Three years after a major addition to its Wauna mill, Georgia-Pacific is pursuing the construction of two new paper machines, one of which could be built at the Clatsop County facility.
The company plans to build two through-air-dried tissue-making machines, one to serve its markets in the western United States and the other in the southeast. Wauna mill near Westport is among several of the company's manufacturing plants being considered for the western location.
But the local area may lose out unless the company receives tax breaks similar to those it received for another paper machine installed at Wauna in 2003.
Georgia-Pacific officials plan to meet with the Clatsop County commissioners at a work session Wednesday to present their plan to seek as much as 15 years worth of property tax deferments through a state economic development program.
Kristi Ward, assistant communications manager at Wauna, confirmed that the plant is among the facilities under consideration for the new machine, but said no details about the project's cost or new jobs have been released.
The new paper-making station is similar to the No. 6 machine installed at Wauna in 2003. The $200 million machine and associated converting equipment brought 110 new jobs to the plant.
The new western machine is slated for start-up next year, and the other machine in 2008. Ward said the company hopes to pick the location by the end of summer.
"These investments should be a clear indication to our customers and consumers of Georgia-Pacific's commitment to our growing consumer products business," Georgia-Pacific president and chief executive officer Joe Moeller said in a company press release.
According to Clatsop County Administrator Scott Derickson, the company has indicated it plans to apply for tax breaks for the new machine under the state's Strategic Investment Program, which offers tax deferments of up to 15 years for capital improvements of $100 million or more.
Under the state program, only $25 million of the machine's total value would be taxed for the 15-year period. But the company would also pay an annual Community Service Fee that would be divvied up among the various non-school taxing districts in which the Wauna mill is located. The fee would total $500,000 the first year and increase by 3 percent a year, Derickson said.
The local county government must approve the plan, and with the company hoping for an answer by the end of the month, the commissioners may schedule a public hearing and formal vote on the proposal for their July 19 meeting, Derickson said.
Georgia-Pacific officials have said that the Wauna mill is in the running with G-P facilities in other states with their own tax-abatement programs, and that winning tax breaks for the Wauna mill could be a crucial factor in the selection, Derickson said. "We're competing with other states that have other similar tax programs," he said.
The company is already enjoying tax relief for the construction of the No. 6 paper machine, for which it gained a five-year moratorium on property taxes. Those tax breaks come through a Columbia County enterprise zone, which was expanded specifically to take in the Wauna mill and allow it to benefit from the tax breaks for the new equipment.
County officials estimated that the company will save close to $12 million in deferred taxes over the five years. Derickson no calculations have been done on what the company's total tax savings would be for the new machine under the Strategic Investment Program if it came to Wauna.
Last September, the mill marked its 40th anniversary of operations. The plant employs 1,130 in the production of Brawny paper towels and Quilted Northern bathroom tissue and other paper products. Its $86 million payroll makes it the county's largest employer.
Georgia-Pacific still operates under its old name but the company was purchased last year by Koch Industries of Wichita, Kan.