Has the Green Investment Group sold Missoula down the river? 

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Yet in examining GIGI's projects, the same theme keeps emerging: Not much is happening. As in Missoula and Frenchtown, people seem guardedly optimistic that jobs will return to the former industrial sites. They're puzzled, yet hopeful. Is the hope misplaced?

'We're ready for some nice, new redevelopment'

Ray Stillwell is a lawyer and entrepreneur. In 2001, he incorporated Alton Steel, which acquired a shuttered steel mill in Alton, Ill., a city of about 28,000 on the Mississippi River, about 15 miles north of St. Louis. Alton Steel restarted production at the mill in 2003. Stillwell sold his stake in the company in 2005 and used the proceeds to launch the Green Investment Group with Mark Spizzo, the company's executive vice president, who had worked in economic development in Illinois for two decades. In 2006, GIGI acquired its first property, a 235-acre former Smurfit-Stone mill in Alton.

Six years later, there's "nothing happening" at the site, says Monica Bristow, director of the RiverBend Growth Association, an economic development organization in southwest Illinois. "Why? We're not sure."

Bristow says no jobs have been created other than for scrapping contractors. The mill was completely razed. All that remains is an empty service garage.

Stillwell says GIGI had hoped to transform the site, which it named America's Center Industrial Park, into an ethanol plant to work in conjunction with a nearby Conoco-Phillips refinery, but that project has been shelved.

GIGI acquired its second former Smurfit-Stone mill, in Circleville, Ohio, in 2006. Through its subsidiary CircleGreen, the company received a $750,000 grant from the Ohio EPA to remediate a 26-acre section of the 300-acre property. The mill on those 26 acres, which sat at the entrance to the town, was demolished.

"For the most part, we have a level, cleaned, new green space and we're ready for some nice, new redevelopment," says Ryan Scribner, director of the Pickaway Progress Partnership, the economic development agency for Pickaway County, where Circleville is located. As for jobs, there have been none, Scribner says—"unless you count the folks working for the demo company and the folks who did all the environmental remediation."

Stillwell says he expects the Ohio Environmental Protection Agency to approve the environmental cleanup soon, which he hopes will spur more interest in the site. For now, the ag giant Cargill is leasing some of the land for corn storage, he says.

GIGI bought its third Smurfit-Stone mill, in Carthage, Ind., in 2009. "We haven't progressed very far there yet," says Jim Finan, director of the economic development organization in Rush County, where Carthage is located. "The feedback we've gotten is that [redevelopment] is the plan but they're working in other arenas first before they focus their attention on this particular site."

Finan says no jobs have been created there. He calls the 180-acre site a "dinosaur": it's about 10 miles from the interstate, and he thinks its age, the condition of the facilities and the required environmental cleanup will deter prospective businesses. He's wondering why GIGI bought it.

click to enlarge The EPA is determining whether to designate the 3,200-acre Frenchtown mill property a Superfund site. Every year for 50 years, the mill generated an average of 20,000 tons of sludge containing a medley of papermaking chemicals that was put in onsite ponds and landfills next to the Clark Fork River. - PHOTO COURTESY OF PETER NIELSEN
  • Photo courtesy of Peter Nielsen
  • The EPA is determining whether to designate the 3,200-acre Frenchtown mill property a Superfund site. Every year for 50 years, the mill generated an average of 20,000 tons of sludge containing a medley of papermaking chemicals that was put in onsite ponds and landfills next to the Clark Fork River.

Stillwell says progress has been delayed in Carthage due to a fire allegedly started by a demolition company GIGI hired. The fire burned down buildings GIGI hoped to preserve, which led to litigation that's ongoing.

GIGI's success stories are in Canada. The company bought two former Smurfit-Stone mills in Quebec in January 2010. At one, in Portage-du-Fort, Trebio, a company that makes wood pellets, has leased part of the 2,200-acre site, making up the majority of the 175 new jobs there. Stillwell and Spizzo reportedly own part of Trebio.

GIGI's other Quebec mill site is in New Richmond. Part of its 225 acres are now occupied by Fabrication Delta, which uses the space to make masts for wind turbines, employing about 150 people, according to Elie Arsenault, a Fabrication Delta manager. He says the arrangement is "going perfect."

GIGI also acquired a mill in Bathurst, New Brunswick. That site, too, is vacant.

Stillwell says GIGI only owns former Smurfit-Stone mills because he and Spizzo "have always enjoyed a good working relationship with the Smurfit folks."

'Headed for insolvency'

Tom Dauenhauer worked at the Frenchtown mill from 1981 to 2006. He served as a purchasing agent, storeroom supervisor, shipping supervisor and paper machine supervisor. After leaving the mill, he became a real estate agent. His familiarity with the mill made him well suited to broker a deal when Smurfit sought to sell the property. He worked with several prospective buyers. According to the lawsuit Dauenhauer filed earlier this year, Stillwell and Spizzo approached him in February 2011.

Meanwhile, Smurfit-Stone was nearing a deal to sell the mill for $12 million to Tim Ralston's company. Dauenhauer wasn't involved because Ralston "was a known 'scrapper,' interested only in demolishing the site," the lawsuit says.

In March 2011, Dauenhauer met with Stillwell and Spizzo, who were interested in purchasing Ralston's contract. During that meeting, Dauenhauer says, he presented Stillwell and Spizzo with an agreement: He was to be paid three percent of the $12 million purchase price of Ralston's agreement—$360,000. He'd also get five percent of the roughly $19 million in non-traditional financing GIGI secured from Wakefield Kennedy, LLC to buy the mill. That's another $950,000.

Stillwell confirms that GIGI obtained financing from Wakefield Kennedy, which is a subsidiary of Wakefield, a large Bellevue, Wash.-based residential and commercial real estate development company owned by Steve Malsam and Len Evans.

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