The paper processing and paper packaging plants at the University of Missouri and Paper Mill of America are to shut their doors following a federal investigation.
The companies were among a dozen that received $40 million in taxpayer subsidies for the facility.
“We have a lot of work to do to keep our businesses in Kansas City,” said Jay Dufner, president of the Missouri Business and Industry Association, which represents paper processing companies.
“But we are determined to make Kansas City our city, our state’s city, and the country’s.”
Missouri Business, an industry group, said it will offer financial support to the affected businesses.
The city of Kansas City, which is home to many large businesses, has seen a string of paper plant closings in recent years.
In September, a Kansas City newspaper reported that three of the country ‘s largest paper processing plants were closing in the face of federal scrutiny.
The paper companies are based in Kansas, Missouri, and North Carolina.
The U.S. Department of Agriculture is investigating the paper plants, according to a spokesman for the USDA, which declined to elaborate.
A report from the Kansas Department of Labor says the companies received $20 million in state aid over the past five years, mostly through the Kansas City Industrial Development Corp. It said the companies had been operating under an exemption from state law.