Real (estate) problems: Concerns emerge over what Pactiv Evergreen might leave behind

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Real (estate) problems: Concerns emerge over what Pactiv Evergreen might leave behind

The hulking mill complex in the center of Canton isn’t the only piece of property owned by Pactiv Evergreen. Cory Vaillancourt photo

The 185-acre paper mill at the heart of Canton is the most visible sign of Pactiv Evergreen’s corporate presence in Haywood County, but they also own dozens of other parcels worth tens of millions of dollars.

If the company moves ahead with its stated plans of closing the mill by summer and then further divests from the county, many of those parcels could become prime real estate, or cause for concern.

Blue Ridge Paper Products, a subsidiary of Pactiv Evergreen, is still the owner of record for 36 parcels totaling almost 680 acres with an assessed value of $33,223,000.

Some are odd slivers of unusable land, like a 25-foot wide, 900-foot long strip between Fibreville Street and the Pigeon River. Others, like the handsome grey stone building on Park Street in downtown Canton, could hold some commercial value despite being in a flood zone.

Still others could pose safety hazards or become ecological disasters if they’re allowed to degrade.

The landfill

The largest and probably least-known parcel — a subject of great concern — is a 244-acre landfill off Incinerator Road just south of Interstate 40.

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David Francis, Haywood’s economic and community development director, said that the county has been in meetings with North Carolina’s Department of Environmental Quality about the site.

“They’re already on top of all that — how the post-closure responsibilities go,” Francis said. “It’s an industrial landfill, and they’re saying post-closure monitoring has to take place, just like we do with our municipal waste at Francis Farm.”

Shortly after the county’s Francis Farm landfill entered service, the Resource Conservation and Recovery Act of 1976 mandated that solid waste landfills like Francis Farm would have to be constructed with an impermeable liner.

Since Francis Farm wasn’t, it started to leak into the surrounding area. Costly remediation took place and has since dramatically reduced the amount of exfiltration at the site, but the county’s still on the hook for monitoring costs for another three decades.

Francis said that won’t be the case with the Blue Ridge Paper landfill, which he says is lined.

“It would be up to Blue Ridge/Evergreen,” he said of costly monitoring activities.

Lake Logan

Nestled deep in the mountains of southern Haywood County, scenic Lake Logan was once used as a corporate retreat for company executives and for company functions, like picnics. It even featured a small airstrip.

The retreat itself was sold to the Episcopal Diocese of Western North Carolina back in 2000 and has since become an attraction of its own as a conference center, hosting festivals and summer camps and the like.

The diocese owns much of the land surrounding the lake, right up to the waterline, and some private owners hold parcels near the shore. The state owns land surrounding the entire settlement, but Blue Ridge Paper still owns the 102-acre lake itself, along with a 9-acre parcel at the north end where the lake’s dam regulates water flowing into downtown Canton and into the mill.

Pactiv Evergreen hasn’t been responsive to media inquiries about activities related to the Canton mill’s closing, so it’s not yet known what might happen there.

Waynesville

In addition to the Canton mill, Pactiv Evergreen operates a facility in Waynesville, tucked in between the Great Smoky Mountains Expressway and Howell Mill Road.

When company executives told workers on March 6 that the Canton mill would soon close for good, the Waynesville facility was also mentioned.

Byron Racki, president of beverage merchandising, said during the meeting that the facility, which sits within Waynesville’s extraterritorial jurisdiction, wouldn’t immediately close but would see substantial job cuts of perhaps two-thirds or three-fourths of its workers.

Racki also said that Pactiv Evergreen was exploring strategic alternatives for the 260,000-square foot facility, built in 1960 on 35 acres.

If one of those strategic alternatives is to close it down completely, it may not be easy to fill.

Five years ago, Haywood’s chamber of commerce entered into an innovative deal with the Asheville Area Chamber of Commerce to co-market Haywood’s available sites alongside Asheville’s. One of Haywood’s most attractive, the Beaverdam Industrial Park, still has capacity.

The deal thus far has produced a lot more interest in Haywood’s available sites, and the county’s come close to landing “the big one” several times, but it still hasn’t happened, and Haywood taxpayers are out around half a million dollars to the Asheville chamber for the effort.

But there is some hope, according to Christopher Chung, CEO of the Economic Development Partnership of North Carolina.

“Notwithstanding the news in Canton of course, the past few years have been characterized by what I would say is an unprecedented level of overall [economic development] activity,” Chung said.

The EDPNC performs a number of actions that fall under the economic development banner, including export assistance, and tourism and travel marketing, but most of it comes down to recruiting or retaining businesses.

At any given time, the EDPNC is talking to hundreds of companies about a potential investment that would create jobs in North Carolina.

Out of all those conversations — it’s about 230 right now, Chung thinks — there’s a fair number that start with companies asking the EDPNC to help identify potential real estate across North Carolina where they could theoretically place their operations.

