Ainsworth agrees to maintain Bemidji plant 'salable'
Facing a probable legislative mandate, Ainsworth Lumber Co. has agreed to keep its three closed Minnesota plants operationally ready, two lawmakers said Tuesday.
Because of a the unprecedented downturn in the U.S. economy, Ainsworth closed wood products plants in Cook, Grand Rapids and Bemidji. The most recent closure was last fall in Bemidji, when 150 employees were given sever-ance pay and the plant closed.
Ainsworth stopped produc-tion of its oriented-strand board product in Grand Rapids in 2006. On Jan. 27, Ainsworth announced it was permanently closing its Bemidji and Cook plants.
Legislation proposed by Rep. John Persell, DFL-Bemidji, and Sen. Mary Olson, DFL-Bemidji, to require Ainsworth to maintain its facilities in a salable condition for at least two years led to an agreement with Ainsworth that could help the city of Bemidji find another user for the closed Ainsworth OSB plant in Bemidji.
Persell says he authored the legislation based on a suggestion from Rep. Tom Rukavina, DFL-Virginia, who has au-thored similar legislation when Iron Range taconite plants closed.
Rukavina is co-author of Persell's bill, as well as Reps. Brita Sailer, DFL-Park Rapids, and Loren Solberg, DFL-Grand Rapids. The bill passed one committee hurdle in the House and had its second reading.
Because of the legislation, Ainsworth has made a commitment to maintain, help determine alternative uses and enhance the marketing of the closed Ainsworth OSB facilities, including the one in Bemidji, Persell and Sailer said Tuesday in a joint statement.
"An empty building that has been stripped of its assets is a difficult business to sell," said Persell. "We need to make every effort possible to find another use for this facility and replace the badly needed jobs in our region."
According to the new agreement, Ainsworth will provide $150,000 to be split among the three sites for the purpose of determining feasible alternative uses for the facilities. After the feasibility study, Ainsworth has agreed to work with the state of Minne-sota, the Iron Range Re-sources Board and legislators to enhance the solicitation of buyers for the three sites, Persell and Sailer said.
"The Ainsworth plant in one of the region's largest employers," said Sailer. "In this economic environment, when it comes to creating and keeping jobs, we'll leave no log unturned."
Ainsworth announced in early April that it was investigating alternative uses for its 223-acre industrial site in Grand Rapids, working with the IRRB and the Itasca Economic Development Corp. Proposed is a multi-tenant Eco Industrial Park for tenants focused on producing clean, renewable or sustainable energy products.
The bill would have provided that owners or operators of oriented-strand board manufacturing facilities submit at least 60 days before determining to permanently discontinue operations a temporary maintenance plan to the commissioner of employment and economic development for approval.
Plants closed after July 1, 2008, would have 60 days after enactment of the bill to provide such a plan. It would need to include for the orderly shut-down of the plant, make provisions for fire prevention and staffing for security, maintenance of plant facilities including supplying heat or cooling where needed plus maintenance of utility lines needed to support the property, and compliance with all permit requirements.
The company would need to report periodically to the DEED commissioner on all maintenance activities and any plans to liquidate assets.
"I appreciate these good-faith efforts by Ainsworth in helping to secure new ownership for this facility," said Persell about the agreement which will negate the need for the bill. "This recession will end, and when it does, it would be good to have a site such as this ready to go."
Olson's Senate bill was pre-pared to be included in the Seate omnibus tax bill now in conference committee. It is co-sponsored by Sens. David Tomassoni, DFL-Chisholm, and Tom Saxhaug, DFL-Grand Rapids.
Ainsworth "has been trying to convince us down here to remove the pending legislation that requires them to keep the infrastructure in place," Olson said late last week. "But honestly that's been a helpful piece of leverage."
But with Ainsworth's commitment to maintain the plant, "we're not going to do anything that's going to stand in the way of a deal," Olson said.
The Joint Economic Development Commission is also working on potential buyers, Larry Young, executive director, told the Beltrami County Board last month. There may be a potential use of the plant in biomass energy production, he said.
But Olson is hoping for another wood products manufacturer.
"We've only got one place where we've got the infrastructure in place to use for a true forest products industry," she said. "Once that goes away, it's much less likely to come back."