ESCANABA — Two Delta County townships and the county itself took steps this week to support a possible expansion at the Escanaba paper mill.

Each of the three governmental units held a separate meeting to discuss the designation of 34 parcels crossing Wells and Escanaba townships as a Forest Products Processing Renaissance Zone. The designation will result in property taxes being abated on the 1,932 acres for the next 15 years.

When combined with renaissance zone abatements already approved at the state level, Billerud, which operates the mill, will receive more than $1.96 million worth of tax abatement annually. The impact of the two townships abating taxes has an estimated value of $657,000 over 12 years for each year of investment, according to the Michigan Economic Development Corporation (MEDC).

However the actual impact on the townships themselves may be far less. Escanaba Township, which unanimously approved the renaissance zone designation during a special meeting Tuesday at the Delta County Commerce Center, will only see a loss of about $600 annually, based on the taxes collected on the affected parcels last year.

Wells Township, where the majority of the mill’s already improved-upon land resides, and the county will face a larger impact from the abatements. However, both Wells Township and the Delta County Board of Commissioners approved the renaissance zone and related abatements unanimously at meetings held this week.

Local school districts, Bay College, the Delta-Schoolcraft Intermediate School District, and local libraries will not be affected by the abatements, as the state will be reimbursing these taxing units.

For Billerud, the tax savings can only increase. Improvements on the parcels could greatly affect the taxable value of the land, which means that the tax savings for Billerud would increase as new buildings and equipment are constructed. The site is one of three properties owned by Billerud currently being considered to shift production to cartonboard, also known as “paperboard,” a common packaging material used to make items like cereal boxes.

Also in the running for the shift to cartonboard production are the Quinnisec mill, which produces graphic papers and pulp, and the Wisconsin Rapids, Wis. facility, which now is a converting facility but produced graphic paper until 2020. The Wisconsin Rapids facility is supported by hydroelectric plants owned by Billerud on the Wisconsin River.

Billerud expects to make an announcement as to which of the three sites will be home to the company’s first cartonboard machine in North American sometime in January. The company has stated that the renaissance zone and tax abatements will factor into its decision as to where the machine will be located.

If Escanaba is selected, the new machine and mill expansion would result in a $1.06 billion investment from Billerud, largely possible due to the tax abatements. The project would result in the retention of at least 1,240 jobs, and a substantial increase in material output at the mill.

If the Escanaba mill is not selected for the project, the outlook for the mill is grim. In a memo issued Dec. 13, Interim Managing Director, Business Development Projects Jermey Webb wrote, “If the Quinnesec or Wisconsin Rapids facilities were selected for the investment, the Escanaba plant would very likely not survive long-term.”

Webb further stated loss of the mill would result in $3.6 billion worth of direct economic activity over a 10-year period. Driving the mill’s eventual closure would be changes in market conditions and the loss of demand for graphic paper products like those used to produce magazines.