One year after former Gov. Scott Walker struck a last-minute deal to keep a Fox Valley Kimberly-Clark plant open, officials with the company say they’re “making great progress" on expanding a facility previously slated for closure.
In the midst of a $115 million investment at the company's Cold Spring plant that includes a new 135,000-square-foot warehouse, Kimberly-Clark has also hired 80 workers for the facility and is planning to bring more on in the future.
The $28 million deal, announced Dec. 13, 2018, came in the waning days of Walker's second term and shortly before the Republican signed a trio of Republican lame-duck bills into law. The agreement kept the Cold Spring facility in business, while the nearby Neenah Nonwovens plant still ultimately shut down.
Kimberly-Clark spokesman Ron Maturo wrote in an email the company appreciates its partnership with the state jobs agency, the Wisconsin Economic Development Corporation, and noted the current investment has targeted capital improvements at the Cold Spring plant and will continue for the next few years.
Meanwhile, WEDC Secretary and CEO Missy Hughes, who began in the role on Oct. 1 after being appointed by Gov. Tony Evers, said in an interview she toured the plant's manufacturing facility and warehouse last week Wednesday and found it to be "a very well-run facility."
Asked about the company's prospects for earning all the tax credits it's eligible for this year, she said she didn't "want to postulate on their success or not, although I will say that they were confident and shared their confidence with me" that they would meet the requirements for obtaining the credits.
"It is clear to me that they want to be a partner with Wisconsin, they're dedicated to being here in the state and they're really excited about the opportunities that they have coming forward in their market," she said. "They feel really competitive, they feel like they’re continuing to grow. My impression is that they’re on an all out sprint to meet the demands of the marketplace."
Under the five-year deal, the company is eligible to receive up to $8.5 million in tax credits, or 30% of the overall amount, in its first year alone spanning from Jan. 1, 2019, to Dec. 31, 2019.
To get the credits, Kimberly-Clark must retain 388 employees at the Cold Spring plant — with an annual payroll of more than $30 million — through 2023 and invest at least $200 million in the facility. In all, the company would also need to keep 2,418 individuals employed full-time statewide. Kimberly-Clark can also earn tax credits based on goods and services it purchases from Wisconsin companies.
Now, the company has around 2,700 workers across the state and 450 employees at the Fox Crossing plant that manufactures hygiene products that include Depend undergarments and Kotex pads, Maturo said. But officials are looking to hire a total of 120 workers at Cold Spring in all, Maturo added, though the target is flexible based on business needs.
Of the 80 that have been hired so far this year, Maturo didn’t say how many came from the now shuttered Neenah Nonwovens plant. But he did say that “a number of new employees” had worked previously at other Kimberly-Clark locations.
The warehouse construction is expected to be completed by the end of next year, Maturo said, adding the building's exterior was recently finalized though work is underway on the interior.
The deal came about after Walker had called on the Legislature to pass legislation offering Kimberly-Clark $100 million in tax breaks similar to the ones the state is giving to the Foxconn technology company. The call followed the paper company's announcement that plants in Neenah and Fox Crossing were on a list of planned closures that would cut thousands of jobs worldwide and save the company hundreds of millions of dollars.
While the bill passed the Assembly, it languished in the Senate, leaving Walker looking for ways to strike a deal that didn’t require legislative approval.
The agreement calls for Kimberly-Clark to submit reports, jobs numbers, wages paid and records surrounding capital investments made and more to WEDC in order to get tax credits each year. The reports, which cover an entire calendar year, are due by March 1 of each year. The state has yet to award any credits to Kimberly-Clark.
Going forward under the agreement, the company is eligible to receive up to $5.8 million in tax credits next year, or the deal's second year; $4.9 million in the third year of the deal and $4.4 million in each of the fourth and fifth years, with the final year running from Jan. 1, 2023 to Dec. 31, 2023.
Most of the credits come from capital investments, which make up $20 million of the $28 million deal. Any unearned capital investment credits could be carried forward for the company to earn in the later years of the deal.