VOL. 111 | NO. 13 | Tuesday, January 21, 1997
1-21-97 Willamette IDBap.gs
Paper companys $4.1 million expansion would create 26 jobs
By GABRIELLE C.L. SONGE
The Daily News
Willamette Industries, a Fortune 500 company with operations in 21 states, including Arkansas and Tennessee, has expansion plans for its Memphis corrugation operation.
Willamette management proposes purchasing the former Del Monte facility located on approximately 12 acres in Southeast Shelby County for its expansion. The project calls for an estimated $4.1 million in capital investment including real and personal property.
The relocation of the corrugation plant to Hickory Hill would create 26 new manufacturing positions with an annual payroll of about $500,000, according to the companys application for tax relief with the Memphis and Shelby County Industrial Development Board.
The board will review Willamette Industries application for a full five-year real and personal property tax freeze associated with the proposed expansion on Wednesday.
The tax freeze is a local incentive offered to businesses through the payment-in-lieu-of-taxes (PILOT) program. The board evaluates each business application using a matrix prepared by the office of planning and development (OPD).
Currently, Willamette Industries conducts business at two sites in Shelby County: a business forms plant on Rex Road and a corrugated container plant on Burbank Road.
The combined Memphis operation supports a $1.5 million payroll for 43 workers, according to information provided by general manager Jim Bomar in correspondence with city and county planners.
When contacted by the Daily News, Bomar declined to comment on the firms application.
The company also is planning a new facility for its cut sheet division which would employ 30 to 35 people and expend about $24 million in capital investment. The proposed new facility is not part of the current application.
Willamette Industries owns 1.8 million acres of timberland in the Northwest and South, of which 188,000 acres of hardwood are located in Tennessee.
Since its inception in 1906 as the Willamette Valley Lumber Co., the forest products firm has been based in Oregon. It was restructured as Willamette Industries Inc. in 1967 and is publicly traded on the NASDAQ.
The firm manufactures a variety of forest products including computer forms, corrugated containers, fine paper, inks, lumber, plywood, particle board, specialty printing papers and unbleached paper.
During the 3 p.m. IDB meeting, the full board will hear recommendations from the evaluation committee and review a matrix prepared by OPD staff.
In the matrix, businesses are awarded points in various categories such as job creation, the level of wages paid, the business location and capital investment. There are 100 points possible, plus a special circumstances category that carries additional points.
About one week before the application is presented to the full board, a three-member matrix evaluation committee meets with OPD staff to go over the matrix. During that meeting, the evaluation committee has the option of recommending points for special circumstances.
If the firm is a Fortune 500 company or a target industry, then it might receive special circumstances points.
Don Brown, who chairs the evaluation committee, said, "The purpose of the matrix is to be objective."
Prior to the implementation of a matrix evaluation, he said, the process was far more subjective.
"They were just sort of flying by the seat of their pants," Brown said. "When we decided we wanted everyone to have the same measurement, thats when we became objective."
The terms of the tax freeze, such as a three-, five- or seven-year tax freeze are then tied to total points in a companys matrix.
The IDB members have the prerogative of disagreeing with the committees recommendations. But it is the board that makes the final determination on the PILOT application.
"The board has to vote and make a judgment call on No. 1, the recommendation that the committee has made and No. 2, on any motions made by another board member," Brown said.