17 August 2010

Papermaking Days Appear Over at Sappi's Muskegon Mill Site


If anyone in Muskegon was under the impression that someone would again be making paper at 2400 Lakeshore, Sappi Fine Paper North America seems to have ended those hopes.

The company says its will have a Sept. 29 auction of its papermaking machinery in Muskegon.

Sappi permanently closed its Muskegon mill in July 2009 and put the 119-acre site on Muskegon Lake up for sale with hopes of selling to a papermaker  who is not a competitor.

But, a year later, Sappi has hired LiquiTec Industries of Mequon, Wis., to sell its assets to the highest bidder at the public auction. The equipment for sale includes paper machine No. 4. Company officials said the remaining paper machine No. 5 already has been sold outside of the auction.

"It's disappointing," said Steve Keglovitz, a former Sappi worker and president of the plant's labor union, adding that former workers have been told that machine No. 5's new owner is taking it to Mexico. "I knew they were not doing anything that would keep papermaking in the plant."

As LiquiTec sells equipment in the company's wood yard, pulp mill, bleach plant, coating kitchen, finishing operation and laboratory, it seems that Sappi has not found a buyer for the entire paper mill.

Sappi spokeswoman Amy Olson said the company has no new information on the sale of its Muskegon mill. Sappi is a global papermaking company headquartered in Johannesburg, South Africa, with its North American headquarters in Boston.

Economic developers familiar with Sappi's attempts to sell its mill property say there are multiple parties interested in the company's Muskegon real estate. They indicate that the paper mill's large power plant is one of the most valued assets remaining because it can burn wood waste, a renewable fuel.

However, buyers are only interested in portions of the site, which has nearly a mile of shoreline on Muskegon Lake, the economic developers say. An environmental agreement between Sappi and any prospective buyer will be a major issue for the parties to resolve, they say.

Since closing last year, Sappi has come to a severance agreement with its former union -- United Steel Workers of America Local 1015. At the time it closed, the plant employed 190 union and salaried employees. Over the plant's 109-year history, it had employed as many as 1,200 workers.

The company also agreed to a property tax abatement settlement with the city of Muskegon. Sappi is paying local taxing units $1.25 million in back taxes and the city of Muskegon an additional $500,000 for an "economic development fund," the parties agreed in May. The company had 10 industrial tax abatements that were granted based on specific employment levels that are no longer being maintained.

"We certainly understand the need for Sappi to sell its assets within the property," Muskegon Mayor Steve Warmington said. "But the city continues to work with the company on a resolution of who will eventually purchase the land and how it will be used in the coming decades."

The community debate on what should happen with the Sappi property is ongoing.

Some believe, with 13.9 percent unemployment in Muskegon County, the site needs to continue to generate manufacturing jobs.

"We want to still create jobs out there," Keglovitz said. "We need to hold Sappi accountable for keeping the powerhouse. It could be the beginning of something new if energy companies are looking at it."

Others call for the cleanup of the century-old industrial site and redevelopment of the property into condominiums, a marina and water-based businesses.

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