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Newton Falls Fine Paper equipment on the auction block

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NEWTON FALLS — An auction date for sale of equipment at Newton Falls Fine Paper has been set, but a company representative said hope remains to sell the mill intact.

“I have a positive outlook we can find someone. There seems to be interest from more than one source,” said Robert G. Patzelt, vice president of corporate development for Scotia Investments, Halifax, Nova Scotia, the parent company of the Newton Falls plant. “We’ve only just set an auction date.”

If the mill, which shut down in 2010, is not sold as operational, its equipment is scheduled for auction at 11 a.m. March 21 in Syracuse. The sale listing includes two paper machines, along with various pieces of equipment and inventory. The real estate, including the 15-acre manufacturing site, and about 4,000 acres of land, is being offered by private negotiation.

Mr. Patzelt said the future of the plant’s manufacturing facilities remains unknown.

“I can’t speculate on that,” he said. “It all depends on what happens with the parties we’re dealing with.”

The St. Lawrence County Industrial Development Agency is trying diligently to keep the mill as a potential employer, Executive Director Patrick J. Kelly said.

“The IDA is very aware of the status of the facility and is working to find a way for the mill to remain intact and utilized as a job-creating asset,” he said. “We think it has a higher value intact as an operating mill. We are concerned an auction could lead to a host of negative impacts on the community. That is an end the IDA does not want to see.”

Chief among those would be the jobs that evaporated when the mill shut down because of sluggish sales brought on by a recession and market changes, putting more than 100 employees out of work. Company officials were confident a restart plan with a partner and a different product line would be the ticket to a reopening, but instead, the company decided it wanted to sell the mill outright.

“We’ve spent the last two years working on that,” Mr. Patzelt said. “We’ve been very patient.”

Mothballing the plant permanently could mean some problems are unresolved, Clifton-Fine Economic Development Corp. President Christopher L. Westbrook said.

“The big fear before was what about the liabilities on the site?” he said. “There’s got to be some environmental issues.”

Mr. Patzelt said that the company was aware there would be costs related to shutting the mill down but that he did not expect major problems.

“It was a paper mill, not pulp. It’s been run very well,” he said. “It’s in great shape.”

A state Department of Environmental Conservation spokesman did not return a call for comment. However, minimum department requirements in 2001 when the plant was being considered for permanent closure included cleaning the wastewater treatment system lagoons and returning them to a natural state, such as a field. DEC also would require that any bulk petroleum or chemical storage tanks be emptied, cleaned and removed and it would mandate the closure and remediation of any remaining sand gravel mines.

Mr. Westbrook said the effect on the community will be harsh if the plant is stripped out.

“It’ll be very bad, and I don’t think you could sell it as anything other than a paper mill,” he said.

The IDA is doing what it can to find a buyer as it has assisted the plant financially in recent years.

When Scotia Investments purchased the plant, the IDA issued a $10 million bond, which has been paid off, and $750,000 in loans, which also have been paid, Mr. Kelly said.

The IDA is working with the state on a $9.9 million grant to rehabilitate the 46-mile railroad that spans Jefferson, Lewis and St. Lawrence counties. The mill was to be one of the end-of-the-line customers.

“The mill is obviously a key potential user. It’s designed to serve more than just the mill,” Mr. Kelly said. “We are looking at a first phase of the work this spring. That will include environmental assessments, clearing and inspection of the line.”

The rail link is important in the overall future of the Jones & Laughlin Steel Co. site, Mr. Kelly said.

It also could expand the business of Benson Mines, which has identified markets to the west and south for its granite. Trucking the rock out is not a competitive form of transportation, company spokesman Stuart M. Carlisle said.

“The line from Star Lake to Carthage is crucial to us,” he said. “We are very dependent on that line.”

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