After Canton plant closure, NC leaders in talks with Pactiv Evergreen over $12M incentives

Top state officials and an Illinois company that shut down the Canton paper plant half a year ago ― throwing more than 1,000 out of work ― last spoke just before Christmas in ongoing talks about whether the state will take back $12 million in economic incentives the mill received.

That is according to a spokesperson for Gov. Roy Cooper who updated the Citizen Times Jan. 12 on what the offices of Cooper and Attorney General Josh Stein have characterized as ongoing discussions with the company Pactiv Evergreen, a maker of food packaging such as milk cartons.

"Our office continues to engage with the Department of Commerce, the Department of Justice, local officials and Pactiv to reach a resolution that best supports the needs of the community, including the repayment of state incentive funds," said Cooper spokesperson Jordan Monaghan.

A month before the 115-year-old iconic paper mill shut down Cooper and Stein said if the plant closed they would look to enact "clawback" provisions of the $12 million Job Maintenance and Capital Development grant that the state gave Pactiv.

Six months after the May 24 closure, the funds are not back in state hands.

A spokesperson for Stein confirmed AG's office confirmed Stein and staff have been in "continued conversations" with Pactiv and other parties for the past eight months.

"Our position continues to be that Pactiv’s decision to close the paper mill constituted a breach of the JMAC agreement that requires repayment of the full $12 million it received in incentives," spokesperson Nazneen Ahmed said, adding that Stein will "continue to work on behalf of the residents of Canton and North Carolina’s taxpayers."

Stein is running to replace fellow Democrat Cooper when the governor retires at the end of this year.

The Citizen Times reached out to Pactiv and the commerce department.

Once owned by Champion, the United Steelworkers union bought the mill in 1999 and formed Blue Ridge Paper. Struggling with consistent financial losses, the mill workers sold the factory in 2010 to Evergreen Packaging, a New Zealand company owned by billionaire Graeme Hart.

A decade ago the company was facing a U.S. Environmental Protection Agency requirement to replace old coal-fired boilers. New natural-gas powered boilers would cost $50 million including new supply lines, Evergreen said.

In a last-minute vote the General Assembly approved the incentives, giving the company $12 million over six years. The company was required to employ at least 800 full-time employees for at least 10 years.

At the time, the mill employed about 1,000 people with an average annual wage, including benefits, of $78,300.

The state has succeeded before in recapturing incentives, said UNC School of Government public law professor Tyler Mulligan.

"A well-known example is the Dell incentive package. When Dell closed its manufacturing facility in the Triad, it agreed to pay back the State and local incentives it had received," he said.

But whether that will work is unclear, according to Mulligan. Typically, paybacks are only required for JMAC grants when a company fails to meet a minimum capital investment, he said. In its message to the commerce department, the Citizen Times requested a copy of the contract.

Evergreen merged with Pactiv in 2020.

Pactiv drew the ire of officials when last year before announcing the closure and layoffs, corporate officers declared they would pay a bonus to shareholders and sold more than $600,000 in stock. Then the price nosedived.

Republican Congressman Chuck Edwards, whose 11th District covers most of Western North Carolina, including Canton, called for a Securities and Exchange Commission investigation. It's not clear if the SEC has taken any action. Investigations by the regulatory body are done privately and only become known to the public with the filing of an enforcement action.

Joel Burgess has lived in WNC for more than 20 years, covering politics, government and other news. He's written award-winning stories on topics ranging from gerrymandering to police use of force. Got a tip? Contact Burgess at jburgess@citizentimes.com, 828-713-1095 or on Twitter @AVLreporter. Please help support this type of journalism with a subscription to the Citizen Times.

This article originally appeared on Asheville Citizen Times: NC in talks with Pactiv Evergreen over $12M incentives; Canton closure