“Most of what we’re dealing with right now does tend to be industrial manufacturing. We’re not seeing a lot of office-related projects. Ninety-plus plus percent of what we’re working on right now has some kind of industrial end use,” he said. “Two-thirds to three-quarters of them actually start off looking for an existing, vacant facility.”

Chung hasn’t yet visited the building but said that generally, it should draw interest if it becomes vacant.

“If it’s a modern, high-quality facility, there’s a good chance that’s going to get quickly on someone’s radar screen,” he said. “Is it going to be a fit at the end of the day? It’s hard to say, but at least it’s probably going to get some consideration — it’s certainly going to get more consideration than a community that does not have an existing building right now.”

The Mill

The Canton mill itself certainly qualifies as a mega-site, with 185 acres straddling the Pigeon River and an external perimeter of nearly five miles.

It could end up languishing for years as a public safety nightmare. The massive industrial buildings there could be torn down, or left to rot. But as long as the company continues to pay its property taxes and obey all other laws and ordinances, it’s theirs to do with as they wish.

“Of course, we still need a willing seller at the end of the day and I would hope that the Pactiv people understand that this is devastating for the people who’ve depended on this for decades. I’m sure Pactiv understands that, and I’m sure to the extent they can they want to do something to soften the blow,” Chung said. “Part of that would be, in my own opinion, working closely with the local economic development groups, state entities and other partners who can help them find another user or another use for that facility so that at least some amount of investment and jobs can eventually be replaced.”

But if it’s not being used to generate profit for the company, it ends up as nothing but a costly balance sheet liability. If that’s the case, there would be several challenges involved with marketing the property.

The entirety of the site is in an area subject to periodic flooding, as in 2021 when the Pigeon River rose to near-record levels, inundating the town.

And, it’s a highly specialized site; Pactiv Evergreen cited the cost of upgrades as one of the reasons for the mill’s impending closure, so it’s unlikely there would be another buyer to swoop in and resume the same — or similar — operations.

Selling the mill to a competing paper company doesn’t seem to make much sense, especially in light of comments from Pactiv Evergreen that the industry is suffering.

Of the 230-ish projects Chung’s EDPNC is working right now, he estimates that one in six are in the automotive sector — specifically, vehicle electrification — 1 in 10 are food and beverage or agribusiness-related and another 1 in 10 are biotech or pharmaceutical production.

“I’m sure we’ve had paper products facilities looking in North Carolina but it doesn’t jump out as one of the top three or four sectors where we’re seeing constant activity,” Chung said. “That doesn’t mean the next phone call couldn’t be that product again. What we see today in the pipeline is by no means an indicator of what the future looks like. It’s just this snapshot in time.”

For prospective buyers, the EDPNC has a set of tools in its toolbox that could make the site more attractive.

“There are things we can do in terms of tax incentives, training incentives, infrastructure development dollars, things that would hopefully make it more appealing for a company to locate there,” said Chung. “And if Pactiv is a willing seller, then those are all the ingredients we’re going to need to have a shot at getting another user on some part of this property.”

The floodplain considerations and resulting insurance implications along with associated operational disruptions are considerations for any potential buyer’s risk management department, but there’s another unique challenge that would merit some due diligence.

The Town of Canton’s wastewater is treated by mill employees, on site. Getting that issue settled is urgent, both for the Town of Canton’s needs and for possible repurposing of the site.

“One of the most important things with economic development going forward is, we’ve got to get the town stabilized with a wastewater treatment facility,” said Francis.

There’s still a contract between the mill and the town that requires a two-year notice before employees stop treating the waste, which doesn’t leave much time for the town to seek other options.

“The two years is a nice little breather to have,” Francis said, “But as Nick [Scheuer, Canton’s town manager] and I were talking yesterday, if we’re not working on this every day, you’re going to see just how monumental the problem is.”

Haywood Rep. Mark Pless told The Smoky Mountain News last week that he’s seeking $35 million for a new treatment plant that’s not on Pactiv Evergreen’s property.

Francis said there may be some Community Development Block Grant funds available and that the county is working with federal funders from the U.S. Economic Development Administration trying to secure funding, but right now Canton doesn’t have the land, doesn’t have the money and doesn’t have the permits.

“We’ve got to turn the don’ts into dos,” Francis said. “We have no choice anymore.”

Canton Mayor to address Asheville group on mill developments

AVLmeetup, a networking group for Asheville’s real estate professionals, will host an exclusive Q&A session with Canton Mayor Zeb Smathers about the city’s future as the century-old paper mill makes plans to halt operations. The event will take place on Tuesday, March 28, beginning at 5 p.m. at the Hilltop Event Center, 21 Restaurant Court, in Asheville. Learn more at avlmeetup.com. RSVP at avlmeetup.com/rsvp.

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