Redding, California, holds closed talks on land-for-jobs incentives with New England-based paper products start-up Southwest Paper USA; proposed deal could create several hundred jobs at around US$16.50/hour

LOS ANGELES , May 17, 2011 () – City council officials in Redding, California, were due to hold closed talks on Tuesday on whether to offer land-for-jobs incentives to Southwest Paper USA that could be worth around US$7 million.

The New England-based paper products start-up has expressed interest in buying up to 125 acres at the Stillwater Business Park, The Record Searchlight reported on May 12.

Pat Keener, economic development liaison for the city, said Southwest Paper may buy up to a third of the developable acreage in the park's first phase, valued at about US$10 million, for "several million dollars." In addition, the city will offer incentives for capital infrastructure worth hundreds of thousands of dollars.

According to Keener, Southwest Paper USA will employ several hundred people. Any agreement reached will be non-binding at this point, he added.

Incentives granted to the company could be worth more than US$7 million if they are similar to a now-terminated agreement with Southern Aluminum Finishing Co. That agreement required investment in building a plant, and the hiring of workers at 110% of the Shasta County median wage - about $16.50 an hour.

A key point in the deal will be ensuring customers for Southwest Paper USA's production. In late October, Redding requested assistance from then Gov. Arnold Schwarzenegger's Office of Economic Development in negotiations with a retailer that was to buy 70% of the company's products.

Schwarzenegger began transitioning out of office not long after receiving the city's letter, but Keener said Southwest Paper USA representatives are confident they now have buyers for the company's products.

The primary source of this article is The Record Searchlight, Redding, California, on May 12, 2011.

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