Title
RESOLUTION AUTHORIZING AN AMENDMENT TO AN AGREEMENT BETWEEN THE CITY, COMFORT SYSTEMS AND SOFIDEL AMERICA, CORP. TO EXTEND THE TERM OF A WATER SERVICE AGREEMENT.
Body
CITY PROPOSAL:
WHEREAS, the paper mill at 110 North Central Avenue is the city's largest user of water; and
WHEREAS, the city utility, Comfort Systems, entered into a Water Service Agreement contract on December 7, 2004, with the Mill owner for a preferred rate of 0.5161 cents per one hundred cubic feet (CCF) of water delivered. The current contract expires December 7, 2024; and
WHEREAS, on December 22, 2023, ST Paper 1, LLC ("ST Paper") gave written notice to the city of its intent to sell the paper mill to Sofidel America, Corp. ("Sofidel").
BE IT RESOLVED, that the proper city officials and Comfort Systems are authorized to enter into an agreement with Sofidel to extend the term of the Water Services Agreement for the rate of 0.5161 cents CCF to December 7, 2028.
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Statement of Purpose
STATEMENT OF PURPOSE: This resolution authorizes the city to extend the term of a water services agreement with owners of the paper mill located at 110 North Central Avenue, Duluth, Minnesota, for a rate of 0.5161 cents CCF to December 7, 2028. 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...
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