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Local Leaders Call On Evers To Sign ‘Mill Bill’ That Could Help Reopen Shuttered Paper Mills

Funding Source In Dispute For $65M In Loans To Timber Cooperative

evening sun shines on the beige walls and red and white striped smoke stacks of the verso paper mill
Verso paper mill in Wisconsin Rapids stopped production at the mill at the end of July 2020. Angela Major/WPR

The mayors of Wisconsin Rapids and Park Falls are calling on Gov. Tony Evers to sign a bill that would give millions in loans to a Wisconsin-based effort to reopen two closed paper mills.

The “mill bill” would provide for $65 million in loans to a new cooperative of timber professionals that wants to buy and operate mills in the two cities. It’s an ambitious plan to reassert local control over an industry that has been subject to the whims of hedge funds, international trade disputes and long-term declines in some products.

The bill would allow the Wisconsin Economic Development Corp. to give the newly formed Great Lakes Timber Cooperative $50 million in loans toward the purchase of the Verso paper mill in Wisconsin Rapids, which has been idle since last summer. Another $15 million in loans would go to a smaller mill in Park Falls that closed again in May after reopening under new ownership in September 2020.

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Wisconsin Rapids Mayor Shane Blaser said the cooperative could bring hundreds of laid-off workers back to the sprawling Verso site, which has long been the city’s largest employer. About 900 workers lost their jobs when the mill shut down in 2020.

“This is the chance for our mill to rise,” Blaser said. “They’re not talking about operating the mill the same way it has been operated. … This gives them the opportunity to be something else.”

The Verso mill was a massive buyer of timber, accounting for about 25 percent of all wood cut in Wisconsin each year. Its closure has been a blow to the state’s timber industry, and the cooperative is intended to help stabilize that market and help it grow in the future. But it’s a project that requires significant startup investment.

“They’re just not in a position to dole out whatever the mill is going to cost, however many hundreds of millions” to retool, Blaser said, and prepare the mill to produce new, more in-demand products than the glossy magazine paper it had been producing. “They just can’t do it on their own.”

Evers proposed his own plan to get loans to the cooperative in the hope of restarting mill production. Under the governor’s plan, the funding would have come from the $1 billion boost in federal funding the state would have gained if it had expanded Medicaid eligibility.

But Republicans in the Legislature refused to enact that policy, which means the state won’t get those funds. Instead, the GOP-authored bill that passed on June 30 would pay for the loans out of federal pandemic relief funding in the American Rescue Plan Act. The Evers administration reportedly has concerns that it won’t be legal to use that funding for these loans.

Park Falls Mayor Michael Bablick said he takes those concerns seriously, and even understands Evers’ hesitancy. But he’s not convinced that the law would actually forbid this spending. Written into legal guidelines from the U.S. Treasury Department is a rule suggesting that funding should go to industries acutely affected by the COVID-19 pandemic “as opposed to longer-term economic or industrial trends unrelated to the pandemic.”

That could describe the paper industry broadly, where certain products such as printer paper have been in long-term decline. But there’s no question, Bablick said, that both mills in Wisconsin Rapids and Park Falls were acutely affected by the drop-off in demand that was a direct result of the pandemic.

“They are both shut down because of the pandemic,” Bablick said.

Evers’ office didn’t respond to an inquiry Wednesday about his plans to sign or veto the bill. At a public event last week, he said his office needed to review its language, but added that “obviously I’m interested in making sure we have those high-paying jobs and those industries doing whatever they can to make sure that those mills are operational.”

One of the lawmakers who authored the bill, state Rep. Scott Krug, R-Rome, posted a photo on Twitter last week of Evers appearing with President Joe Biden during Biden’s visit to southwestern Wisconsin.

“If Gov. Evers isn’t certain” whether the federal funds can be used for these loans, Krug wrote, “I think he knows someone who can help.”

Even if the loans go through, there’s no guarantee that the cooperative will be able to purchase the mills. In the fall, Verso said it had “paused” efforts to sell the mill, and it’s possible it would seek to block an initiative that could raise pulpwood prices for its remaining mills in Michigan’s Upper Peninsula.

But supporters of the bill, which include labor unions and the Wisconsin Paper Council, see its passage into law as a necessary first step toward reopening them. Bablick said it’s up to the governor to make sure that is possible.

“It’s time to move,” Bablick said. “Either this thing … is done, or it’s moving ahead. We’ve got to be out of this limbo.”

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