HENDERSON, Ky. — Henderson prevailed in a competitive, secretive process to secure a new $400 million facility planned by Pratt Paper, which plans to employ 321 people at the site within five years.
Among other communities wanting to land the facility was one just across the Ohio River in Indiana. A Posey County location near the Port of Mount Vernon was in contention.
It’s hardly surprising that a company eyeing the Tri-State for such a major project would consider multiple sites close to one another, said Greg Wathen, co-CEO of the Evansville Regional Economic Partnership.
“It’s not uncommon for them to look at both sides (of the river). This just happens to be one where we were competing,” Wathen said.
More: How did Henderson land Pratt Paper LLC's $400M plant that will employ 321 people by 2026?
On one hand, it was a competition, but on the other, it wasn’t. Wathen emphasized that Pratt Paper’s decision to build in Henderson is clearly “a win for the region," and that often, people traverse county and state boundaries to work.
Tara Barney, co-CEO of E-REP, attended Kentucky Gov. Andy Beshear’s official announcement of Pratt Paper's Henderson expansion. But E-REP — which was formed earlier this year in a merger of three legacy organizations — considers Gibson, Posey, Vanderbrugh and Warrick its core focus area.
“When it comes to economic development projects, normally we work with our core partners (the four Indiana counties),” Wathen said. “That said, with (this project), we did try to assist with Henderson with regard to looking at the broader labor issue.
“We’re the same Metropolitan Statistical Area, we share the same labor shed, and so they (Pratt Paper) were asking a lot of the same questions of both of us,” Wathen said. “Candidly, we were trying to work through, with both Henderson and us, how do we address some of those questions, knowing full well that there’s competition for where the project would ultimately land.”
The Mount Vernon site remained in the running for the paper mill late in the process, said both Wathen and Henderson Mayor Steve Austin.
Wathen recalled being in Princeton April 28, the day Indiana Gov. Eric Holcomb appeared at Toyota Indiana to announce an $803 million expansion of the plant which the company expects to bring 1,400 new jobs.
He hustled away from that ceremony early to a meeting in Mount Vernon with Pratt Paper officials.
Both communities had detailed talks with Pratt Paper about how to get utilities to their sites. Wathen and Austin agreed it was a complicated part of the project and that, likely, it played a role in the company's final decision.
“The company uses a lot of water and sewer, and a significant amount of natural gas,” Austin said. “It’s been a process, but it’s very much worth the time. We got really good cooperation with the company itself. Our initial proposals, they liked. They liked the way we worked with them and did business, and they were very cooperative as well.”
The Posey County site, meanwhile, is open and viable for companies looking to expand, according to Wathen, who noted the Port of Mount Vernon is the sixth-busiest inland waterway.
"Posey County has a massive amount of assets," he said.
How to fill hundreds of new jobs?
Beshear’s in-person appearance to make the announcement was a testament to how big the paper mill project is for Henderson. The governor said it’s believed to be Western Kentucky’s largest jobs announcement in 25 years.
Compensation will total an average of $39 per hour, counting benefits, officials said. The operation will cover about 1 million square feet on 200 acres of land, and construction is to begin in September. The site is on Kentucky 425/South Bypass between U.S. 60-West and U.S. 41-Alternate.
Pratt Paper is part of Pratt Industries, which describes itself as “America’s fifth-largest packaging company and the world’s largest, privately-held 100% recycled paper and packaging company, with more than 10,000 highly-skilled, green-collar employees dedicated to the environment and sustainability.”
Pratt posted sales of $3 billion in the U.S. in 2019, according to a 2020 article in the trade publication PPI Pulp & Paper Week.
Just as Toyota Indiana will be challenged to fill its hundreds of promised new jobs in the current tight labor market, so will Pratt Paper. Austin, however, noted there’s substantial lead time before the plant opens.
“We’re going to work with our school system, vocational unit and college, and we’re going to try to get people directly involved with jobs this company needs," the mayor said. "We may bring in some equipment where people can train on what this company will be using. We want to involve young people."
Pratt Paper has many other U.S. facilities and likely will transfer some workers into Henderson.
"I know one thing I talked to this company about (Thursday) is, we probably in a couple years are going to need a couple hundred more living spaces, and these could be apartments, condos or single-family homes," Austin said.
The jobs announcements in recent months by Pratt Paper and Toyota Indiana underscore why the region fights for a new Interstate 69 Ohio River bridge, Wathen and Austin said.
Beshear, during Thursday's announcement, repeated his support for the new bridge. State officials in Kentucky and Indiana have approved the financing needed to build approaches to the site chosen for the span.
Pre-construction activities have started in Henderson County.
Fiscal Court, City Commission OK incentives
During special called meetings Friday morning, Henderson County Fiscal Court and the Henderson City Commission approved a list of incentives for Pratt Paper.
The county and city joined in the issuance of Industrial Revenue Bonds estimated at $400 million, the estimated cost of construction and financing of the project. The public issuance of bonds enables Pratt Paper to obtain lower interest rates than the company otherwise would receive.
In lieu of taxes to the city and county, Pratt — beginning in the 21st year after the bonds are issued — will make annual payments and will continue until the first year that no bonds remain outstanding.
The 20 years of waived property taxes is the largest local incentive Pratt Paper is getting, according to Henderson officials.
Each payment will equal the amount of property taxes that would otherwise be due and payable by Pratt Paper LLC to the city and county if the bonds were not outstanding on the property tax assessment date for such tax year.
“Payment in lieu of taxes to other Henderson county taxing entities including the Henderson County schools will be covered as part of the Industrial Revenue Bond,” the memorandum of understanding reads.
Also, Henderson Fiscal Court will specifically provide to the City a road fund grant of up to $1 million for the construction of access roads to the property.
Beth Smith of the Gleaner contributed to this report.