Florelle Tissue to purchase dormant Brownville, New York, paper mill for restart in early 2011; company will produce tissue, toweling, napkins for export to Canada

Mathew Kearney

BROWNVILLE, New York , October 29, 2010 (press release) – New York Power Authority (NYPA) President and Chief Executive Officer Richard M. Kessel and Harry Minas, president of Florelle Tissue Corporation, today announced the company’s plans to invest $3.5 million to reopen a dormant paper mill in Jefferson County and create 75 new jobs. Joining them at the event were Senator Darrel J. Aubertine, Assemblywoman Addie J. Russell, and numerous local officials.

Florelle Tissue, a Canadian company, plans to purchase the vacant Brownville Paper Mill and renovate the 95,000 square foot facility and install new machinery and equipment. When it is opened in early 2011, the new manufacturing facility will produce paper from pulp and convert that into paper towels, napkins and tissue and export its products back to Canada.

“The decision by Florelle Tissue to locate new manufacturing operations in Northern New York highlights the region’s great strengths – its skilled workforce, its access to low-cost hydropower and the ability of its state and local officials to collaborate on incentives to attract businesses to the area,” said Governor David A. Paterson. “With leaders such as Senator Aubertine and Assemblywoman Russell, and dedicated local officials working together, I am confident that we will continue to see projects such as this that will reinvigorate the local economy and put more North Country residents back to work.”

“The allocation of NYPA Preservation Power is critical to jumpstarting the economy of the North Country,” Kessel said. “Florelle Tissue’s commitment to locate manufacturing operations in Brownville underscores the great potential of this region and the significance of low-cost hydropower as a key element in attracting and maintaining manufacturing jobs in the region and state. I’d like to thank our partners in this economic development project, including Senator Aubertine, Empire State Development, the Jefferson County IDA and others who worked so hard to make this happen.”

“The discounted power will reduce overall production costs and improve cash flow to help the company establish itself and grow more quickly,” Minas said.

“This investment in our community by Florelle and the jobs it will create is great news for a work force with years of experience ready to go back to work right here in Jefferson County,” said Sen. Darrel J. Aubertine, vice chair of the Senate Energy & Telecommunications Committee. “This project is coming together through a tremendous partnership of our local IDA, state government and private industry to bring in 75 good jobs for many years to come. Over the past two years, I’ve worked closely with NYPA to make sure our resources are used to create jobs here, and I want to thank all involved who made this possible.”

Assemblywoman Addie J. Russell said; “Time after time, the cost of energy is cited as one of the most important factors when businesses make strategic decisions. Preservation Power is a powerful economic development tool that sets our community apart from others in the state. At a time when other areas are still faltering economically, we are able to attract businesses that will invest in our community and create jobs that require the skills of our workforce. The addition of 75 jobs to the North Country and $3.5 million dollars in new investment is great news. While it is hard to replace the jobs lost at GM, it is noteworthy that in a relatively short amount of time we are here today with good news that will put people back to work. I commend the New York Power Authority for ensuring the preservation power is being put to good use and Florelle for selecting our community to become part of their family.”

“We’re certainly pleased to have the Preservation Power program available as a unique incentive for business expansion and attraction in the region,” said David J. Zembiec, Deputy Director for the Jefferson County Industrial Development Agency. “This project would not happen without the involvement of our partners at the regional and state level.”

Eugene L. Nicandri, NYPA Trustee, said: "Florelle's decision to open operations in Jefferson County is the most welcome news. It is gratifying to see that hydropower generated in this region will be used once again to support job creation and economic development in Northern New York."

In return for the investment and maintaining job commitments, Florelle Tissue will receive benefits including 1,300 kilowatts (kW) of low-cost hydropower from NYPA. This power, generated at NYPA’s St. Lawrence-FDR Power Project in Massena, is the first allocation of Preservation Power.

Other incentives include: a $250,000 loan from the Jefferson County Industrial Development Authority; $250,000 in financing from the State Office of Community Renewal through the Community Development Block Grant program; a $200,000 loan from the Development Authority of the North Country; and a $100,000 grant from the Jefferson County Local Development Corporation.

Empire State Development (ESD) is also providing incentives to Florelle Tissue, including designating it as a regionally significant project, which qualifies the company for benefits under the Empire Zones program, including 75 percent property tax rebates. To encourage Florelle Tissue to proceed with the project, ESD also will provide the paper manufacturer with a $250,000 grant toward reimbursement for a portion of the cost of new machinery and equipment.

“Empire State Development has made it a goal to repurpose empty manufacturing facilities throughout the State,” said Empire State Development Chairman & CEO Dennis M. Mullen. “Today’s announcement is an excellent example of an opportunity to build on the state’s manufacturing legacy. I’m pleased that Florelle Tissue Corporation will remodel and equip this closed paper mill and put it back into production in New York State.”

The company’s investment includes $1.85 million in machinery and equipment and $300,000 in renovations and building improvements. The defunct Brownville mill had previously employed over 60 people who were laid off when the plant closed in mid-2008. With the mill’s reopening, Florelle’s paper mill will help reinvigorate the local economy and provide jobs to the displaced workers previously employed at the mill.

The hydropower allocation, approved by the NYPA Board of Trustees in September, is from an economic development hydropower program known as Preservation Power, which was signed into law in 2005 and is available to eligible new or expanding businesses in St. Lawrence, Jefferson and Franklin Counties.

Currently, there are 10 megawatts of competitively priced Preservation Power available for allocation.

Applications for Preservation Power are evaluated on several criteria including the number of jobs created and their associated wages and benefits, capital investments, and the extent that the business plan is consistent with state, regional and local economic development strategies and priorities.

“The economic health of the North Country depends upon our ability to successfully encourage companies to locate here by offering unparalleled business opportunities. I am extremely pleased that Florelle Tissue is one of those companies and their decision to renovate and reopen the vacant Brownville paper mill will greatly benefit this area. I have always been a strong proponent of keeping hydropower from the St. Lawrence-FDR Power Project right here in St. Lawrence County and find it encouraging for North Country businesses that Florelle will receive the kilowatt power it needs to create jobs,” said Assemblywoman Dede Scozzafava (R,I,WF-Gouverneur).

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