A kind of détente has been achieved between the Town of Fort Frances and the new owners of the former Resolute Forest Products pulp and paper mill.
The numbered company linked to Riversedge Developments has opened a 90-day window of opportunity for interested companies to take an inside peek of the shuttered mill buildings to determine if a return to manufacturing is possible.
The municipality and Riversedge, the Waterloo-based brownfield redeveloper, issued a joint release on Oct. 3 of an agreement that will settle the issue of close to a half-million dollars in unpaid property taxes in exchange for allowing outside suitors to tour the mill.
“I take it as a win,” said Mayor June Caul. “It gives us another three months to try to flush out somebody who might be an interested buyer.”
Resolute closed the operation in 2014, resulting in the loss of 150 jobs.
In the years after, the town had been pushing for the plant to be returned to paper production, while gradually developing a distrustful and acrimonious relationship with the Montreal-headquartered papermaking giant.
The northwestern Ontario border community has been championing a potential startup company, Rainy River Packaging, to buy the property, which only agitated Resolute which prefers a confidential sales process.
Riversedge Developments, Resolute’s preferred choice, later acquired the mill along with several area properties in July.
Fearing Riversedge would demolish the mill, the town said it would refuse the company a demolition permit and months later went after the brownfield redeveloper for unpaid property taxes by issuing a seizure notice.
In early September, Riversedge owed the municipality close to $490,000 on the 30 individual properties around town. The properties could’ve been sold at auction.
The seizure notice also stipulated that none of the assets on the properties could be removed.
That gave Fort Frances the leverage it needed to start three weeks of negotiations with Riversedge to do one final push to allow outside suitors to view the mill.
“I think it definitely opened a door that we were serious about keeping this mill up and running, if at all possible,” said Caul.
"We let them know we’re invested in this for our community and our residents and potential employees that it could possibly hire.”
Want to read more stories about business in the North? Subscribe to our newsletter.
Caul said they’ve made an arrangement with Riversedge to address the overdue tax situation.
Another sore point with Fort Frances has been over local wood supply.
But Caul is now doubly pleased with recent comments made by Kenora-Rainy River MPP Greg Rickford, Ontario’s energy, northern development and mines minister, that fibre from a nearby Crown forest will be made available for any new forestry player that comes to town.
The municipality has accused Resolute of monopolizing the fibre supply on the Crossroute Forest to feed its other mills in northwestern Ontario.
“If at the end of three months there is no one (interested in the mill),” Caul said, “hopefully, we’ll be able to sit down positively with the numbered company (Riversedge) and see how things play out.”
Riversedge Developments CEO Justus Veldman isn’t convinced the mill site has a future in papermaking, calling it “highly unlikely” given that no new buyer has come forward for five years.
But he wants to be supportive of the town’s wishes, calling the agreement an “olive branch” that he hopes will strike up a better relationship with the municipality.
“I’m the last person that wants any false hope out there in the community, but we do respect the will of the people, and if people want more time, here you go.”
The process to assess any qualified bidders will be a joint effort with the municipality, Veldman said.
“Although we may not believe that the mill can be operated, if someone comes along and can create jobs – not by me – why would I stand in the way?”
Veldman said all of his Fort Frances properties are up for sell or lease, including a landfill if anyone wants to buy it.
Though he’s fielded calls about the mill since acquiring the properties last summer and has met with some undisclosed parties, Veldman said he hasn’t received any formal offers yet.
“We’ve met with people who want to make brown paper, packaging paper that does not compete with Resolute, and Resolute is happy to allow it happen.”
He said it wouldn’t be in violation of the restrictive covenant agreement his company signed with Resolute.
Some dilapidated rolling stock, like loaders and dozers from the buildings, has been removed from the mill site, but no heavy machinery or anything “fixed to the building," he said.
Soon after buying into Fort Frances, Veldman floated the idea of a commercial cannabis operation through a press release, but explained he doesn’t have any formal development plans or vision for the land, repeating a familiar phrase he’s uttered in acquiring other Northern Ontario mill sites.
“These are never my plans. They have to be community plans.”
Since signing the agreement, Veldman said the line of communication with the town has improved “100 per cent” and he credits CAO Doug Brown with being instrumental in bringing them together.
Caul similarly expressed confidence that the relationship with Riversedge will improve but admitted that the last few months of lobbying, with council and her working group, to protect the mill to try and restore local manufacturing jobs has been “a very stressful and trying time for me, personally.”
“I really believe that we have done the best we can do in a terrible situation for our residents and that’s who we answer to.”
