Lumber mill near Live Oak expected to bring 350 jobs
Published: Friday, May 24, 2013 at 5:25 p.m.
Last Modified: Friday, May 24, 2013 at 5:25 p.m.
An Austrian lumber company plans to build a $130 million sawmill near Live Oak employing 350 people, a project touted as a shot in the arm to the local economy while also raising concerns about its impact on the timber supply and competing sawmills as well as its cost to taxpayers.
The Klausner Group would build the mill on U.S. 90 just north of Interstate 10 and another in North Carolina to turn Southern yellow pine into 2x4s and other dimensional lumber for the construction industry.
The mill is expected to have a $56 million annual economic impact and create an additional 600 jobs for suppliers and from the additional spending in the community, according to estimates by the Florida Department of Economic Opportunity (DEO). It also would be a boon to timberland owners, who have seen demand and prices for timber fall from the collapse of the housing market that has started to rebound.
The Klausner project is what Florida legislators had in mind when they created incentives to lure businesses to catalyst sites through the Rural Areas of Economic Concern program. The idea is to bring in companies that will draw additional businesses and provide enough jobs to have an impact that extends to surrounding counties.
Dennis Cason, president of the Suwannee County Economic Alliance, said he already is working with companies that could use Klausner’s byproducts — sawdust, wood chips, dry shavings and bark — such as pellet and plywood manufacturers.
“Probably within a couple years there will be several other companies out there,” he said.
To bring the Klausner Lumber One mill to Suwannee County, the state and county have committed to more than $5 million in incentives directly to the company. That includes $3 million in state money from the Quick Action Closing Fund for economic development projects and $1.7 million from the state Qualified Target Industry tax rebate with a $420,000 match from the county. Payouts from both programs depend on Klausner meeting performance goals such as the number of jobs created.
The county also is expected to give up 10 years’ worth of property taxes when Klausner applies for tax abatement.
Another $14 million in county, state and federal money will be spent when all is said and done to buy the site, prepare the land, widen and rebuild roads, add turn lanes, and build water and stormwater facilities.
Suwannee County Commissioner Phil Oxendine said county taxpayers are having to bear too much of the cost of the project.
The county has approved plans for Klausner’s first building — for log processing — and the company has to select a contractor that then can apply for building permits, Suwannee County Administrator Randy Harris said.
A Klausner spokeswoman did not reply to emails for comment.
Klausner would occupy 120 acres of the 175-acre site purchased by the county at U.S. 90 and 169th Road just north of I-10. According to Florida DEO estimates, construction will employ more than 500 people.
Cason said the mill will have a tremendous economic impact on the community, with lumber going out of the county — and even out of the country — and “fresh dollars coming in.”
“Those dollars turning over will increase business within the county,” Cason said. “It will allow businesses to hire people or rehire people. Restaurants will come. People will be able to do things — buy homes, buy cars that they were not able to afford before.”
Suwannee County lost about 1,000 jobs between 2007 and 2009, according to the DEO, but has since added nearly 2,000 to a labor force of nearly 19,000 people. Unemployment stood at 5.7 percent in April, compared with a state rate of 7.2 percent. The biggest employer is the Pilgrim’s Pride chicken processing plant with about 1,500 workers.
Klausner would pay an average annual wage of $30,000 compared with the county average of $25,182, according to a state report.
According to Klausner’s air quality permit application, the mill would include four blocks of kilns with 12 to 16 kilns each heated with hot water from four natural gas-fired boilers and two biomass-fired boilers that would use wood waste from the mill and from off-site sources. The mill also would include two saw lines, two planer lines, four sorting lines, two storage silos, two debarking units, one biomass boiler ash silo and five emergency generators.
The mill would have a maximum annual production capacity of 700 million board feet per year, although actual production likely would be a lot less.
In talking with people familiar with the project, forest utilization specialist Jarek Nowak of the Florida Department of Agriculture and Consumer Services said the mill is expected to produce 375 million board feet per year.
Nowak ran some numbers from the U.S. Forest Service’s Forest Inventory Analysis and determined that 138 million board feet of pine saw timber that is not currently being used by existing mills is available within a 100-mile radius of Live Oak.
Bryan Olmert, president of Loncala in High Springs, said the mill will be good for forest landowners and encourage them to start planting trees again after other sawmills closed in the region in recent years, including the Georgia-Pacific plywood mill in Hawthorne.
Loncala owns and manages about 50,000 acres of timber and agriculture land between Ocala and southern Georgia.
A study by the University of Georgia Center for Forest Business showed that demand for pine timber within an 85-mile radius of the planned mill fell 37 percent between 2006 and 2012, while the mill could increase demand by 61 percent.
Although home construction is starting to increase demand for saw timber, President Roland Stern of Great South Timber and Lumber sawmill of Lake City said it doesn’t make sense to open a large new sawmill in light of the other mills that have closed in recent years.
He said about a quarter of the sawmills in the U.S. have closed since the housing collapse and that the rest have cut back on hours.
Stern spoke out against so much government support for a mill that he said will hurt existing mills such as Great South.
Although there is plenty of timber supply now, he said he doubts there will be enough timber to supply the mill.
“You have the new biomass plant coming in at Gainesville before long, and that’s going to cut into the growing stock before it’s over with,” Stern said. “I really question whether the raw material will be here after a year or two.”
On the other side of the business, Stern said he hopes his logging crews can supply the Klausner mill.