Billerud U.S. Production expects to transform its Escanaba mill to produce a more technologically advanced paper product known as paperboard or cartonboard. (Billerud Americas Corporation photo)

LANSING — Michigan Gov. Gretchen Whitmer on Tuesday signed a $1.1 billion spending bill that includes $200 million to support Billerud’s planned transformation of its Escanaba paper mill.

The support assumes a $1 billion investment by Billerud to serve as a cornerstone of the company’s expansion into North America.

“We thank Gov. Whitmer, the legislature, and the Michigan Economic Development Corp. for their investment support for Billerud’s planned transformation of our Escanaba mill into a world-class paperboard production facility,” said Billerud Americas Corporation President Rob Kreizenbeck. “We look forward to continuing to collaborate with our partners in government to facilitate our investments for the benefit of the Escanaba community, Upper Peninsula and the state of Michigan.”

A pre-feasibility study about Billerud’s conversion of the Escanaba mill to paperboard production is ongoing and planned to be completed in the first half of 2023, after which the company’s board will make an investment decision.

“This is truly a historic opportunity for the Upper Peninsula,” said Marty Fittante, CEO of InvestUP, a private sector-led economic development organization. “We would like to express our appreciation to Billerud for its consideration in making this generational investment in Escanaba. The mill when transformed will not only benefit the region’s economy and the environment with its best-in-class sustainability standards but provide notice that the U.P. can and will compete in attracting advanced technology opportunities.”

InvestUP took the lead on legislative strategy, advocacy and stakeholder outreach for the project, Fittante said.

“”It was made possible with incredible leadership and commitment from Gov. Whitmer, Senate Majority Leader Winnie Brinks, Speaker Joe Tate, and MEDC CEO Quentin Messer, as well as the hard work and advocacy of senators John Damoose and Ed McBroom, and representatives Jenn Hill, Greg Markkanen and David Prestin,” he said.

The $200 million funding follows additional incentives recently approved by the Michigan Administrative Board, including approval of a Forest Products Processing Renaissance Zone. The designation allows the mill to abate taxes on the 1,932 acres for the next 15 years, at a rate of roughly $1.96 million annually between local and state taxes.

North America is one of the largest and fastest growing markets in primary fiber containerboard and carton board, Fittante said. The transformed mill is expected to retain an estimated 800 jobs with an anticipated annual economic impact of $153 million in earnings and $18 million in taxes paid, he said.

The project will also require a significant number of contractors during the construction period.

The mill has been making paper since 1911 and has an estimated $360 million annual economic impact on the area.

The supplemental spending bill signed by Whitmer also includes:

— $150 million for affordable housing.

— $100 million for community revitalization and development projects.

— $75 million for blight elimination.

— $75 million for small businesses hurt by the COVID-19 pandemic, with at least 20% granted to minority-owned businesses.

— $50 million to increase the supply of housing stock for construction or rehabbing.

— $25 million for job training and other occupational supports.

— $15 million to remove barriers to employment for at-risk individuals.

— $25 to create the Water Shutoff Prevention Fund.

— $1.5 million to fund the Independent Citizens Redistricting Commission.