HAMILTON — International Paper's plans to close its Knightsbridge complex could mean a reduction of about $1 million a year to city coffers if a buyer cannot be found.

        Emergency services — paid for out of Hamilton's $34 million general fund — could take a significant hit, city officials said. The city's annual budget is $222 million.

Plans to close the Champion office complex could cost the city of Hamilton $1 million a year. (Dick Swaim photo) | ZOOM |

        “The city's bottom line will be drastically affected. The general fund will be severely hurt,” Mayor Adolf Olivas said between meetings with IP officials.

        With the elimination of the 350 jobs, Hamilton is expected to lose more than $500,000 in payroll taxes, city officials said. Last year, Hamilton collected about $21 million in income taxes, with IP contributing about 2.3 percent of the total. Economic Development Director Tim Bigler said IP pays the city about $400,000 in real and personal property taxes annually.

        “To me, it's a short-term thing. We have to deal with it,” Mr. Bigler said. “We knew something was going to happen one way or the other. We have to move on.”

        City Manager Steve Sorrell said IP's decision “most likely will result in a complete analysis of our revenue stream and the services we provide. And it will probably result in some sort of retrenchment procedure, where we're going to have to change some of the things we do in order to be able to get by until we replace the International Paper facility.

        “It will certainly have a pervasive impact on all four of the utilities, which are gas, water, electric and waste water,” he said, because Hamilton operates its own utilities. “But the impact there will be much more limited than it would be on the general fund.”

        Councilman Dick Holzberger said IP's announcement Thursday “saddens me.”

        “IP has had zero allegiance to the city of Hamilton. They were offered many attractive incentives by the city, county and state to remain here, but chose to pack their bags and exit,” said Mr. Holzberger.

        He said the city had instituted a hiring freeze in anticipation of IP's decision.

        Mr. Olivas has called a special council meeting for noon today to discuss IP's decision.

        Mr. Sorrel is optimistic that someone will buy the Knightsbridge facility, which has more than 400,000 square feet of class A office space.

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