Fort Frances has been rallying over the past few months to get the idled paper mill here restarted.
On Monday, many were upset to learn that Resolute Forest Products sent a letter to Mayor June Caul saying the company had rejected the bid from Rainy River Packaging Inc. (formerly known as Repap Resources) to purchase and restart the mill here.
Resolute said Rainy River Packaging’s bid fell short and it now is entering into an agreement with a community re-developer that will contemplate the demolition of the property.
Fort Frances Coun. Douglas Judson said while the news is disappointing, he’s not surprised.
“Resolute’s actions, statements, and behaviour over the past several months have not disclosed any inclination on their part to sell the facility to an entity that would operate it,” he remarked.
“I’m not surprised,” he added. “I think we all held out hope that this offer would be successful but at the end of the day, they have stuck to their guns.”
Coun. Judson said everything to date has indicated Resolute has no true intention of having the mill restarted–from the statements they made in the media regarding concerns around wood fibre to the non-disclosure agreement that prevented Rainy River Packaging from entering into formal negotiations.
“All of these steps appear to be militated against hammering any attempt for a buyer of the facility that would operate it and thus require access to wood fibre,” he stressed.
While Coun. Judson hasn’t gone through line by line to see if the areas of the bid that Resolute identified as problematic were accurate, he has said some of the statements around the non-disclosure agreement in the company’s letter that rejected the bid “were somewhat disingenuous representations.”
“I think at the end of the day, the letter discloses that this was the only offer from an entity that would operate the facility, so presumably it was the offer for the most amount of money,” he remarked.
“The offer that they had accepted is the community redeveloper, who I would presume–based on what has happened to other closed Resolute facilities–is purchasing this facility below fair market value.
“Essentially, they’ve made a strategic decision here, presumably to sell this facility for less money than they were offered,” added Coun. Judson, which he assumes is due to wood fibre.
“At the end of the day, they’re putting those corporate interests ahead of the public policy interests in having those local wood resources support our local community.”
But Coun. Judson told the Times that town council still is fighting to restart the mill and there still is hope for a positive outcome.
“Resolute’s letter states that a potential buyer such as Repap, or now Rainy River Packaging Inc., could enter into discussions with the redeveloper about a future use or acquisition of the facility,” he noted.
“So it might be that the redeveloper becomes somewhat of a middle man and perhaps the facility can still transition to a new buyer or can be used in some way.
“We have yet to see or understand whether Resolute’s agreement with the redeveloper allows them to transition this facility to someone who would want access to wood fibre,” Coun. Judson conceded.
“They may have tried to prohibit that.
“But time will tell and certainly they’ve represented in their letter that it’s a possibility,” he noted.
Once the redeveloper assesses the mill site and the costs associated with remediation efforts, it may decide it’s in its interest to sell to Rainy River Packaging, Coun. Judson said.
“To rehabilitate this property into a different use . . . is going to be a pretty significant project in light of the realities of the site and its history, and the various safety measures and investigations that need to be undertaken,” he explained.
“At the end of the day, the existing facility is obviously a big job creator when it is operational and so we’re going to continue to push for a operational future for that facility and I think that we’re not completely sunk just yet.
“I think that all of us on council want local residents to know that they should keep heart in that there’s a lot of tools still at our disposal,” he added.
Coun. Judson cited the town’s jurisdiction with respect to site plan control and the enforcement of bylaw requirements for any redevelopment of the mill property.
“That’s not done in a malicious manner,” he stressed. “The reality is simply that we’re talking about an industrial property that’s been that way for over 100 years, so there’s going to be a number of restrictions on how that is transitioned to a new group.
“I think that the province has clearly signalled its support for this facility operating, and so I would imagine that there may be some hesitancy at the provincial level to provide support for the redevelopment of their site for a different purpose, which may also create some difficulties for their plans.”
Local MPP Greg Rickford told the Times on Monday that the fight is not over and there still is hope to reopen the mill.
He said he’s spoken with Resolute and part of his conversations focused on the prospect that there still could be an option for Rainy River Packaging.
“I’m focused on trying to support that and put in place anything that they need to move forward,” Rickford noted.
“There were deemed to be business shortfalls by Resolute and I haven’t ruled out working with Rainy River Packaging to look at what they require to make their business case compelling.”
Over the next little while, Rickford said his focus will be on any deal that would bring back jobs to the forestry sector here.
“There’s a very unfortunate set of longstanding circumstances related to this mill and I’m going to make best efforts to ensure that we leave everything on the field . . . that we tap whatever resources and support that we can to give Fort Frances an opportunity to have an asset in their community that is involved in the forestry sector,” he pledged.
“It’s a win for Fort Frances; it’s a win for the region.”
Rickford said he will be meeting with town council at his nearest availability to debrief and plan out next steps they can take so Fort Frances is at the table in the forestry sector moving forward in 2020.
“I just want to thank the community members who have called me and been most appreciative of their support in the initiatives I’ve been doing,” he remarked.
He also thanked the mayor and council, and the local economic development team, for their work throughout this effort.
“We just need to stay confident in the prospect that we can make something happen,” Rickford said.
Mayor Caul said whether or not the mill successfully is re-opened, wood rights still need to be designated to Fort Frances so that any business–be it a lumber yard or pellet plant–can start operations here.
“That has been the big message all the way through this,” she stressed. “We want the government to allow us to have that wood back so we can be open for business again.”
Mayor Caul noted the province was hesitant to guarantee rights to wood fibre to Rainy River Packaging, or any other buyer, until it saw a business proposal and didn’t want to jump in until an offer was on the table.
The announcement to guarantee wood fibre to a successful bidder came a day before the deadline of Resolute’s competitive bidding process, making some town residents question if the province’s actions are sincere since other potential bidders didn’t have up-to-date knowledge around wood rights.
Others have raised concerns around the Sustainable Forest Licence that Resolute holds.
“Resolute’s licence for the Crossroute Forest says that they’re suppose to provide wood for the Fort Frances mill and I think they’ve always been able to technically comply with that even after they closed the mill,” Coun. Judson noted.
He said this has been done by saying that they are providing fibre to the Fort Frances mill, it just so happens the mill is closed and doesn’t need any.
But Resolute can’t comply with the licence if there is no mill here.
“They’ve now entered into agreements that contemplate the demolition of the property, so I think that really raises the spectre of what’s going to happen with the wood fibre and I think that the fibre should come up for auction and . . . be available to a new entrant,” Coun. Judson stressed.
“It strikes me as deeply troubling that this mill was closed five years ago and only now, less than a year before the licence for the Crossroute Forest transitions to a new licence framework, which actually gives control to communities and local stakeholders, does Resolute make a move to have it demolished.
“It essentially seems like a play to ensure that even when our communities get control over our local forest, we can’t put them to productive local economic use and that’s deeply troubling.”
Meanwhile, council’s working group on the mill sale met yesterday to discuss its next steps.
“I think we’re kind of in a bit of a holding pattern in the pursuit of more information at this point, but we still have tools at our disposal and we’re going to use them,” Coun. Judson reiterated.
“We’re going to use everything in our power to ensure that our local economy is supported by a stable, equitable supply of wood and that the economic benefit of our resources are not transacted away from us by a private corporation,” he stressed.