State aid sought to reopen Duluth paper mill

DULUTH – The potential buyer of the shuttered Verso paper mill in Duluth could bring back 80 jobs and invest $25 million in the plant — if millions in state funding come through.

ST Paper intends to buy the mill, which was idled indefinitely last summer, and convert it to making tissue paper.

"We believe we are on the threshold of moving forward with our project," Ron Thiry, chief operating officer at ST Paper, told the Duluth City Council on Monday night.

The company is seeking a $1.5 million grant from the state's Job Creation Fund and another $3 million forgivable loan from the state Legislature. The loan, if approved by lawmakers, would become available after the new owner invests $25 million or more in the mill, and it can be forgiven only if the company maintains 80 or more employees over five years.

Thiry said ST Paper "has unique experience to execute this type of project," pointing to turnarounds at mills it purchased in Wisconsin and Virginia.

"We know this facility has undergone ownership changes over the years," he said. "Tissue paper should be around for a long time."

The company was formed in 2007 and produces bath and facial tissue, paper towels and napkins in Oconto Falls, Wis., and Franklin, Va.

The mill first opened in 1987 and has been owned by Ohio-based Verso Corp. since 2015.

Verso indefinitely idled the mill last summer as demand for the graphic papers it produced — used for advertising inserts in newspapers — plummeted due to the pandemic.

The closure was made permanent in January "in response to the continued accelerated decline in printing and writing paper demand resulting from the COVID-19 pandemic," the company wrote in a federal filing. More than 200 people were laid off.

The mill is a major taxpayer and utility customer.

Duluth City Council Member Joel Sipress said getting the mill restarted will "help carry the burden of maintaining the water system for the entire city."

Noah Schuchman, chief administrative officer for Duluth, said city staff have been working on assisting a sale and conversion of the mill for more than a year, but "there's still a ways to go."

Brooks Johnson • 218-491-6496