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Red Rock sues Riversedge Developments for over $2 million

Riversedge appealed the assessment of the former paper mill's value

The Township of Red Rock has launched a lawsuit against Riversedge Developments, seeking $2,270,000 for property taxes it alleges are owing from the current owner of the former Norampac mill property.

The claim has not been proven in court. It was originally filed in Superior Court in Thunder Bay last March, but was only confirmed this week by Red Rock Mayor Gary Nelson.

Riversedge, based in Sault Ste. Marie, bought the 243-hectare site from the township for $10 in 2014.

Riversedge said it was looking to build a wharf that would allow a new manufacturing enterprise to ship biomass pellets out of Red Rock, but the project never materialized.

In an interview Monday, Mayor Nelson said the old industrial site "looks like a war zone. so we're going to take them to court to try and get some of our back taxes, at least, or try and get them back into town to clean the place up."

In a statement to Tbnewswatch, Riversedge CEO Justus Veldman said he can't comment "as the tax matter is before the courts and MPAC," but the company intends to defend against the action.

Veldman appealed the Municipal Property and Assessment Corporation's valuation of the mill property for tax purposes, on the basis it was no longer an operating paper mill, but "just an empty industrial landfill."

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According to Nelson, MPAC has since lowered the assessment, but the township "has still never gotten a thing" from the company.

Veldman's statement Tuesday added that he's working with provincial environment ministry officials "to come to a conclusion and solutions to an environmental mess left behind by the previous owners" of the mill site.

He also owns the Red Rock Inn. Veldman said his company continues to invest in the community, and called the hotel "a great example of when you work hard and double down, it's possible to do good work in these abandoned-by-large-industry towns in Northern Ontario."

Riversedge Developments acquired the former Resolute pulp and paper mill site in Fort Frances last year.

The company and Rainy River First Nations recently announced a partnership to redevelop the properties.

A news release stated the two parties, in collaboration with the Town of Fort Frances, will work over the next year to define the most viable and best end-use for the site.

Shortly after it completed the transaction with Resolute, Riversedge announced it was looking at the feasibility of establishing a cannabis production facility in Fort Frances, and was working with "world-renowned" cannabis production partners. There have been no subsequent announcements related to that initiative.