Now, Pactiv Evergreen wants a tax break
Pactiv Evergreen’s announcement that it would shutter its century-old paper mill was devastating enough for the tiny mountain town of Canton, but now the company is demanding a $14 million reduction in the assessed value of its real property — in essence, a tax break.
“The true value of the subject real property is substantially lower than the tax office’s appraised value,” reads an application submitted on behalf of Pactiv to the Haywood County Board of Equalization and Review. “Due to the age and design of the mill as well as the market conditions for paper mill transactions, the improvements have little or no contributory value to the land.”
This latest blow comes after a botched March 6 closing announcement, questionable stock sales by top executives and allegations by Gov. Roy Cooper that the company may have violated the terms of a $12 million state grant by closing before 2025 — all first reported by The Smoky Mountain News.
Currently, the assessed value of Pactiv Evergreen’s sprawling 185-acre complex is listed by the Haywood County Tax Assessor’s office at $19,791,400. The reassessment application says that the owner’s opinion of the value is more than 70% lower and that it’s actually worth $5,785,000.
At full value, Pactiv would owe Haywood County $105,884 in property taxes at the current rate of 53.5 cents per $100 in assessed real property value. At Pactiv’s requested value, the company would owe $30,950 — a savings of $74,934.
As in other Haywood County municipalities, the Town of Canton also levies property taxes to help pay for town services. Canton’s tax rate is currently 54 cents per $100, just a shade higher than Haywood County’s rate.
Likewise, at the full value, Pactiv would owe Canton $106,874 but at the reduced assessment sought by the company, that amount would fall to $31,239.
“On one hand I disagree,” said Canton Mayor Zeb Smathers. “On the other hand, I’m disgusted. These values do not add up with the value on the ground. I understand this is a business decision for them, but again, this has real world effects on our people and on the services we provide. And that’s more important than a balance sheet for Wall Street.”
Pactiv is still on the hook for this year’s payment at the full assessed value, so any changes would be reflected in the Jan. 1, 2024 tax levy.
Later in 2024, the county will again begin to reassess all real property in the county, as it did in 2021. During the 2021 reappraisal, most property owners saw increases of between 20 and 30%. The next revaluation will take effect for taxes levied on Jan. 1, 2025.
By then, a slew of indirect financial implications of the mill’s closing will become more apparent.
Not only will roughly a thousand good paying union jobs disappear, but the reduced local spending associated with those vanishing paychecks will ripple out into bars, restaurants, retail establishments and countless small businesses.
Other businesses that supply the mill, like loggers and chippers, will also take a hit.
The town of Canton expects to lose up to $2 million in revenue, or about 20% of its annual operating funds, reflected in the 2024-25 budget.
The company asserts in its application that there isn’t sufficient market demand for paper — one of the reasons initially given for the closing — and thus there isn’t sufficient demand for the parcel itself to be used as a paper mill.
There’s also been speculation that Pactiv isn’t likely to sell the parcel to another paper concern that could compete with Pactiv’s remaining North American operations.
In the application, Pactiv says its $5.8 million estimate is based on the highest and best use of the property, but that will be up to the Haywood County Board of Equalization and Review to determine.
Among other duties, the Board meets as needed and is scheduled by the county’s Tax Assessor, Judy Hickman. Hickman said that Pactiv has requested a meeting, which has been scheduled for Friday, June 2 at 9 a.m. in the Waynesville library. The meeting is open to the public.
Five members, along with one alternate, are appointed to the board each year by the Haywood County Board of Commissioners.
Current members of the board include Chairman Jimmy Flynn, Ted Carr, Evelyn Cooper, Margaret Ruff and Jonathan Sears. Skipper Russell serves as an alternate.
During the meeting, the board will hear the appeal, and Pactiv will present evidence supporting its assertion of the lower value. According to its application, Pactiv may present appraisal reports, market analysis reports, construction or remodeling reports, income and expense reports and a list of comparable properties.
The county appraiser who came up with the $19.7 million figure will also be present and may be called upon to explain how they came up with the figure.
If Pactiv doesn’t agree with the final decision, it could appeal to the North Carolina Property Tax Commission, a division of the Department of Revenue.
On March 8, Attorney General Josh Stein told The Smoky Mountain News that his office would do “everything in our power to help ensure that the mill complies with its legal obligations.”
When reached for comment on May 17, a spokesperson from Stein’s office, Nazneen Ahmed, said Stein’s stance hadn’t changed.
“We’re continuing to look closely at Pactiv’s legal obligations to its employees, the town of Canton, the county and the state,” explained Ahmed. “We intend to enforce all legal obligations the company has on behalf of the communities affected by the mill’s closure.”
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Pactiv Evergreeb is the local poster child for corporate greed run amok in America. I do hope the board hearing its request to re-appraise the property turns them down, or that it raises the property's assessed value so Pactiv has to pay even more in taxes.
Fine. $5 million it is. Then Canton can buy it themselves for that reduced rate and continue production on their own. Sounds like a pretty good bargain. Then Pactiv can have competition from a community owned business. Who knows, in a few years, Canton may be looking to buy in Arkansas.
$70k is peanuts for Pactiv and useful to the county. This is insult to injury.
Make them show their books - prove they lost money! Guarantee they can't do it!