Clarke County seeks refund after layoffs

Published 9:58 pm Tuesday, December 16, 2008

A south Alabama county wants Louisiana-Pacific Corp. to pay as much as $900,000 to amend an economic incentives package because it laid off nearly 140 employees at a new mill amid the economic downturn.

Local governments and the state gave more than $17 million toward construction of the $260-million plant in Clarke County before breaks on sales, property and state corporate income taxes are counted. In exchange, the Nashville, Tenn.-based company agreed to employ at least 130 workers for 12 months at the mill, which opened earlier this year.

The chair of the Clarke County Commission, Elma Averett, said Monday the county wants Louisiana-Pacific to pay as much as $900,000 to change the incentives deal as it lays off 138 workers and idles the new mill at Thomasville.

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The incentives deal could otherwise require millions in repayments by the company, but the director of the Alabama Development Office, Neal Wade, said officials were willing to waive any payments to the state for at least one year.

Company spokeswoman Mary Cohn said Louisiana-Pacific has offered to make quarterly payments to Clarke County during the mill’s shutdown, but the amount wasn’t disclosed. She said the company also agreed in principle to the one-year extension from the state.

The negotiation could set a statewide precedent as officials are talking to several other companies looking to alter incentive deals, Wade said. He would not name the other companies.

“We’re going to take each one on a case-by-case basis,” Wade said.

The company could be forced to pay back at least $2.9 million without breaks from the county and the state, according to calculations by the Mobile Press-Register.

Clarke County administrator Lois Morris said the county owes $6.6 million on the money it borrowed to use as incentives for the plant, and it has a $462,145 payment budgeted this year. The county put a $25 tax on license plate renewals to pay the debt.

Averett said $900,000 is roughly equal to what the county spent on clearing and grading the site for the lumber mill, only part of more than $7 million it contributed.

“We hope to recover some of it, if not all of it,” he said.

The mill produces oriented strand board, a plywood substitute made from wood flakes that are glued together.

– Associated Press