From Deseret News archives:

State is offering tax incentives to several firms

Published: Saturday, Jan. 20, 2007 12:18 a.m. MST
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A state board offered financial incentives to a wide variety of companies on Friday: a toilet paper manufacturer, a dot-com retailer, a food redistributor and a construction castings maker.

The Governor's Office of Economic Development's largest approval was a tax rebate of up to $1.92 million over 10 years for ST Paper to build a toilet paper manufacturing facility in Washington County. The new facility could employ up to 140 people.

If the company chooses Washington County, it would get the incentive if it pays 40 percent above the county median wage. Board documents show the company is expecting to pay an average of $40,814, which is more than twice the county median of $20,300. It also would be required to keep the operations in Utah at least 10 years.

ST Paper LLC, formed in 2005, is acquiring the assets of Oconto Falls Tissue and EcoFibre, both in Wisconsin. Combined, the three have 125 employees. ST Paper has obtained financing of more than $600 million for eight more tissue and linerboard machines at four locations nationwide. In addition to the two Wisconsin sites, the company expects to build on two "green field" sites, one in the Southwest and one in the Northeast.

Board documents show that ST Paper expects to become one of the top 10 tissue producers in the U.S. and a supplier of paper to the container industry.

If Utah lands the facility, new state revenue over 10 years is expected to be nearly $14 million and new state wages would be about $6.53 million over the same period. The company's capital investment is pegged at $170 million.

St. George is expecting to have in place up to $2.5 million in property tax rebates paid during the first four years.

"This is an exceptional use of the (state tax rebate program). ... This is also ideally what St. George and Washington County are trying to do to broaden their economy," said board member Richard Nelson.

The board also approved a tax rebate of up to $1.37 million for Backcountry.com, a Park City-based retailer of outdoor gear through five Web sites. It has 430 employees in Park City and a 200,000-square-foot distribution center in West Valley City.

But the company is expecting sales to grow nearly 500 percent over the next five years and is considering Utah, the East Coast and Canada for its expansion. Board documents say the company could add 654 new full-time employees in Summit and Salt Lake counties, of which 274 would qualify for state incentives.

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