Commissioners OK tax break for mill

A property tax exemption for Clearwater Paper has cleared its final hurdle.

The Nez Perce County commissioners voted unanimously Monday to approve the break for a $160 million project at the company's Lewiston site. Jay Backus, vice president for mill operations in Lewiston, was on hand for the decision on the benefit that's expected to be worth about $4.25 million over a five-year period.

It starts Jan. 1 and allows Clearwater Paper to only pay 25 percent on any new property taxes the upgrade creates for five years. At the end of that time, Clearwater Paper would pay all taxes due on the addition and would likely have an annual tax bill of $4.5 million for the entire complex.

Clearwater Paper officials have said the paperboard operations at the Lewiston-Clarkston Valley's largest employer need to be modernized to cut production costs, which are the fifth highest in North America. One of the other factories in the top five has announced it's closing.

Convincing its corporate-level executives on the necessity of improving the infrastructure in Lewiston isn't a slam dunk because Lewiston competes against Clearwater Paper sites in other parts of the country for a finite amount of capital dollars.

Hammering out the details of the tax exemption took months after Nez Perce County commissioners approved the concept back in April. In spite of what some viewed as a delay, both sides said Monday the talks were amicable and hope the agreement sets the stage for even more growth at Clearwater Paper.

County Commission Chairman Douglas Havens said the negotiations produced a final result that satisfied his concerns. The agreement, for instance, contains a provision that if Clearwater Paper closes the Lewiston plant in 2026 or earlier, it would owe Nez Perce County at least a portion of what was exempted.

If the shutdown were in 2022, the reimbursement would be 100 percent. After that, the percentage would decrease each year by 20 percent and be at zero in 2027. Events out of Clearwater Paper's control such as strikes or government regulations would release Clearwater Paper from the obligation. The agreement also specifies that the deal would transfer if the mill is sold.

What happens next depends on the Idaho Department of Environmental Quality, which is expected to issue a decision on an air quality permit in early September. Once that happens, company spokesman Matt Van Vleet said Clearwater Paper will share the project's construction schedule.

"The senior management team has to approve the project and we're waiting for the permit," Van Vleet said. "That's the final step. We're reserving (a celebration) until we have an approved permit."

In other business, the commissioners approved an agreement with Moon Security Service to provide devices to supervise people on misdemeanor probation in Nez Perce County. The devices are worn around the ankle, can detect if someone has consumed alcohol through their sweat and will alert law enforcement if that occurs. Tampering with the devices is a felony.

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Williams may be contacted at ewilliam@lmtribune.com or (208) 848-2261.