As Adirondack paper plant goes dark again, questions about state railroad spending

Is the Newton Falls Paper Mill a good investment for taxpayers? Photo: Newton Falls Paper support group on Facebook

The Watertown Daily Times is reporting this week that the latest effort to revive the Newton Falls paper plant has faltered.

“They’re going to try to find a buyer or liquidate it,” said Fine Supervisor Mark C. Hall, a member of the St. Lawrence County Industrial Development Agency told the newspaper.

“There are people out there who still think they’re going to find a buyer. I’ve got my fingers crossed that they find a buyer and the mill will operate again. Time will tell.”

According to the Times, there are currently just five employees at the mill, which has struggled for the better part of a decade, part of the regional downturn in the paper industry.

This news comes after the North Country Regional Economic Development Council agreed last year to spend roughly $9.6 million refurbishing an industrial railroad that connects the tiny village of Newton Falls to the rest of St. Lawrence County.

Gov. George Pataki in Newton Falls in 2002. Photo: Brian Mann

Previously, state officials had committed to spending millions of dollars to help reopen the plant, including aid from Gov. George Pataki in 2002 and a $1.7 million grant from Gov. Eliot Spitzer in 2007.

According to the NCREDC, the project would help support “155 jobs at Newton Falls Fine Paper” and could also give momentum to a “bio fuel project, natural resource manufacturing.”

Local officials hope the line will also allow granite tailings to be removed from the defunct Benson mines.  As recently as May, plans were still underway to spend the grant money on the line, despite the paper company’s struggles.

So what do you think?  Is this a good investment of taxpayer money by state officials?  This was the largest single grant offered to a project applicant in our region — nearly $10 million.  Is this a good strategy to revitalize a struggling part of the Adirondacks, or a risky investment?

Your comments welcome.

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17 Responses to “As Adirondack paper plant goes dark again, questions about state railroad spending”

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  1. It's Still All Bush's Fault says:

    This is unfortunate for the people and the area.

    I remember thinking when it was restarted a few years back, “Are they going to produce the same products that the previous owner went out of business making?” The smaller, older mills need to find niche markets where their size and production rates give them an advantage over the larger, faster machines. If you’re making commodity products, you won’t be around long.

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  2. mervel says:

    You can’t prop something up that is at it’s core not viable.

    It was and is a waste of precious tax dollars that could have been used elsewhere and for better purposes.

    Let this thing die already!

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  3. @tourpro says:

    For that amount of money, you could convert every old theater in New York to digital.

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  4. Jim McCulley says:

    It’s very sad for this area to lose this business but it is also sad that other people are losing their business. Because New York State is taxing us to death for dubious projects like the railroad here that Gary Douglas pushed for and it will not make the economy better. Tahawaus railroad that Gary Douglas pushed and apparently has no customers for that rail line either. Then of course Gary is pushing passenger service on the Adirondack Corridor that has failed three times and according to their own study will take 16 million to resurrect to bring just 7,000 new visitors to the area per year. (NYSDOT has that number at 43 million) How much longer are we going to accept these boondoggles promoted by Gary Douglas and ANCA? It’s a shame Gary Douglas and ANCA have never worked in the private sector at least then he and Kate Fish might have a clue how business are operated.

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  5. Mick says:

    Some sectors of the paper manufacturing industry are booming. Fine writing papers is not one of them. Digital print paper sales are through the roof. Sustainable food packaging is booming. They need to adjust to market conditions.

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  6. Steve says:

    You could give each of those 155 people $65k and call it a day.

    I agree with Jim regarding ANCA and the North Country Chamber of Commerce. The only reason my local chamber is a members of the NC chamber is they help provide health insurance to small businesses. What have they done for the north country? What has ANCA done for the NC? They exist to give themselves a paycheck

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  7. jeff says:

    Papermills have been closing around the country for 30 years as modern facilites out produce old operations. It is creative destruction at work. It is a creature of our economic system. Somebody gets an idea, tries to make it work such as re-using the old facility- and they discover if it can be done.

    In a town where I used to live a sister paper mill to the one now long gone in Willsboro was bought over 40 years ago by a group of investors. They made it run for over 20 years until a larger corporation saw potential in the operation and invested a quarter of a billion dollars. The facility has changed hands twice since that time as corporations divested and acquired operations.

    This mill opening and closing would not be an issue except that people in the towns and employees have to adjust to all of this, particularly loss of work. The human cost is not well built into the economy. Wages do not cover the cost of retraining and relocation. Taxes have been applied to provide some support but support is very limited against the need.

    It is kind of like making money and not paying for the expense of polluting the environment, or land reclamation. Our electric bills come from a company that only delivers electricity and does not generate it so they don’t have to deal with the generation issues such as pollution. The company wants to be a service not a manufacturer.

