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CITY BEAT 14 COURT BEAT 15 Newsworthy
Weyerhaeuser to End Production at Columbia Falls Mills This Week Company o cials says 72 employees will lose their jobs; tax implications loom large
BY JUSTIN FRANZ AND DILLON TABISH
Seventy years of lumber production will come to an end this week when the Weyerhaeuser Company begins shut- ting down its lumber and plywood mills in Columbia Falls.
Tom Ray, the company’s Montana resources team leader, said lumber pro- duction will end Aug. 19, although some employees will stay on for a few weeks to plane and ship the nal loads. The clo- sure comes nearly two months after the Seattle-based timber giant announced it was shuttering two mills in the Flathead Valley.
Weyerhaeuser’s medium-density berboard plant in Columbia Falls and its two mills in Evergreen will continue to operate.
Ray said 146 employees from Colum- bia Falls would be reassigned to the mills in Evergreen, where extra shifts are being added. Seventy-two mill work- ers will lose their jobs once the closure is nal. Another 100 employees at Weyer- haeuser’s administrative o ce in Colum- bia Falls, known as the Cedar Palace, will also be out of work by the end of this year after positions are moved to Washington.
The company has not said what it intends to do with the shuttered mills. Closing the facilities could have tax implications on state and local entities, such as the school district. Weyerhaeuser will still owe its 2016 property and busi- ness-equipment taxes, which means the losses will not occur this year. Montana is on a two-year reappraisal cycle, and state o cials will reappraise the property in January 2017.
According to an analysis by the Mon- tana Department of Revenue, if Weyer- haeuser were to sell o equipment at the sites and raze the buildings, property tax contributions would drop from $462,129 to $68,106. The Columbia Falls School District 6 would lose over $100,000 in annual contributions from Weyerhae- user – roughly $88,000 in the elementary district and $35,400 for the high school. The city of Columbia Falls would lose $100,116 in annual property taxes. The county would lose $72,960.
If Weyerhaeuser’s mills sit there, the company would still pay taxes but the market value of the property would begin to decrease, a ecting tax contributions, said Kory Ho and, bureau chief with the business tax and valuation bureau in the Department of Revenue.
Weyerhaeuser facilities in Columbia Falls. BEACON FILE PHOTO For example, just before Columbia
Falls Aluminum Company closed its plant in 2009, the company paid $462,391 in property taxes. As the property under- goes demolition, this year CFAC is paying $67,335 in property taxes.
“With these large income-produc- ing properties, it depends on the level of shutdown they go into,” Ho and said.
“And it’s not that the county is out that money. They’ll probably raise everybody’s (property tax) mills to get that back. It shifts the burden to other taxpayers.”
The loss in income taxes will also impact Montana’s general fund.
Last week Weyerhaeuser announced its second quarter earnings for 2016 and said it was the company’s highest of any quarter in the last decade. Weyerhaeuser reported net earnings of $157 million and net sales of $1.7 billion. The wood prod- ucts division reported its strongest sec- ond quarter earnings in over a decade. Net sales hit $664 million. In the west- ern division, the company’s domestic and China sales increased, while Japan vol- umes decreased following an announced delay in a higher consumption tax. Looking ahead to the third quarter, the
company expects comparable fee har- vest volumes, seasonally higher per unit logging costs, and slightly lower export prices.
“Our businesses delivered solid sec- ond quarter operating results, with Wood Products capitalizing on improving mar- kets and ongoing operational excellence initiatives to report its strongest quarter in over a decade,” Doyle R. Simons, pres- ident and CEO of Weyerhaeuser, stated last week in the earnings report. “During the quarter we also announced the sale of our pulp and liquid packaging board facilities, repurchased over $830 mil- lion of common shares, and made strong progress on merger integration activities. Going forward, we remain relentlessly focused on successfully integrating Plum Creek, and fully capturing cost and oper- ational synergies to drive superior value for our shareholders.”
The timber operations, formerly under Plum Creek, date back to 1946, when D.C. Dunham moved his small upstart lumber business to the Flathead Valley and opened a sawmill in Colum- bia Falls, renaming it Plum Creek after a small stream back in his home state of Minnesota. The plywood plant in
Columbia Falls broke ground in 1964 and opened the following year. The MDF plant opened in Columbia Falls in 1974.
Weyerhaeuser absorbed Plum Creek in a merger earlier this year, and com- pany o cials initially said timber opera- tions would not be a ected. In late June, the company changed its position with the announcement of the ensuing clo- sures. At the time, the Columbia Falls plants employed 230 people. The com- pany initially estimated that 100 jobs would be cut, not including the Cedar Palace losses.
Following the cuts, Weyerhaeuser now employs roughly 550 people in the Flathead Valley. The company also owns 880,000 acres in Montana, including 709,927 acres in this corner of the state that are open to public access through a block management agreement with the state. The company signed an agreement earlier this year with Montana to allow free public access on its vast landholdings for another year. In other states, Weyer- haeuser charges for access to its land, but company o cials have said there is no immediate intention to change the free open-access policy in Montana.
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AUGUST 17, 2016 // FLATHEADBEACON.COM