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After mill closure announcement, questions linger over $12 million incentives paid to Pactiv Evergreen

 A sign reads Evergreen Packaging in the foreground with the paper mill in the background.
Lilly Knoepp
The paper mill in Canton is scheduled to close early this summer.

The announcement of the paper mill closure in Canton leaves residents and leaders with more questions than answers. Some state and local leaders hope to not only rebuild the economic stability of the town but also hold Pactiv Evergreen accountable for the $12 million it received in state funds as an economic incentive for job creation.

Canton Mayor Zeb Smathers said local, state and national leaders are working together to address the challenges.

“This is a group effort to figure out this Carolina crisis – not a Canton crisis – a Carolina crisis,” Smathers said.

The paper company, previously known as Blue Ridge Paper products, inked a deal with the state in 2015 that provided $12 million in economic incentive in exchange for job creation. To receive the funds, the company was required to employ a minimum of 800 full-time employees for the duration of the 10-year contract.

Under the terms of the program, called the Job Maintenance and Capital Development Fund, the company was also required to pay workers at least 140% of the average county wage in Haywood County, provide health insurance for employees, and invest at least $50 million by the end of 2019.

If the company “fails to maintain operations at the facility for the agreement term,” it must repay all grant funds, according to the contract.

In a speech to local leaders and community members this month, Governor Roy Cooper called on Pactiv Evergreen to return the money.

“Back before I was governor there was an agreement entered into that they would stay open until at least 2024. In exchange for funding from the state," Cooper said. "We want that money back. We want that money to go to this area to make sure that you recover.”

The contract is through the end of 2024.

Following the announcement of the closure, Cooper sent  a letter  to Pactiv Evergreen CEO Mike King informing the company of their obligation to repay the state incentives.

King responded on March 21 by reaffirming that the company values its relationship with North Carolina but did not mention the state- funded incentives.

“As you know, Pactiv Evergreen has had a significant presence in North Carolina for many decades. While we understand your concern about our decision to close the Canton mill, it is our desire to maintain and cultivate this partnership going forward. In addition to our Canton mill, we have seven other manufacturing and warehouse facilities across the State that employ approximately 1,200 people,” King said in the letter.

Cooper's office confirmed that conversations between the company, the governor's office and local officials have continued since March.

NC Attorney General and gubernatorial candidate Josh Stein also demanded a return of the subsidy.

In a letter dated March 16, Stein said, “As North Carolina’s chief law enforcement officer, I intend to hold Pactiv Evergreen responsible for any violations of those obligations to the fullest extent possible under the law. “

No action has been filed by his office yet, according to a spokesperson for Stein. It’s hard to say at this point how those recovered funds may be used, the spokesperson said. But the office is talking to the company and local and state leaders to find ways to benefit the people of Canton and mill employees.

Meanwhile, local leaders remain focused on the immediate needs of residents.

Kristina Proctor, a town alderwoman for Canton, said the mill closure means a loss of at least 15 percent of the town’s budget, due in large part to lost tax revenue. The town has taken a tiered approach to the closure, she said.

"We at first wanted to do triage address the people losing their jobs...the economic impact and what that looks like locally for the families that are tragically losing their jobs," she said.

After addressing job recovery, the town needs a plan for its wastewater treatment plant, she said. At present, the mill operates Canton’s wastewater. The company previously agreed to operate the wastewater treatment plant for two years after the mill closes, according tothe DEQ website.

"We knew eventually we would need a bigger wastewater treatment, not just for the town of Canton, but also for Clyde and working with other municipalities in the county on that," Proctor said.

Local leaders also have to address environmental clean up concerns. The Canton mill is not classified as a superfund site.

Proctor said there are unanswered questions about what parts of the mill are going to be dismantled, and "who's going to be an accountability partner locally on the state and federal level."

The town will continue to diversify its economy as the local economic landscape changes, she said.

A satellite Pactiv Evergreen facility in Waynesville mill employs a few hundred people. The facility is expected to downsize but Waynesville Mayor Gary Caldwell said during Governor Cooper's visit that the reduction is not his biggest concern which he said was "that the railroad will still come and take care of their customers."

Giles Chemical, one of the biggest employers in Haywood County, and the Waynesville facility currently uses the same railroad as the papermill.

“But we're hoping that they will come still and, and take care of those folks,” said Caldwell.

As local leaders continue to work to mitigate the damage, the clock is ticking towards the June closure.

“The reality of it is that there is not a guardian angel coming down from the heavens and going to buy that paper mill. It's closing in June,” Proctor said.

Lilly Knoepp is Senior Regional Reporter for Blue Ridge Public Radio. She has served as BPR’s first fulltime reporter covering Western North Carolina since 2018. She is from Franklin, NC. She returns to WNC after serving as the assistant editor of Women@Forbes and digital producer of the Forbes podcast network. She holds a master’s degree in international journalism from the City University of New York and earned a double major from UNC-Chapel Hill in religious studies and political science.
Laura Lee began her journalism career as a producer and booker at NPR. She returned to her native North Carolina to manage The State of Things, a live daily statewide show on WUNC. After working as a managing editor of an education journalism start-up, she became a writer and editor at a national education publication, Edutopia. She then served as the news editor at Carolina Public Press, a statewide investigative newsroom. In 2022, she worked to build collaborative coverage of elections administration and democracy in North Carolina.

Laura received her master’s in journalism from the University of Maryland and her bachelor’s degree in political science and J.D. from the University of North Carolina at Chapel Hill.