    I recall an article about kids at one of the Potsdam or Canton colleges carrying all of their non-recyclable garbage for a week. I wonder if businesses should be attached to their legacy of employees left in the lurch.

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  8. Larry says:

    More tax money spent on railroads to nowhere. If any of these projects were commercially viable private sector investment would be available. Business does not ignore opportunitiies to make money but they run like hell from situations where they could lose it, unlike New York State which never runs out of opportunities to throw tax dollars at failed businesses.

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  9. Pete Klein says:

    You try and sometimes you fail. That is the nature of trying. Of course, you can always sit on the sidelines and never try. That gives you the opportunity to criticize those who fail and tell everyone what a genius you are for never failing.

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  10. knuckleheadedliberal says:

    Does anyone know where the market is for all the mine tailings that will in theory be carted out of the Adirondacks on these rail lines? And with a whole continent chock full of abandoned mining operations isn’t it likely that there are other mines closer to the end user?

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  11. Paul says:

    Knuck, That is a good question. Strangely I was having a conversation with an engineer I met on vacation in Cape Cod last summer and he told me that there was a plan to use tailings like this on a project to fill over much of the contamination on Onondoga lake. In fact it sounded like one plan was to fill the lake over completely. Some of these places are so contaminated they need to be buried.

    Or maybe it is really just things like the “fresh material” they describe here. Two Carrier Domes worth is a lot of fill:

    http://www.syracuse.com/news/index.ssf/2012/07/an_onondaga_lake_turning_point.html

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  12. “Is this a good strategy to revitalize a struggling part of the Adirondacks, or a risky investment?”

    Short answer? Yes.

    “…a $9.9 million state grant — of a railroad line that spans three counties. Rebuilding the line that runs through Jefferson, Lewis and St. Lawrence counties…”

    is a ‘start’ on revitalizing ALL the rail in/around the ADKS, and, combining that revitalization w/laying MUCH more fiber optic line along the ROWs [right of ways] to reduce/eliminate the ‘Dark Territory’ aspect of ‘America’s Most Accessible Wilderness’ UNLESS you’re talking WiFi, mobile, data, etc, that is : (

    ‘Digital Natives’ (those either born into a digital world, or, those that unfailingly embrace any/everything ‘digital’) won’t ‘go’ where they are ‘cut off’ from the[ir] digital world.

    So, we need to ‘upgrade’ the Dacks and…while we’re at it, along those newly refurbed rail lines all over the Adirondacks, we grow the craft brewing industry one pico/nano brewer at a time and create thousands of clean, blue-green , sustainable family-wage jobs that won’t g’o away’ because they’re coming/starting here because of the TRILLIONS of gallons/yr ofpure soft water we have to brew world class craft beers! Na zdravi!! ADKBREWCO

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  13. knuckleheadedliberal says:

    Interesting story, Paul. Sounds like their clean-up plan is similar to what GE originally said would happen on the Hudson – suck up the bad stuff and pipe it to a treatment area then return the water. Seems like a good plan if they keep to it.

    This is also a really good example of how a set of people make a lot of money by passing costs of their operation onto succeeding generations. At least Honeywell is picking up the tab but there have been 100 years that people have been robbed of their ability to use the lake. That ain’t right.

    Anyway, maybe that is where the Benson Mines tailings will go and we the taxpayers will help to make it possible by helping to fund rehabilitation of the rail lines. I guess it is a better use of my tax dollars than dropping bombs on Afghanistan or Iraq. At least the money that will help make a few people richer will also make something better for everyone.

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  14. Paul says:

    “At least the money that will help make a few people richer will also make something better for everyone.”

    That is usually how it works. But personally I think that if the company can’t make it work on their own it probably isn’t that great a plan. Financing has never been as cheap as it is right now. Let’s save public funding for other projects. But hopefully our reps have made the right decision. I do wish the folks involved the best of luck.

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  15. If Clapton is God, Warren Haynes is Jesus says:

    Beer,

    Don’t forget small, independent, craft distilleries such as the one already running in Lake Placid and proposed in Jefferson County. And if only the state and feds would allow small, independent producers of that “evil” but much less toxic product called marijuana to be grown commercially we’d see jobs and economic opportunity there too.

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  16. Jim McCulley says:

    Ah now the great brewery economic boom for the Adirondacks that will be build if we have railroads. That makes sense FX Matts in Utica ( which brews for the Lake Placid Pub and Brewery) does not have a rail link. But shipping the tons of grains from the Midwest to the Adirondacks by rail is feasible and going to happen. lol The desperation to save these failed operations is comical and sad, it we could only have a debate with facts instead of pipe dreams. The problem is no one wants to know the facts anymore that’s why politicians lie all the time and the public would rather be lied too.

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  17. knuckleheadedliberal says:

    I’d be much happier paying for rail lines to supply breweries than to haul rocks.

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