Tax incentive approved for Kzoo packaging plant with conditions

KALAMAZOO, Mich. (WOOD) — Kalamazoo city commissioners have approved a controversial tax incentive for the expansion of a paper packaging plant. 

The incentive was approved Monday night with an amendment adding several conditions requiring the company follow through on its commitments to make significant progress on addressing emissions and odor issues.

Graphic Packaging International will have to comply or the commission could remove the incentive at year one, two, three or year six. If the company is meeting the guidelines, it could have the incentive extended at year six for a total of 12 years. The tax savings for GPI over that period is approximately $1.6 million.

The city says the incentive provides a 50% tax break for GPI on the expansion project.

The company says it will create 1,000 jobs during construction and will invest $600 million in the plant. 

Many residents spoke against approving the incentive, saying the plant currently emits dangerous pollution into area neighborhoods and has created a strong unpleasant odor.

The state has cited the plant for eight odor violations within the past 10 years but has never issued a fine. State officials from the Michigan Department of Environment, Great Lakes, and Energy are currently investigating a 2019 complaint and are requiring an independent study.

Graphic Packaging International in Kalamazoo. (Aug. 27, 2020)

People who live in the area say the pollution has led to other health conditions and some have filed a class-action lawsuit.

David Benac of Kalamazoo was one of the residents who spoke against the project in a public comment portion of the virtual meeting. 

“This company has a long record of contaminating our air quality and having been reported, sued, fined for that contamination yet has not chosen to do anything significant about it. If it was an issue that was important to the company, it would have been addressed at this point,” Benac said.

The company says it has devoted millions in the project to address odor concerns and that it will continue to work on the issue.

Andrew Johnson who works in government affairs and sustainability for GPI addressed commissioners and answered questions.

“We are not viewed as the community partner we aspire to be and we heard feedback about Graphic Packaging is leading some people to question our commitment to the community with respect to the odor concerns,” Johnson said.

James Baker, the director of public works, says the city will make additional upgrades to better process the sewage coming from the plant and reduce gases in the process. Additional odor sensors will also be added, including one in the northside and eastside neighborhoods.