
Some $710,000 of planned investment will be directed at the plant’s stock preparation area, and under the agreement with the village, that sum would escape 50 percent of taxes for the agreed period, boosting savings made by the company.
“What this basically does is gives them tax breaks on the portion of the mill that develops new construction,” Village President Scott Roehm said.
Planned improvements will reduce operating costs and improve the company’s position in a “competitive environment” mill, manager Chris Broome has said.
Public comment on the proposal will be sought during an open hearing at 6 p.m. July 24 at the village office.
Village Manager Penny Hill showed support for the local investment.
“We have done a number of these (tax breaks) for them in the past,” she said.
The average Smurfit wage would rise by $1,057 and an additional 183 jobs would be saved throughout the rest of Michigan as a domino effect of investment, “a fantastic win,” for the Western Upper Peninsula MEDC, President James Epolito said.
In other news, the village will likely award a one-year lease for its recreation center to the local hockey association following a meeting of the recreation commission today. The committee is scheduled to make final adjustments to a one-year contract which will realize up to $10,000 in yearly savings for the village by relinquishing responsibility to the hockey and figure skating club. Overall, the village had been running at a $30,000 loss on expenses at the building each year, Manager Penny Hill said in May.
Under the contract:
• All current uses of the building will be maintained.
• Revenues up to $6,000 will go to the hockey club and profit in excess of this will be split 50/50 between the village and the club.
• The village would pay up to $15,000 in expenses for the building each year and take on major repairs.
The contract prepared by Hockey Association President Dan Farley may be “tweaked” by the recreation commission, council members agreed. The lease has been included in plans on the upcoming year’s budget. Roehm noted the lease could include a clause to allow modification if the terms fail to recoup money in the long term.
“If it’s going to save us ten thousand bucks, ten thousand bucks is a lot,” said council member Dennis Morin.
Laura Kirby can be reached at lkirby@mininggazette.com
Previous page: Eagle Harbor Township combines ordinances
Next page: Engineers present Hancock water plan