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But a Superfund designation is possible. Nielsen notes that many of the pulp mills in the Pacific Northwest that have closed over the last decade have landed on state or federal Superfund lists. The mills that bleached paper, as the Frenchtown mill did, tend to have the highest cleanup costs—in the tens or even hundreds of millions of dollars.
GIGI has absolved Smurfit-Stone of environmental liability. In its contract with Smurfit-Stone for the Frenchtown mill, it agreed to "assume and perform, satisfy, pay and discharge all debts, actions, causes of actions, lawsuits, claims, demands and other liabilities and obligations of every kind and nature, whether past, present or future, known or unknown, fixed or contingent, arising from or relating to the property or the environmental conditions in, on, under or surrounding the property or any of the improvements thereon."
In addition, per the agreement, GIGI holds an environmental liability insurance policy that also covers Smurfit-Stone. "It's not just us saying we're going to take care of it," Stillwell says. "We actually collateralize that...with insurance." He says all seven of GIGI's deals with Smurfit-Stone included environmental indemnity.
The Frenchtown mill site is by far the largest and most contaminated of GIGI's properties.
"I've always speculated that maybe this is part of the reason that [GIGI] set it up this way—to try to shield Smurfit from liability," Nielsen says. "It may have worked at other sites, to some extent, but this one is going to be a bigger can of worms."
Under state and federal Superfund law, the government can sue Smurfit-Stone and all other prior landowners to pay for the cleanup; the law says that liability can't be avoided through contract clauses. But the clause would allow Smurfit-Stone to sue GIGI and seek to transfer Smurfit-Stone's obligation.
How GIGI would pay for it is unclear. If its insurer won't pay, or if the company can't pay—if it goes bankrupt, for example—Smurfit-Stone would be back on the hook. But in early 2011, the paper manufacturer RockTenn purchased Smurfit-Stone, complicating the situation further.
The question of environmental liability gave Montana an excuse to try to stop Smurfit-Stone's deal with Ralston for the Frenchtown mill site, yet it was a non-issue when GIGI acquired the site. GIGI is "more familiar with this kind of cleanup work," Montana DEQ Director Richard Opper told the Indy last year, "so I think we're probably more comfortable with the ownership as it worked out, but the needs haven't changed, nor has the state's commitment to pursue this."
If the EPA doesn't dictate a certain level of cleanup, Gov. Schweitzer says the state will: "We want to make sure, whether it's water quality issues, air quality issues, asbestos—all of those things—that they're [addressed] correctly, because the fastest way to assure that a site like this will not be productive in the future is to put ourselves in a position where we have environmental concerns and companies are saying, 'Whoa, whoa, whoa—I'm not coming in there until...it's completely cleaned up.'"
Still, such a cleanup could be a task of Herculean proportions, on par with the Milltown dam removal upriver. It's long overdue.
'Jobs and opportunity inside'
In 1957, Waldorf Paper Products of St. Paul, Minn., opened a $6 million wood pulp mill on 3,200 acres along the Clark Fork River, three miles south of Frenchtown. It began with 78 employees, producing 250 tons of pulp a day, which was used to make liners for cardboard boxes. Wastewater was sent downriver, until the next year, when complaints of fish kills, foam and discoloration forced the company to build wastewater storage ponds.
In 1960, a $6 million expansion upped production at the mill to 450 tons of pulp and 150 tons of bleached pulp a day. Capacity more than doubled again in 1966. By then, Waldorf Paper Products had merged with Hoemer Boxes. Hoemer Waldorf dug more ponds for the increasing wastewater. More than five million gallons of it was discharged into the Clark Fork every day from the 700 acres of ponds.
In 1977, Champion International bought the Frenchtown mill and invested about $170 million over three years to boost capacity to 1,850 tons per day. Stone Container Corp. bought it in 1986. By 1993, production reached 1,900 tons per day. Stone Container merged with Jefferson Smurfit in 1998, creating Smurfit-Stone Container, which became one of the world's largest paper-based packaging makers, though the merger saddled the company with billions of dollars of debt.
In the early 2000s, demand for cardboard boxes began to decline. Manufacturing was heading overseas. Smurfit-Stone shut down one of the Frenchtown mill's three paper machines. "The manufacturing sector of our economy produces goods which need to be packaged and transported," the mill's general manager, Bob Boschee, told the Missoulian in 2003. "If those goods are not produced in the United States, then they are not being packaged in the United States."
Smurfit-Stone began closing mills and purging workers around the country.
In 2008, the Frenchtown mill laid off 52 workers. In early 2009, with a debt load of more than $5 billion, Smurfit-Stone filed for bankruptcy protection. In late 2009, the company said it would close the Frenchtown mill. In January 2010, 417 workers, with an average salary of about $70,000 a year, worked their final shifts. The jobs represented about four percent of Missoula County's economy. The mill had been the county's second-largest taxpayer.
Smurfit-Stone emerged from bankruptcy in mid-2010. In early 2011, RockTenn announced it would purchase Smurfit-Stone for $3.5 billion. Before the deal closed, Smurfit sold the Frenchtown mill.
On May 4, 2011, Gov. Schweitzer again stood in front of the mill, this time with Missoula Mayor John Engen and Missoula County commissioners, to announce that the Green Investment Group, through its subsidiary M2Green Redevelopment, had bought it—not Ralston.
"We're here to announce that a scrapper will not tear down this plant," Schweitzer said. "That gate will open, and there'll be jobs and opportunity inside."
Ray Stillwell, GIGI's president, said at the time, "As with all of our projects, our main goal is to work with the community and local officials to develop a site that complements the other industries in the area and meets the economic needs and interests of its people by creating jobs in sustainable growth industries."