Updated Fri., 6/1 – Printpack Inc. announced Thursday that it plans to expand its operations in Rhinelander substantially-to the tune of $72 million.

The company, which predominately manufactures packaging for food products, made official it’s plans, in the works since January, to build a new facility in Rhinelander, and close existing plants in Rhinelander and Hendersonville, N.C. According to Terry Harper, the company’s Vice-President of Technology and Support, the decision to expand in Rhinelander is a direct result of the company’s positive experience with the workforce they employ locally. The Rhinelander plant employs 138, and the new facility will initially call for between 12 to 15 additional jobs, with room for future expansion. It is estimated that the “brick and mortar” portion of the building will come at an expense of around $32 million, with the remianing $40 million being invested in new technology.

“We have a lot of great experience in Rhinelander since we purchased the plant in 1989,” said Harper. “We have a tremendous workforce in Rhinelander that has always produced extremely well for the company.”

According to a press release put out by Printpack Thursday, the company plans to begin construction of a new plant in Rhinelander in the fall of 2012 as part of its strategy of aggressive reinvestment to improve production efficiency. The transition to the new Rhinelander plant will take place in the second half of 2013.

“The plan is to break ground in early fall of this year, with the hope of being fully operational 18 months from now at the latest,” said Harper. “When completed, the Rhinelander facility will be one of our largest producing plants.” Printpack owns 28 facilities around the world, including 20 in the U.S.

However, the price of expansion in the Northwoods does come at a cost, as with the additional capacity created by the new Rhinelander plant, it will be necessary to close Printpack’s Hendersonville, North Carolina plant and transition that business to the new facility in Rhinelander.

“With the new equipment we will be installing, there won’t be any need to operate two plants any longer,” said Harper. “You’re going to see a substantial increase in production out of Rhinelander once we are fully operational.”

The exact location of the new plant is yet to be determined, as the company has four separate parcels picked out within 5 miles of its current facility on Kemp Street. According to Harper, the company is close to a deal, but doesn’t want to let word out until it’s official.

“We still have some testing to do on the property we have in mind before we move forward with an official purchase,” said Harper. “We are working with the Oneida County Economic Development Corporation to find a suitable parcel.”

According to Roger Luce, the Executive Director of OCEDC, Printpack approached his corporation and the City of Rhinelander in January with their plans. Company executives were in Rhinelander in February to look at the prospective land parcels and talk about different tax incentives and municipal work the area could offer. The company was also considering expanding the facilities in North Carolina and Georgia, which would have meant closing the Rhinelander facility. Because of the sensitive nature of the negotiations, all officials involved were asked by Printpack to sign confidentiality agreements. In the end, though, according to Harper, the company’s positive relationship over the years with the Rhinelander community won out.

“It probably does make some fiscal sense to expand our operations in the southern part of the country, but you aren’t going to beat the production we get out of our workforce in Rhinelander,” said Harper. “The city and county have been very easy to work with throughout this process, which has just added to the attractiveness of staying in Wisconsin. We are extremely happy and excited with this decision.”

Yet to be determined is the future of Printpack’s current location on Kemp Street. According to Harper, the 180,000 square foot facility has been expanded and renovated so many times, it is “no longer conducive to industrial flow.”

“We’ve been working so hard on planning the new facility, we really haven’t even tackled what we’re going to do with the old building,” said Harper. “We’re open to suggestions.”

According to Luce, his corporation served as the facilitator, putting the company in contact with the city to discuss creating a Tax Incremental Funding (TIF) District for the new facility, and with the State of Wisconsin, which can offer tax incentives to new and expanding industries. Rhinelander City Administrator Blaine Oborn is working with Printpack to select a suitable location with the city providing the needed infrastructure/utilities including road access, water, and wastewater.

“We have a long history of working successfully as a partner with Printpack and are grateful they are expanding in our community,” said Rhinelander Mayor Richard Johns.

The city anticipates using the TIF to pay for the needed infrastructure and provide incentives for locating here in the Northwoods.

“I’ve been in almost constant contact with Blaine Oborn at the City of Rhinelander and Printpack’s plant manager, Pat Marquardt, since this started,” said Luce. “They have been very instrumental in this. This is truly something that was mostly negotiated at the local level.”

According to a statement released late Thursday by the State of Wisconsin, Printpack is eligible for a $1.7 million loan and $300,000 in tax credits for capital investment through the Wisconsin Economic Development Corporation (WEDC). In addition, WEDC and the Wisconsin Housing and Economic Development Authority will help Printpack obtain up to $12 million in New Market Tax Credits to support the company’s expansion.

Luce said that, once Printpack decides where it’s new facility will be located, OCEDC will purchase the property, and will swap it for a parcel of property located on River Road across from Foster & Smith in the industrial park. Luce said the industrial park property is too small for Printpack’s expansion, but would be suited well for a smaller industry.

“I’m actually already talking to a company that would be a perfect fit for that location,” said Luce. “We just have to get all the dominoes to fall right first.”

Still, Luce admits that his stress level has been high over the last few weeks as he waited for the company’s final decision. He believes this development will be a huge boon to the community.

“When you compare it to other projects, the Rhinelander Walmart was a $10 million project, and this is $70 million,” said Luce. “It was pretty much put to bed in five months, too. I’ve been in economic development for 30 years, and to be able to do a $70 million project in 5 months is amazing.”

Editor Craig Mandli is available at [email protected]