BRATTLEBORO—One of the last major paper mills in the region is starting the new year under new ownership, saving more than 100 jobs in the process.
On Dec. 31, Long Falls Paperboard (LFP), an investment group based in Starbuck, Wash., purchased the business and assumed operations of the Neenah Paper manufacturing plant at 161 Wellington Rd.
The purchase price for the business was $5 million, according to Neenah’s Jan. 2 filing with the U.S. Securities and Exchange Commission (SEC).
On Oct. 25, the Georgia-based company, which has owned and operated the plant since its acquisition of Fibermark in 2015, announced that it would shut down the plant, attributing the decision to “manufacturing inefficiencies” and the changing nature of the office supply marketplace, according to a quarterly report to investors.
Two months later, leaders of the Brattleboro Development Credit Corporation (BDCC) say that with support from numerous local, regional, and statewide partners, a complex deal has enabled Neenah sell the plant to LFP.
On Dec. 21, BDCC acquired the 163,367-square-foot building and its almost 40 acres of land — valued by town listers at $5.19 million, according to the 2018 Grand List — for $1 million.
According to listers’ records, the two-story plant was constructed in 1975.
The deal is financed by a complex array of government agencies, economic development entities, and People’s United Bank. The Vermont Economic Development Authority, a quasi-public entity created by the state Legislature, has fronted $500,000 with that loan backed by the property.
BDCC Executive Director Adam Grinold told The Commons on Tuesday that the economic development nonprofit will work with Vermont’s Department of Environmental Conservation (DEC) to facilitate a brownfields assessment of the site, long used for industry.
A meeting to share information with the public about a grant application to the federal Environmental Protection Agency for brownfields cleanup has been set for Tuesday, Jan. 15, at 5:30 p.m. at the BDCC’s headquarters at 76 Cotton Mill Hill.
The timeline “is dependent on ongoing assessment,” he wrote in an email. “We will work with VTDEC to develop scope and timeline.”
LFP says that once BDCC obtains a certificate of completion from the DEC, it plans to purchase the property. The company has signed a 66-month lease with BDCC.
According to information about the company’s quarterly earnings filed with the SEC, Neenah had been “in active negotiations with a potential purchaser of the Brattleboro mill and its business operations.”
Subsequently, the potential buyer reduced the value of the original offer during the negotiations, and on Oct. 19, Neenah’s Board of Directors authorized the CEO to close the Brattleboro mill.
“While not precluding additional purchase offers for this business, the Company expects to cease mill operations by year-end and subsequently pursue the sale of the mill assets (land, building, etc.) to potential buyers,” the quarterly report said.
After BDCC learned about Neenah’s sudden decision to cease operations in Brattleboro, it immediately met with Neenah Paper representatives to assess options to support ongoing operations.
According to Neenah representatives, the only alternative to the planned shutdown would be a successful sale, fully executed prior to Jan. 1, 2019.
Absent a buyer, the company’s board of directors voted Oct. 19 to proceed with closure of the Brattleboro facility and liquidation of its local assets.
Enter Long Falls Paperboard — very late in the game.
“LFP did not know about, or see the property until Oct. 31 of this year,” Grinold told The Commons.
After the initial burst of news coverage about the Brattleboro closure announcement, several interested parties immediately contacted Neenah Paper.
LFP, which incorporated as a limited liability company in May of last year in Washington, had recently been unsuccessful in a bid to acquire a paperboard mill in West Carthage, N.Y., according to BDCC.
But there, the United Steelworkers Union (USW), which represented workers in the West Carthage plant, recommended to principals that they explore an acquisition of the Neenah mill, which the USW also represented.
The BDCC helped connect Neenah Paper management and representatives of LFP and “within a few short days, an acquisition plan and team was formed,” said Grinold, BDCC’s executive director, in the news release.
“The BDCC has built the capacity for this kind of rapid response and management of complex, impactful development projects,” Grinold added.
BDCC and LFP created a public-private partnership to support the acquisition in under 60 days, a timetable driven by the potential loss of 100 jobs, the largest single loss of jobs in Windham County since the closure of the Vermont Yankee nuclear power plant in 2014.
The proposal got approval from the Vermont Economic Progress Council on Dec. 14 for a Vermont Employment Growth Incentive, which will provide approximately $1.15 million paid out over the next five years, “allowing LFP the ability to maintain and grow employment in Brattleboro as it invests in the facility and business growth,” according to BDCC.
“This transaction is a huge win for the region,” said BDCC Board President Bob Stevens.
“Since our first visit to the mill in November we have been welcomed and supported by BDCC, the employees, the USW, and a wide variety of state offices,” said Ben Rankin, one of the LFP partners.
Rankin, a principal of Columbia Opsco, a business consultancy, “has launched or restructured 10 businesses, secured over $100 million in financings for projects of which he was owner/co-owner, and led teams of up to 50 people,” according to the firm’s website.
Rankin holds an M.B.A. from the University of Washington and a bachelor’s degree from Reed College.
“He specializes in preparing projects for financing and then connecting them with capital sources,” the website added. “In manufacturing, he focuses on energy recovery and materials recycling. In property development, he emphasizes preservation and community-building.”
“We deeply appreciate this support,” Rankin added, “without which we would never have been able to purchase the paper mill in the very short time available. We look forward to being part of the Brattleboro community for many years to come.”
While the availability of the environmental cleanup and support was critical to LFP’s decision to proceed with the purchase, they also needed assistance in obtaining debt for the project as well as incentives and operational support.
BDCC acknowledged the contributions of the Vermont Economic Progress Council as manager of the Vermont Employment Growth Incentive (VEGI), Green Mountain Power’s (GMP) Economic Development Incentive Program, and Efficiency Vermont.
Also assisting is the Vermont Agency of Commerce and Community Development and its Vermont Training Program, the Windham County Economic Development Program, and the Vermont Department of Environmental Conservation (DEC).
Financing was provided by the Vermont Economic Development Authority (VEDA) and People’s United Bank.
Additional financial assistance from the Vermont Department of Environmental Conservation (DEC) and the Town of Brattleboro Brownfields Cleanup Fund will help BDCC and DEC install monitoring wells and additional brownfields clean-up.