Title
RESOLUTION AUTHORIZING THE AMENDMENT TO TAX ABATEMENT AGREEMENT WITH ST PAPER 1, LLC TO SUPPORT THE SALE OF THE PAPER MILL LOCATED AT 110 NORTH CENTRAL AVENUE TO SOFIDEL AMERICA, CORP.
Body
CITY PROPOSAL:
WHEREAS, on August 2, 2021, the city and St. Louis county entered into Tax Abatement Agreement 5721 authorizing a tax abatement in an amount not to exceed $600,000 in respect of property taxes levied by the city on the property for ten years, commencing with taxes payable in 2023 and concluding with taxes payable in 2032.; and
WHEREAS, on December 22, 2023, ST Paper gave written notice to the city of its intent to sell the paper mill to Sofidel America, Corp. (“Sofidel”) and requested amendment of tax abatement agreement to substitute Sofidel for ST Paper as the paper mill owner; and
WHEREAS, on January 9, 2024, the city requested that the county amend the tax abatement agreement to accommodate the substitution of owners. The county agreed to draft an amendment to the tax abatement agreement and such other documents that may be necessary to facilitate the change. The county anticipates considering the amendment at its January and February county board meetings.
NOW, THEREFORE, BE IT RESOLVED, the proper city officials are authorized to enter into an amendment to the existing tax abatement agreement and any necessary associated documents with the county, such amendment to be drafted by the county, to allow the tax abatement to continue to the benefit of the real estate property and Sofidel, the new owners.
.
Statement of Purpose
STATEMENT OF PURPOSE: This resolution authorizes city officials to enter into an agreement amending the existing tax abatement agreement for the paper mill and any necessary associated documents with the county This resolution is part of a package of resolutions facilitating the transfer of the paper mill owned by ST Paper located at 100 North Central Ave. to Sofidel America, Corp., (“Sofidel”). Sofidel intends to continue to operate the paper mill for the production of tissue paper. ST Paper purchased the paper mill in 2021 and has invested over $56 Million dollars in construction and new equipment. At the time of ST Paper’s purchase, the city supported the private investment through two loans and tax abatement. A development agreement was also entered into between the city and ST Paper. ST Paper has met the requirement of 80 new jobs created, however, the requirement to maintain those jobs is continuing for the life of the loans and development agreement which have not yet expired. The change in ownership requires substituting Sofidel for ST Paper’s responsibilities in the agreements. In addition, the city utility, Comfort Systems, seeks authorization to continue to charge the new owner a preferred water rate of 0.5161 cents per unit. The paper mill is the utility’s largest water customer.