A team of developers in Washington has sued to foreclose on the 2,600-acre former Smurfit-Stone pulp mill site in Frenchtown and is asking for the chance to purchase the property.
Wakefield Kennedy, LLC, filed a lawsuit in Missoula County District Court on Feb. 28 in an attempt to force a foreclosure sale. The company has built fairly large apartment complexes and shopping centers, according to its website.
Wakefield loaned the current owners, M2Green and Green Investment Group of Illinois, $29 million in 2011 for the mortgage, according to the suit, and Wakefield alleges they defaulted on the loan.
According to minutes from a West Valley Community Council meeting last October and confirmed by a current council board member, Wakefield was also financially involved with a bitcoin company called Forgex that wanted to build a data center at the site. Those plans, however, appear to have stalled.
Wakefield alleges in the foreclosure lawsuit that they are now owed $61 million on the 2011 loan to the Illinois companies because of interest and fees. Wakefield says the loan is accruing interest at a rate of $33,600 per day, according to terms of the original deal.
Wakefield also appears confident that it will get its hands on the real estate, according to the listing text on its website under the heading “Missoula Development” in the category of “Current Projects.”
“Wakefield has secured the unique opportunity to create a development on reclaimed land in the rapidly growing area of Missoula, Montana,” its website reads. “Wakefield's vision for this development is to support the natural habitat, create jobs, expand infrastructure, and build complete communities while implementing renewable and sustainable practices.”
It says the site has the “potential for single family and multi-family housing, commercial mixed-use, industrial, and civic development.” Wakefield also notes the site has four miles of riverfront, “abundant natural resources” and up to 70,000 square feet of office and warehouse facilities.
The Smurfit site was a paper pulp mill from 1957 until 2010, when all the workers were laid off and the plant was shut down. Tons of hazardous chemicals harmful to humans and wildlife were used or produced there, and more than 900 acres consist of unlined ponds used to store treated and untreated wastewater and sludge from the mill.
The Environmental Protection Agency is studying the site and testing water and ground samples to determine if it should be declared a Superfund site and what cleanup actions need to be taken. M2Green and Green Investment Group bought the mill in 2011. They have never responded to a Missoulian request for comment, and have been silent about plans for the site for nearly a decade.
According to minutes from the West Valley Community Council last October, a man named Sean Cooper of a bitcoin company called Forgex presented a proposal to turn the Smurfit site into a data center. Diana Maneta from the County’s Community and Planning Services office said Cooper had not applied for any of the necessary permits.
Cooper told the council that start-up funding was provided by a joint venture between a California private equity firm and Wakefield Kennedy. Cooper also said he had put a downpayment on the $3.6 million worth of energy infrastructure upgrades the site would need.
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When audience members expressed concern about cryptocurrencies being used to buy illegal drugs, Cooper responded that "cryptocurrencies are decentralized and therefore provide a way to secure financial assets outside the reach of governments" and that "there are legitimate uses of cryptocurrencies as alternatives to currencies backed by governments," according to the minutes.
But Jeri Delys, a West Valley Community Council board member, said that site plan drawings presented by Cooper and a Wakefield representative were "second-grade level" and she hasn’t heard a word from either of them since that meeting.
Delys said the council was originally open to hearing about the proposal.
“It was a glimmer of hope that there would be economic development,” she said. “And the reason I sound bitter is that’s what’s happened for the history of this whole thing. We’ve been hearing government officials talk about economic development here for so many years. So you can understand why we don’t get excited anymore. It’s just been let down after let down."
The West Valley Community Council is interested in having a tax-paying business on the site, she said, because that money would go to the local school district and would fund the fire district and other services.
"The only thing we’ve seen happen out there is buildings getting demolished, nothing more," Delys said.
There is currently a cryptocurrency data center at the former Bonner mill, and the county last year considered a ban on cryptocurrency facilities due to noise issues and other concerns. The county decided against the ban in September, just before the proposal was made to the West Valley Community Council.
In February, Missoula County commissioners met with deputy county attorney Anna Conley to discuss a strategy to recoup $382,713 in back taxes M2Green owes on the site. In 2017, the county reached a settlement with Wakefield for more than $1.2 million in back taxes, because Wakefield owns the mortgage.
In the lawsuit seeking a foreclosure sale, Wakefield is asking District Court Judge Shane Vannatta to issue a court order determining that Wakefield’s mortgage is a first-position security interest, superior to any right, claim, lien or interest of other interested parties. Several other companies have construction liens filed against the property and the EPA has a federal lien filed on the property.
A representative for Wakefield said the company owner was on vacation and could not immediately respond.
Delys said she’s not holding her breath waiting to see if a new owner can redevelop the site. There is still a lot of clean-up that needs to happen before any residential development can get permitted there, she explained.
“I’ll believe it when I see it,” she said.