Stimson may donate closed Libby plywood plant for use as an industrial park

Stimson Lumber Co. is close to donating its former plywood facility and
the 400-plus acres of the Libby mill to the Lincoln County Port Authority for use as
an industrial park.

By ROGER MORRIS

Special to the Inter Lake

The donation is part of ongoing negotiations between the executive board of the
Healthy Communities Initiative and Stimson, said Dan Larson, who has been
spearheading the purchase of the former mill.

Key issues remaining are the boiler and the environmental condition of the mill
site, Larson said.

Larson and Andrew Miller, chief operating officer for Stimson, have been
negotiating either a purchase or lease of the boiler.

“The boiler is a significant issue to be resolved,” Larson said.

Miller is waiting to hear more about how a lease proposal would work.

Both sides are working toward a May 1 deadline.

“Stimson has been very agreeable to work with,” Larson said. “They have been
most cooperative and worked hard to help us accomplish this.”

Miller first told Larson of Stimson’s offer in an April 14 letter. “Stimson is prepared
to enter into negotiations to donate the Libby plywood facility and land to a port
authority, for use as an industrial park,” Miller wrote.

“At this time, Stimson will be engaging various parties to evaluate the condition
and value of plywood manufacturing equipment to be removed from the plant,”
Miller continued. “Stimson is proceeding on the assumption that the port authority
will want to take over a clean ‘warehouse’ with intact infrastructure.”

Larson said Healthy Communities has hired its own appraiser to evaluate the
equipment.

By donating the plant and land, Stimson stands to realize considerable tax
benefits. According to the Lincoln County Clerk and Recorder’s Office, Stimson
listed the boiler’s value as $8.5 million in 1995.

After the boiler, which was installed following a 1992 sawmill fire, the
environmental condition of the site is considered a potential deal breaker.

The Portland-based Stimson is completing remediation of known environmental
items such as storage tanks, asbestos from old dry kilns and general plant site
cleanup, Miller said.

“Stimson’s intention is to turn over a clean building and the plant site in its present
condition,” Miller said.

Stimson closed the Libby mill last year due to a tight timber supply and an influx of
lower-priced plywood imports.

Asbestos issues did not play a role in the company’s decision to close the mill, but
the firm was facing added expenses for workers compensation because of claims
against the company. Workers diagnosed with asbestosis claimed they were
exposed to asbestos-tainted vermiculite insulation while working at the mill.

In December 2002, the Environmental Protection Agency released a report saying
there were no immediate threats at the Stimson mill site that required immediate
cleanup.

If negotiations to acquire the mill are successful, Larson and the Healthy
Communities board hope to resurrect the plywood operation sometime this fall.

A feasibility study by the Beck Group indicates a scaled-down mill using timber
from a variety of out-of-the-area sources could be profitable.

But it would probably only provide 75-125 jobs at lower wages than those paid to
the 300 workers who lost jobs when Stimson closed the plant Dec. 31, 2002.

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