From CPP: Mill town in limbo. Helene leaves sale of closed Canton paper mill in doubt.

by Jane Winik Sartwell, Carolina Public Press
October 19, 2024

In Canton, a Western North Carolina town once defined by its paper mill, Tropical Storm Helene is the latest in a list of misfortunes. But Helene threatens to jeopardize the town’s glimmer of hope: the sale of the closed paper mill.

Tropical Storm Fred caused massive flooding in Canton in 2021. Then the mill closed, crushing the town. Now, the damage Helene wreaked on the mill and the town’s wastewater facility has the once-enthusiastic buyer — E.J. Spiritas Group — reconsidering its options.

“This storm had apocalyptic flooding in Canton,” Canton Mayor Zeb Smathers told Carolina Public Press.

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“A lot of our mill workers have found economic stability since the mill closed, but now that’s being tested because of the floods.

“But we flooded three years ago with Fred, so even though we sustained tens of millions of dollars of damage and five deaths in Haywood County, we are recovering faster than our neighbors. This isn’t our first rodeo.”

Closing the mill

The last four years have been a long haul for Cantonians, who live just west of Asheville along the Pigeon River. Their livelihoods, when not immediately threatened by storm systems, are in the hands of corporations who have interests and concerns of their own.

Back in 2015, mill owner Pactiv Evergreen signed a contract with the state: in exchange for staying open and maintaining job numbers, the company would receive $12 million from the state’s Job Maintenance and Capital Development Fund.

Then, after more than 120 years in business, the company failed to uphold its end of the bargain, closing Blue Ridge Paper Products in 2023. In a town of just 4,400 people, those 1,200 lost jobs were sorely felt.

“The decision to close the paper making operations at the Canton mill was difficult but necessary, and made after a careful evaluation of many factors, including the age and condition of the mill and fundamental market conditions,” Pactiv Evergreen spokesperson Beth Kelly told CPP in an email.

Though the mill has had some serious environmental issues over the years, it was once beloved by the people of Canton.

“These are people’s lives in our town,” Smathers said. “They are not just numbers on a spreadsheet.

“We were the last major manufacturing town in Western North Carolina. It was devastating to our economy, to our culture. I’m very proud of our people that we have been able to remain a blue-collar mill town without the mill. It speaks to the toughness and character of our people.”

Attorney General and Democratic gubernatorial candidate Josh Stein sued Pactiv earlier this year, demanding that the company repay every cent of the $12 million back to the state.

“We take our responsibilities as a corporate citizen seriously with respect to all our North Carolina facilities, having invested hundreds of millions of dollars over the last six years and supported more than 1,350 full-time jobs across the state,” Kelly said. “We attempted to work with the Attorney General’s office for more than a year regarding the JMAC grant and look forward to defending against the state’s claims through the legal process.”

On Oct. 10, a court rejected Pactiv’s attempt to dismiss the case. Stein called it a “baseless attempt to avoid paying back the state’s money.”

“Our office will keep fighting on behalf of Canton’s residents and NC taxpayers,” Nazneen Ahmed, Stein’s press secretary, told CPP in an email.

“Attorney General Stein was in Canton last week and met with local leaders. He’s committed to doing everything possible to support the community as it recovers from both the mill closure and (Tropical Storm Helene).”

In the absence of the mill, Canton has joined its Western North Carolina neighbors in the tourism game. Now, that too is threatened.

“Our driving economic force is tourism, and with it being the fall season, that usually brings us a lot of jobs, money and a lot of support,” Smathers said. “Now, Helene hit, and we don’t have manufacturing to fall back on. I found myself missing the mill a little more now.”

The Canton mill buyer and Helene

This summer, Pactiv Energy identified an interested buyer for the mill: E.J. Spiritas Group, owned by Missouri-based company Two Banks Development.

Eric Spiritas, owner of the Spiritas Group, was not promising to reopen the mill in full force, but to revitalize some manufacturing operations at the site by leasing out portions of it to tenants. The deal between Pactiv and Spiritas was set to go down Sept. 30.

Then, those late September forecasts began to look gloomier and gloomier. On Sept. 26, Spiritas said he wouldn’t formally close the mill deal without a 50% reduction in price. On Sept. 29, Spiritas took account of storm damage and demanded another price cut.

“This is solely and exclusively related to storm damage, and details related to storm damage,” Spiritas told CPP. One of those details is the damage to Canton’s wastewater treatment plant, which the mill depends on. The plant has since resumed operations.

Now, Pactiv has a lawsuit of its own against Spiritas for bailing on the deal.

“Pactiv Evergreen remains prepared to close the transaction per Spirtas’ contractual obligations and believes failure to do so will put site redevelopment and future job creation at risk,” Kelly said.

“We are pursuing all legal options to enforce our rights and ensure Spirtas fulfills his obligations to complete this transaction.”

But when CPP spoke with Eric Spiritas on Thursday, he expressed optimism about the deal.

“We are still contracted, and still working towards a close,” Spiritas said. “We just have some disputes going on with how that will happen.

“There is going to be manufacturing in Canton. There’s going to be a myriad of new development. The issue comes down to who will come — or who can come — considering what just happened.

“The wound keeps reopening: a flood in 2004, 2021 and 2024. We have to work with planned tenants of the mill around availability, access, and what is conducive for what type of manufacturer. People can be resilient, but they cannot continue to fight an unending flood.

“But we are going to be working hard to make the area right, build the area right, and get ourselves past this dispute.”

The issue of the area’s viability for development as flooding becomes more frequent and severe is a hot one. Certainly, any business coming to or remaining in the area is considering buying flood insurance. But is it possible that businesses may begin to distrust the area entirely?

“For potential businesses moving into the area, or even potential residents, it puts a risk on their radar that wasn’t there before,” Eric Heberlig, UNC Charlotte professor of political science and public administration, told CPP.

“This isn’t just the story of Western North Carolina, but of rural areas state- and nationwide. Traditional manufacturing industries have dwindled, and it’s a challenge to find other economic avenues to replace them. Western North Carolina has been successful in attracting tourism as a partial replacement for manufacturing, but not if hurricanes like Helene keep on like this.”

This article first appeared on Carolina Public Press and is republished here under a Creative Commons license.