| Erie Times-News
IRG founder Mitch Hecht has plans for plastics recycling plant in Erie
Mitch Hecht, founder of International Recycling Group talks about plans for a plastics recycling plant in Erie on the former International Paper site.
Jack Hanrahan, Erie Times-News
Nineteen years after International Paper Co. closed its Erie plant, a new buyer has plans for a portion of that property.
In an exclusive interview with the Erie Times-News, Erie-based International Recycling Group has announced that it has an agreement to buy 25 acres of that property, now known as SB3 Industrial Park, from Erie Management Group.
A new $100 million, 200,000-square-foot plastics recycling facility, which IRG describes as the most technologically advanced in the world, is expected to open in early 2023 and to initially employ about 50 people.
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The plant would be located on former IP property on the south side of East Lake Road, not on the main manufacturing site that had been operated by Hammermill Paper Co. then IP.
Initial plans call for processing 275,000 tons a year.
No sale price has been disclosed. Mitch Hecht, the founder of IRG, said the sale of the property along East Lake Road, will likely be finalized in a few months.
“We are thrilled,” Hecht said of the purchase agreement. “It’s a beautiful site, very clean environmentally, not a lot of problems.”
“It has a rail spur that is going to help us on transportation and it’s in an established industrial corridor with direct access to the bayfront.”
At the same time, he said, “It’s far enough away from the lakefront that we don’t run into any sensitivity with folks who are not that interested in having an industrial production site (near the lake).”
The bottom line, he said, “It fits the bill.”
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The SB3 Industrial Park is already home to Hero BX, the largest producer of biodiesel in the Northast, medical marijuana grower and processor Calypso Enterprises and Prism Glass Recycling, all founded, owned and operated by Erie businessman Samuel P. “Pat” Black, III, and his daughter Sumi James-Black.
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Total traffic flow through the plant is expected to be about 50 tractor-trailer loads a day.
Depending on costs, sorted and ground plastic leaving the plant could be trucked or moved across the lake on barges.
In a joint news release, EMG and IRG, said the landscaped building “will look like a typical light manufacturing plant or will perhaps resemble an e-commerce distribution center from the outside.”
SB3 Park is located in one of Erie’s eight designated low-income federal Opportunity Zones. That means investors in the project can qualify for special tax incentives if they use capital gains to invest.
Erie Insurance and the Erie-based Plastek Group already have pledged an investment of $9 million in the project. A portion of that investment comes from Erie Insurance’s Opportunity Zone investment fund.
Hecht said he sees the ability to benefit from Opportunity Zones as an incentive, but not the primary reason someone might invest in the company.
“Right now there is a lot of interest by impact investment funds. There is a lot of interest in putting green dollars to work,” he said.
“What we are finding is people are really investing in the potential of the business,” Hecht said. “It’s not so much about tax incentives driving the investments.”
James-Black, interim CEO of EMG, sees advantages to working with another company with a similar mission.
In addition to Prism Glass, Hero BX diverts millions of gallons of waste oil out of landfills by producing 250 million gallons of biodiesel at five U.S. plants.
“The logistical networks that IRG will create relative to inbound and outbound materials could generate opportunities for additional industry, new innovations and ultimately more jobs,” she said in response to emailed questions. “Our team enjoys working with Mitch and his team, and we want the relationship to continue and grow.”
Since announcing plans for the project in August, Hecht has stressed the potential benefits to both the Erie community and the cause of plastics recycling in general.
“The local plastics industry is under pressure by their customers, mostly the consumer products companies, to put a higher and higher percentage of post-consumer recycled material into their packaging,” Hecht said. “The fact is that material isn’t available today in large enough quantities.”
What makes IRG’s business model different is that the company plans to accept all kinds of unsorted plastic, collected from within a radius of about 750 miles, and expects to mechanically sort and find uses for all of it.
In 2019, IRG announced that it had signed a memo of understanding with Canada-based steelmaker StelCo Inc.
IRG will sell the company a proprietary blend of plastics – including plastics for which there is not currently a reliable market – that can be used to offset coke in the production of iron oxide.
“Our model is to welcome any and all types of plastic,” Hecht said. “We expect if you have any end-of-life plastic in your home that is waste in your home, everything from a shopping bag to a pen, if it’s made of plastic we will have an environmentally safe way to take that plastic and have it avoid a landfill.”
Some, however, have questioned the environmental impact of plastics recycling.
In a September letter to the editor, Jacquelyn Bonomo, CEO of the environmental group PennFuture raised questions about the wisdom of the planned facility.
Bonomo wrote: “Is expanding further into the plastics industry, so connected with local pollution and pollution all over the globe, the right path for a city and region that are trying to reinvent themselves into a greener, cleaner and more equitable community?”
Hecht said he thinks some of those concerns have been addressed.
“We had a really great meeting with a number of the leading folks in the community who are concerned environmentalists as we are,” Hecht said. “I think we have reached out to clarify and correct some of the misconceptions about and what we intend to do.”
Erie Mayor Joe Schember praised the announcement in a prepared statement.
“My team and I are very excited about this new development by IRG,” Schember said. ” Not only does it bring new, family-sustaining jobs to Erie, it will also keep all plastic out of area landfills by implementing new, innovative recycling methods.”
Contact Jim Martin at [email protected] Follow him on Twitter at @ETNmartin.
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