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Hurdles remain in effort to bring manufacturing back to Libby

The Western News | July 6, 2021 7:00 AM

The next step in bringing a medium density fiberboard factory to Libby involves securing a line of credit for the Washington businessman local officials courted for the project, and are standing behind despite past legal troubles.

When officials announced the possibility of bringing a manufacturing plant to town earlier this year, they touted it as the denouement of a burgeoning public private partnership. State and federal agencies hope to thin the forestland around the region’s scattered communities and a processing plant is seen as one way to handle the raw material cast off by the effort.

And the factory could employ more than 150 workers in a county that routinely posts a higher unemployment rate than the rest of the state.

To ease the process of setting up shop in Libby, local officials are exploring ways to secure the dollars needed to bring the necessary equipment to the region.

Members of Lincoln County Port Authority Board on July 2 mulled over the possibility of securing a loan through the county for Corey Bitton, the business owner tapped to run the plant.

Commissioner Jerry Bennett (D-2) said he was examining the legality of the arrangement. Securing the roughly $600,000 needed for this next step was a “hinge point” in the project's development, he said.

The machinery Bitton intends to use is in a defunct plant in Dubuque, Iowa. The equipment came onto the market after the building that once housed the Dubuque plant was slated for redevelopment.

When announcing plans to construct the factory in May, Mark Peck, then the Libby representative to the county board of commissioners, said an engineering firm would first inspect the machinery. With support from the county, Britton could ship it to Lincoln County and set up shop in a large structure on port authority property commonly referred to as the Stinger building.

Speaking at the July 2 meeting, Peck, who now works as a shared stewardship coordinator with the port authority, said it might have been easier to stock the plant with new equipment. While the more costly option, it would have sped up the process, he said.

In a follow-up interview, Peck said that if the loan through the county were to materialize, the funds would not come from local taxpayer dollars. The county would draw from economic development funds or money from the U.S. Department of Agriculture.

Ultimately none of the financial support Bitton could receive would come out of the pockets of Lincoln County taxpayers, according to Peck.

“One thing we want to make sure of is we are not putting the county at risk financially here if it doesn’t work out,” said Peck during a June 24 interview.

While local officials say they are working with Gov. Greg Gianforte’s office to find other sources of funding, specifics have yet to materialize. Peck said officials considered using dollars from the American Rescue Plan Act, a federal economic recovery bill enacted earlier this year, to back the project. They also are exploring new market tax credits as a way to support Bitton’s operations.

Details on the purchase of the Stinger building are still in the works.

Already grappling with the complexities involved in luring a manufacturing endeavor to Libby, officials learned of another potential headache last month: Bitton’s criminal history.

In 2007, Bitton pleaded guilty to mail fraud, wire fraud and aiding and abetting in a Washington state federal court. He was sentenced to three years of probation for both the mail fraud charge and wire fraud and aiding and abetting counts, which ran concurrently.

The fines and surcharges for each case were $1,350. Bitton had to pay $25,000 in restitution to the Washington State Department of Revenue in the mail fraud case.

The charges stemmed from Bitton’s management of a restaurant and catering business he owned in Pasco, Wash.

Bitton “materially and falsely understated his revenue” for four months in 2000, according to court documents, leading to the mail fraud case. When planning to sell the business in mid-2000, Bitton prepared and submitted false financial statements, which overstated his gross revenue and net income from the operation leading to the wire fraud and aiding and abetting cases.

Following the July 2 port authority meeting, Bennett and Peck said previous convictions against Bitton, recently brought to light by the Kootenai Valley Record, had not complicated the project. The pair said they were unaware of the convictions.

Both said the state officials had reviewed the cases and were not concerned.

Peck said he expected more specifics on the project to emerge within the next couple of weeks.

Plans for the fiberboard plant came to light when Gianforte toured the port authority in May. Peck anticipated the factory would employ roughly 40 workers per shift. Considering transportation and supporting work, operations could offer between 150 and 200 jobs. When running, the plant would be valued between $60 and $80 million.

By processing wood from local fuel reduction projects, the factory would draw from an already abundant source of raw material.

“Traditionally, you’ve got a big sawmill sitting there and you’re trying to get the forest to meet the needs of the mill,” said Peck. “We’ve got an opportunity here to change that paradigm where we’re putting wood products in here at a manufacturing capacity that meets the needs of the forest.”

During the tour, Gianforte said his office would look into ways of supporting the factory.

“This is the sort of project we’d like to support,” the governor said in May.