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Fiber plant sale is final

January 25, 2002

Fiber plant sale is final



By DAN KULIN

dank@herald-mail.com

The sale of the paper recycling plant in Hagerstown to a Canadian company has been finalized, and a company official said Thursday that the plant could be running by the end of the year.

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With the sale, the City of Hagerstown and Washington County governments received more than $560,000 in back taxes owed by the former owners.

Vancouver-based Belkorp Industries bought the facility at Memorial and Eastern boulevards, and the equipment on the property, for $7.5 million at a bankruptcy auction in November. Mark Roseborough, a Belkorp vice president, said the Hagerstown plant will operate under a subsidiary company, Newstech MD, which also will be the new name of the plant.

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Belkorp's purchase of the property and equipment there was approved in December by a bankruptcy court in New York. The property was formally transferred to the new owners earlier this month, according to records at the Washington County Courthouse.

According to court records, the property was sold for $1,125,000.

Back taxes on the property had to be paid for the court to record the sale.

The county received $398,603 for real estate and personal property taxes, which are levied on items such as furniture, computers, and telephones. Some of the money was owed since 1999.

County Treasurer Todd Hershey said the county had been unable to collect those taxes because the previous company was declared bankrupt.

Hagerstown received about $162,000 for taxes owed for the fiscal years that began July 1, 2000 and July 1, 2001.

The city is still owed about $2.1 million for the construction of an electric substation and an upgrade of power lines for the paper recycling plant. City officials have said they are hopeful the sale of the plant means it will be restarted, and the debt paid.

The $220-million recycling plant, which has been known as 1st Urban Fiber and Hagerstown Fiber, opened in October 1996 and was in operation for less than a year. In December 1998, an involuntary bankruptcy petition was filed in court against the ownership group, Hagerstown Fiber Limited Partnership.

Roseborough on Thursday said the plant could be running again by late this year or early 2003. The start date could be sooner or later than that based on market conditions, he said.

Five people have been hired to provide maintenance and security at the plant. The plant will have 75-85 employees when it starts recycling operations, he said.

Once running, the Hagerstown plant will produce recycled paper pulp. The pulp will be sent to another plant to be turned into paper that could be used for newspaper inserts, he said.

Some Hagerstown plant neighbors and some city officials have worried that a byproduct of restarting the plant might be a bad odor that some said came from the plant before.

Roseborough has said the plant will not smell when they restart it, and if it does the company will fix it.

The mayor of Coquitlam, a Canadian city outside Vancouver where Belkorp has operated a recycling plant for 10 years, has said there have been no odor problems at that plant.

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