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Going with the flow: Canton, developer ink interim deal to maintain wastewater service

The wastewater treatment facility at the former Pactiv Evergreen paper mill site in Canton has been a significant concern since the mill's closing was announced in March 2023. The wastewater treatment facility at the former Pactiv Evergreen paper mill site in Canton has been a significant concern since the mill's closing was announced in March 2023. Google maps photo

Canton’s toilets will continue to flush thanks to an agreement born of urgency but put on paper with cooperation and cautious optimism.

After a closed session discussion on May 8, the Town of Canton Board of Aldermen/Women approved an interim agreement with Two Banks Development to ensure the continued treatment of municipal wastewater, staving off a potential public utility crisis following the closure of the town’s long-time partner in sewage processing.

The agreement comes two months after Blue Ridge Paper Products, LLC, successor to Champion Papers, formally terminated a 60-year-old wastewater treatment agreement with the town. That agreement, signed in February 1964, had allowed the town to send its sewage to the privately-owned wastewater treatment plant on the former paper mill property at almost no cost to the Town.

“We've benefited for over 60 years without having to pay for wastewater, and our customers have not had to pay for that either,” said Canton Mayor Zeb Smathers. “We've been talking about this for years now, since the mill closure, that it was not going to be the same much longer.”

Two Banks, the Missouri-based development firm owned by Eric Spirtas, officially acquired the treatment plant along with the 185-acre mill site in January 2025 and stepped in to continue providing uninterrupted service — based on little more than shared goals and a handshake.

“Eric has, on his own dime, been providing this service and working with us and negotiating,” Smathers said. “There's things we've agreed on. There's things that we've disagreed on. But we reached an agreement that is in line with what myself and my board has been saying, that the town of Canton realized that we have to now pay for wastewater services, but we have to pay a fair and reasonable rate for wastewater services. It was a good example of trusting one another and negotiating this with him and his team and reaching this fair and reasonable number.”

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The newly signed agreement ensures that those services will continue at least through March 31, 2026, giving town officials and the developer critical time to chart a long-term path forward.

The shuttered paper mill property had long been a cornerstone of Canton’s economy and infrastructure — and even its blue-collar culture. While the mill’s closure in 2023 created an economic vacuum and eliminated hundreds of jobs, the wastewater plant remained a crucial asset — both for the town and for any future redevelopment plans on the sprawling mill site.

Under the agreement, the Town of Canton will pay Two Banks $140,000 per month for wastewater treatment. Smathers credited Canton CFO Natalie Walker with doing an extensive amount of research to determine what, exactly, a fair and reasonable rate would be.

“I called a lot of different municipalities in the region, most similar to our size, and asked how they handled their waste treatment, if they did it in house, or if they contracted it out and what that cost,” Walker said. “I just put that into a spreadsheet and got an average.”

As part of the deal, the town will also issue a lump sum payment of $700,000 to cover services already rendered from January through May 2025. Walker said she’s confident the town can handle the payments, but that at least some of the lump sum payment would have to come from fund balance; the payments have already been priced into the town’s forthcoming annual budget, which includes no property tax increase but substantial water and sewer rate hikes.

“it's important that if you're going to ask to raise rates people know what it's for,” Smathers said. “Now we can complete that circle to say it's $140,000, and that's what it’s going to be paying for.”

The operational cost of the facility is estimated to exceed $140,000 per month, though Two Banks is still working to determine the exact figure. The agreement acknowledges that both the town and Two Banks are evaluating current wastewater flows and treatment requirements.

Indeed, the agreement explicitly states that both parties are “actively negotiating” a potential sale of the treatment facility to the town. If Canton were to assume ownership, it would not only be responsible for ongoing operational costs, but also for any future upgrades or environmental compliance requirements.

“I am confident that there's going to be other developments,” said Smathers, who declined to elaborate on what those developments might be. “Other things are being discussed about the future of our wastewater needs, but I think the first step was paying for the services [Spirtas] is providing, and establishing that relationship. I mean, this could have been a much different conversation with different entities, and this, I think, shows cooperation on both the town and Eric's part, going back and forth.”

Given the high price tag and the small-town budget, Canton and Spirtas are also working to secure funding that would support the acquisition and long-term operation of the plant, possibly from state and federal sources. Two Banks has expressed a willingness to cooperate with the town in that pursuit. According to the agreement, both parties have committed to working in good faith to carry out future agreements, secure that funding and ensure a smooth transition if the plant is eventually transferred to municipal control.

For Canton, the wastewater treatment plant is more than just a utility — it’s a strategic asset with significant implications for the town’s future. Without access to affordable and reliable wastewater treatment, the town’s ability to attract new businesses and develop housing or commercial projects would be severely limited.

“There are no free lunches, and there is no free wastewater treatment,” Smathers said.

Two Banks, for its part, appears interested in being part of that long-term vision. Though the company is headquartered in Missouri, it has invested heavily in the Canton area, and Spirtas has an interest in redeveloping the mill site into a mixed-use community that could include housing, retail and light industrial space.

Last week, North Carolina Department of Environmental Quality Secretary Reid Wilson visited Canton and the mill site, promising to keep environmental remediation and redevelopment as a top priority. During that meeting, which included both Spirtas and Smathers, Spirtas promised a site master plan in about six months.

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