Citing environmental concerns, Liberty Diversified International’s (LDI’s) chairman and CEO informed the city of Brainerd Tuesday it was no longer interested in a possible purchase of the Wausau paper mill in northeast Brainerd.
News of Liberty Diversified’s interest in the plant became public late Friday when the Brainerd City Council scheduled a meeting for Thursday to allow LDI officials to make a presentation on their plans. That meeting has now been canceled.
Brainerd Mayor James Wallin said Tuesday that to describe the latest development as disappointing would be an understatement. Wallin said he learned of Liberty Diversified’s decision Monday but wanted to wait until the firm formally communicated that message to the city before announcing it.
Council member Gary Scheeler said Tuesday he was extremely shocked at LDI’s decision, since the firm had consistently shown interest in the possible purchase of the plant. Officials with the Wausau plant, which ceased its paper production in April, and city and economic development officials had been seeking a new owner since then.
“It (the negotiation process) was at a snail’s pace but at least it was going forward,” Scheeler said.
Scheeler said it appeared possible environmental problems at the site were a key factor in the company’s decision.
In his correspondence to the city, Mike Fiterman, chairman and CEO of LDI, which owns Liberty Paper Co. of Becker, wrote “the challenges of making the mill productive and profitable in a very competitive industry together with the environmental risks were too great to allow us to move forward.”
Fiterman wrote that some might ask the question what the city could have done differently and he would say nothing.
“Everyone in the community from the school district to the public utility company to city staff to BLAEDC worked diligently to find ways to make this project feasible,” he wrote.
Sheila Haverkamp, executive director of the Brainerd Lakes Area Economic Development Corp. (BLAEDC), shared a separate correspondence she received from Fiterman in which he thanked members of the Brainerd community with whom he had worked and once again cited environmental concerns.
“As we came to discover in discussion with you, the major hurdle we were never able to totally get over was the potential environmental liability of the site,” Fiterman wrote. “As we analyzed the costs to operate with both electric and steam sources of energy as well as maintain an older facility, it became apparent that with only 150 to 160 thousand tons of annual production to offset these costs, we would not be able to compete in the markets we hoped to pursue.”
BLAEDC issued the following statement:
“BLAEDC was optimistic and hopeful that Liberty Diversified International (LDI) would be able to develop a business plan for the Brainerd Paper Plant. For several months LDI officials, with the support of representatives from BLAEDC, the City of Brainerd, and our state and federal elected officials, have dedicated significant resources and expertise to this venture. Their vision and strategy offered a long-term sustaining operation that would be of tremendous economic benefit to our community. We were saddened and surprised by the announcement that LDI has discontinued its efforts to acquire the Brainerd Paper Plant. BLAEDC stands ready to assist LDI if there is any change in the feasibility of the Brainerd location for LDI’s operations. The Brainerd Paper Plant task force, which was working closely with Liberty, will continue its efforts to secure a use for the facility and bring economic development to our area.”
Wallin said that if environmental problems are discovered at the Wausau site, there might be superfund money available to solve that problem.
“The only thing is that’s an unknown,” Wallin said. “Wausau only has owned ... (the site) ... for a couple of years. Who would be responsible? Could they go back to Potlatch?”
Wallin said he believed an environmental study was done when Wausau Paper bought the property but that it was only conducted on a limited area. The mayor said the current plant is set up to make paper products but the city might not have a lot of options in that realm.
“There’s nobody clamoring to get in the door,” Wallin said.
Pat Medvecz, vice president of manufacturing for Wausau Paper, could not be reached for comment Tuesday.