Kimberly-Clark plans to close its Everett Mill and Pulp operations this spring after the company was unable to reach an agreement to sell the mill to Atlas Holdings.

Kimberly-Clark, the producer of Kleenex tissues and Huggies diapers, said Thursday it expects to close the mill by the end of March and will start scaling down operations starting in two weeks.

The company announced in January that it was seeking a buyer for the roughly 80-year-old mill. In September it said the mill would close if a deal wasn't arranged. It announced discussions with Atlas this fall, and many expected a deal to go through.

Details of the negotiations with Atlas are confidential, but officials say environmental issues in part prevented the companies from reaching an agreement.

"There were several points that we couldn't resolve, but the most recent one, which certainly had an impact, ... was the fact that there were some complex environmental issues related to the east waterway that came up very late in the process," said Bob Brand, director of external communications of Dallas-based Kimberly-Clark, who could not elaborate because the negotiations were confidential.

The mill has more than 700 employees, 250 of whom would likely have been rehired by Connecticut-based Atlas if an agreement had been reached, said Josh Estes, president of Local 183 of the Association of Western Pulp and Paper Workers, which represents some of the mill's workers.

Estes said Atlas began handing out applications and making offers to some salaried staff last week. He says mill employees have relationships with the community, such as volunteering and serving on the boards of nonprofits and credit unions, and that the closure will affect the area's economy.

"It's a truly sad day, because all of those things that we've worked so hard for will essentially disappear," Estes said. "The amount of money that we pump into this community alone is going to be a very difficult thing for them to lose."

Employees will receive a severance package and other closure benefits, Estes said. They were notified Thursday of the plans to proceed with the closure.

Eric Jacobson, a two-year employee of the mill who has a 1 ½-year-old daughter and mortgage, hopes to be hired by Boeing.

"I have a very uncertain future," he said. "It's a little bit scary right now."

He said the business and charitable donations the mill brought to the area will be missed.

"It's going to hurt a lot more than just the 750 that's been named," Jacobson said. "The money that's paid out here to employees circulates a lot through this area."

The United Way of Snohomish County has received more than $2 million in contributions from the mill and its employees since 1998.

"Many of the workers at the mill come from families that have worked there for generations," said Dennis Smith, president and CEO of United Way of Snohomish County in a prepared statement. "This is truly a great loss for our community."

Brand said the mill will be demolished after it closes and probably prepared for redevelopment.

Material from Seattle Times archives was included in this report.

Alexis Krell: 206-464-3263 or akrell@seattletimes.com