PORT EDWARDS, Wisconsin (From the Wisconsin Rapids Tribune) -- Domtar Corp. was not overtaxed after its Port Edwards paper mill shut down in 2008, a state appeals court ruled this week, marking another loss for the company as it challenges more than $1 million in property taxes.

The decision is important, in part, because had it cut the other way, the company would have been entitled to a refund of hundreds of thousands of dollars from the very region that was economically devastated by the mill's shuttering.

A three-judge panel on Wisconsin's District 4 Court of Appeals on Thursday held that the state properly assessed the value of the former Port Edwards mill site between 2009 and 2011 at nearly $15 million for each year, even though Domtar contended it was worth only $2.3 million.

Tax officials concluded that even though the mill had closed and that some equipment was moved out, it was still marketable as an operable pulp and paper mill. Domtar, on the other hand, asserted that the best use of the property was merely for potential redevelopment.

The decision likely prompted a sigh of relief among government officials in and around Port Edwards. Domtar paid more than $378,000 in property taxes in 2009, and more than $400,000 in property taxes in 2010 and 2011, records show. The village, school district, Wood County and other taxing jurisdictions would have had to pay back a substantial share of that money had the court ruled in favor of Domtar, according to a state Department of Revenue spokeswoman.

The appeals court's decision affirms a lower court ruling and a review by the Wisconsin Tax Appeals Commission, all of which have upheld the higher property value.

Domtar could seek review by the Wisconsin Supreme Court, which does not have to accept the case.

The company shut down the mill citing eroding demand for its products and increasing costs; it claimed in court documents that the mill, which dates back to the 1800s, was "functionally obsolete" and generated a $10 million loss in 2007, the year before it closed.

More than 500 workers lost their jobs as a result of the closure.

The site is now in the process of being demolished and is slated for redevelopment, according to Port Edwards Village Administrator Rick Peitte, who said his hope is to bring new employers to the property.

"We have moved on," Peitte said.