NEWARK, Ohio (From news reports) - Packaging Corporation of America may spend up to $170 million to move from South 21st Street in Newark, Ohio to build a new, larger facility on a Thornwood Drive site once considered for an ethanol plant.
PCA, based in Lake Forest, Illinois, operates a Newark facility at 205 S. 21st St., where traffic often stops while semi truck drivers back into tight spaces. The plant employs 132 full-time workers in Newark, of its more than 15,000 employees at 100 locations.
Newark City Council's Finance Committee on Monday approved a resolution consenting to a tax abatement agreement between the Licking County Commissioners and Packaging Corporation of America for a 10-year, 75% property tax abatement on improvements made at 595 Thornwood Drive SW.
The company stated in its tax abatement application that it is also considering moving the Newark plant to another state, possibly Indiana or Michigan.
"Tax incentives can improve the financial metrics for this Newark proposed project to compete against all other PCA locations for limited capital spending dollars," the company states in its application.
The full council and county commissioners must also approve the revised agreement, which repeals and replaces an agreement council approved in May that would have committed the company to adding eight to 10 jobs, as well as retaining the 132 current employees.
Mark Mauter, the city's development director, said the company asked for the change in the agreement.
"The first one we did, at the time, they thought they'd create another eight to 10 jobs," Mauter said. "With COVID and the current conditions, they don't feel confident they'll be bringing on the eight to 10 new jobs."
The company estimated its total investment on Thornwood Drive at between $88 million and $170 million, which includes almost $2 million for acquisition of land and buildings, $40 million to $72 million for new construction, $1 million for improvements to existing land/buildings, $45 million to $95 million for machinery and equipment, and $500,000 for furniture and fixtures.
City Councilman Doug Marmie, R-6th Ward, said, "I was told with our tax abatement, they are wanting to stay here, but to make the numbers work, they need the tax abatement. If we can keep their employees inside of Newark, that'd be fantastic. It's 132 full-time positions paying income tax."
City Councilman Jeremy Blake, D-2nd Ward, said he was not aware of the Thornwood site until the most recent legislation came to council.
"I am concerned about PCA leaving a vacant facility on South 21st Street," Blake said. "I am thankful to keep them in Newark and the jobs they provide, but I'm concerned about the future of property in my ward. If they needed a larger site, I was hoping they would have looked at Union Street as a possible new site."
A site just south of the current PCA plant remains a brownfield site.
"We worked a couple years on solutions and didn't have enough money," Mauter said of cleanup efforts.
But, Mauter said, he believes PCA's proposed move is all about expansion of the business.
"They're growing," Mauter said. "They're a growing company. They have maximized just about every square inch (on 21st). Overall, I think it's just for long-term growth."
Nate Strum, director of Grow Licking County, said he's not sure of the company's growth, but knows that the e-commerce businesses are thriving.
"I think it's a wonderful opportunity to secure a long-term employer in Newark and Licking County, to modernize a facility to state-of the-art and keep jobs here long-term. It's one of the largest investments in the city for the last number of years."
In 2007, Seattle-based E85 Inc., considered building on a 78-acre site at 595 Thornwood Drive, between James Road and the railroad tracks.