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Soundview plans to use N.J. tax credits toward power plant


The former Marcal paper plant is seeking to essentially use its $25.4 million in state tax credits toward construction of a cogeneration power plant on its site, a move that Lt. Governor Kim Guadagno endorsed Tuesday.

She toured Soundview Paper Holdings LLC, which purchased the struggling Marcal paper recycling and manufacturing facility in April, after meeting with its chief executive officer, George Wurtz. During the tour, Wurtz talked about the progress that had been made in terms of the power plant, and Guadagno for the first time voiced the state’s support for the initiative.

Soundview has received 35 responses to the request-for-proposals it issued earlier this year for the power plant, and is down to reviewing seven of them, Wurtz said. In January, Soundview will likely choose a vendor. If Soundview were to receive local approvals, it would take a year and a half to two years to build the plant, Wurtz said, with an estimated $25 million price tag for a 20-megawatt facility.

In order to keep Soundview from moving its operations, and 500 jobs, out of state this year it was awarded the tax credits under the state’s Grow New Jersey program. But Wurtz several months ago began complaining that the Garden State’s high electric costs remain a huge financial burden for Soundview. The paper facility’s previous owners filed for Chapter 11 bankruptcy protection in 2006, citing soaring energy costs for their financial woes.

So Wurtz proposed that Soundview construct its own power plant, generating power for itself and selling it to other companies, to cut costs.

Addressing Soundview workers, Guadagno said that she knew they had been through difficult times as various owners struggled to keep the plant afloat, hence the tax credits.

“We also have a $4 million grant on the table and we’re working very hard to figure out how to get a co-gen plant here so we can save on energy costs long term,” she said. “Good news for you is you’ll have a job short term, and maybe your kids will have a job in the long term if we’re able to put together the co-gen plant.”

The $4 million is a combined heat and power, or so-called CHP, grant. Wurtz said that Soundview is in the process of qualifying for that money “to help fund the power plant.”

Later, Guadagno was asked why New Jersey supports Soundview’s power-plant plans.

“The benefit to the state is the energy costs for this business come down so they can stay in business in New Jersey,” she said. “New Jersey is notorious for its high energy costs and they’re addressing that by putting this co-gen plant in … We’re working on it right now.”

Guadagno also mentioned that Soundview management said it planned to hire several hundred more workers in the next few years. In the next two years or so, Soundview plans to bump up its production and hire 100 to 300 additional employees, Wurtz said. It has 495 employees now.

Soundview is also working with the state to see if its power plant could provide electricity for local municipalities, such as Elmwood Park, Wurtz said.

Elmwood Park Mayor Richard Mola was also on the tour with Guadagno, and he’s thankful that Soundview and the state appear to have rescued the paper facility.

“It keeps people employed, and we always need jobs,” Mola said. And the local property taxes that Soundview pays “helps us out in town,” he added.

But Mola cautioned that any plans for a power plant would have to be approved by the borough planning board.