Home Breaking News New Weyerhaeuser mill, tax-break proposal a ‘win-win’ for Dierks, school

New Weyerhaeuser mill, tax-break proposal a ‘win-win’ for Dierks, school

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Weyerhaeuser Company logo. (PRNewsFoto/Weyerhaeuser Company)

By John Balch

Leader staff

A new Weyerhaeuser mill in the works at Dierks and a tax-break proposal by the corporate giant will continue to greatly benefit the Dierks School District and the city, according to Superintendent Holly Cothren and Mayor Terry Mounts.

Weyerhaeuser is in the process of building a $190,000,000 new mill in Dierks and are requesting an Arkansas Taxable Industrial Development Revenue Bond that will allow for a tax break or PILOT (payment in lieu of taxes) on 65 percent of the total cost of the new mill. The mill will be built south of Highway 278 and west of Barite Road.

Cothren said the proposed PILOT break would generate approximately $571,900 in tax revenue annually for the school district over a 15-year period.

“This amount which is re-assessed by the county tax assessor will be paid annually throughout the lifetime of the PILOT agreement which has been negotiated down from 20 years to 15 years,” said Cothren.

During the construction phase of the new mill and initial two to three years of operations of the new mill, the old mill will continue to operate and pay it’s current tax rate of approximately $292,000 annually. “We will double-dip, so to speak,” said Cothren.

“In 15 years, at the end of the PILOT agreement, Weyerhaeuser will resume the regular tax rate, keeping in mind that there will be some depreciation of the mill after 15 years of operation,” Cothren added.

WIthout the PILOT agreement in place, the estimated taxable rate on the new mill would equal $1,634,000 annually for the school district.

Erin Hunter-Sprick, Dierks’ city attorney, said Cothren has been involved in the proposal from the start and played a major role in negotiating the tax-break proposal down to 15 years.

“I wanted to be involved as much as possible to ensure the longevity of our school district,” Cothren said. “What this will mean to the school is an increase for the duration of the 15 years of revenues of $279,830 per year with three to four years of revenues of $292,070 from the old mill operation as well. Also, all inventory and personal property on the premises will be assessed at the 100 percent value.”

According to the state funding formula, the first 25 mills go through the funding formula and as local taxes increase, state funding decreases; so the real increase for the district will come from the other 18 mills which taxpayers “graciously voted in to support our school district,” according to Cothren.

Weyerhaeuser has been a good corporate citizen to the Dierks area for many years and Cothren wants the relation to continue of the betterment of the community and school.

“Weyerhaeuser has chosen our community to build its new mill, and the city of Dierks and the school district will certainly benefit from this welcome addition,” she said. “Weyerhaeuser has been a wonderful partner to the Dierks School system throughout the years with technology grants and donations. We certainly look forward to a prosperous future.”

Mayor Mounts said he feels certain the tax-break proposal will clear the Dierks City Council at its June 8 meeting and set in motion many more years of a prosperous relationship with Weyerhaeuser that dates back close to 100 years.

“We’re tickled to death to have Weyerhaeuser here,” Mounts said. “It’s a win-win situation for all the parties involved.” The town’s economic cycle depends greatly on the company’s mill.

Mounts said the company has always been instrumental in progress in Dierks and is the first to offer services and lumber for projects. When the city built its new Community Center, Weyerhaeuser donated all the lumber for the project and then cut the city a $40,000 startup check. When the town was hit by a tornado in 2009, the company stepped up with more offers to help.

“They’ve always been here for us, so we’re going to be there for them,” the mayor added.