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Management Side
Park Falls, Wisc. to loan $1 million to reopen mill
PARK FALLS, Wisc. (From news reports) -- The City of Park Falls is planning to loan $1 million to resume operations at the Park Falls mill.

Members of the Common Council, after deliberating in closed session on Monday, voted to authorize staff and consultants to work towards bringing a bridge loan agreement between the city and Park Falls Development, LLC -- the company now listed as owning the mill.

The loan is intended to meet immediate business needs until the company can secure long-term financing, according to Mayor Michael Bablick, who expects the mill will obtain a long-term deal in the next three months.

In a statement released Tuesday, Bablick said that clients of the mill that purchase a valuable byproduct have indicated that if financing to restart is not obtained within a few weeks, they may exit the marketplace for that product entirely -- a move that would "seriously jeopardize the prospects of the mill ever reopening," according to Bablick.

As part of the working agreement, the city will address a major gap in its water and sewer fund. The proposed agreement requires the mill be billed for a minimum water usage, which is currently costing city taxpayers $200,000 to $250,000 each year without the mill operating, according to projections by the city.

Without the mill reopening, taxpayers are looking at a water rate increase between 25-50% in the next two years, according to Bablick.

The city's water utility was greatly expanded by drilling additional wells in 2007 to meet the water usage needs of the mill at that time and also address fire protection in the city. In order to cover payments still occurring on that infrastructure, Bablick estimated the mill needs to use about 100 million gallons of water annually.

"Basically the city had to decide -- are we going to risk losing this company, or do we partner with [the mill], come up with a short-term financing goal, come up with all the protections we need to feel comfortable being paid back, and start this thing now, or do we roll the dice and look back at this and say 'boy we should have done something,'" Bablick said. "My calculus has changed a lot where I think it's riskier to do nothing."

Bablick said the city will borrow funds from Forward Bank, and once the mill secures longterm financing the city's financial obligations tied to the loan will be removed.

A final draft of the agreement will go before the full council for deliberations and approval, likely in a special meeting to be scheduled at a later date.

Bablick said the meeting will also include a public hearing and be held at the Park Falls Public Library with the option to appear in person or comment by phone.

A representative of the company on Tuesday said a statement would be released soon.

The mill has been idle since November when Niagra Worldwide purchased the property and assets at scrap prices for $2.2 million after Flambeau River Papers put the mill into a receivership saga that lasted over six months.

Since that time it has been widely believed the company would restart operations at the pulp mill, which produces pulp for the papermaking process, as well as wet lap and a valuable liquor byproduct.

This week Bablick said that while financing negotiations have continued since the sale closed, the urgency to restart has recently increased greatly.

"After seven long months, it appears a pat forward has finally emerged to restart the pulp mill, bring a number of employees back, and to resume paper production shortly thereafter," said Bablick.

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