Can the Veldman brothers deliver a port to Red Rock?

Paul Veldman knows there is some fence-mending to be done with the folks in Red Rock. As one of the owners of the former paper mill property in the north shore town, Veldman acknowledges they have much work to do to regain the trust and confidence of the community of 900. Veldman said it would be “naive” if they think they don’t.

Their undeveloped brownfield property has, admittedly, sat vacant for decades. And there are some toxic hotspots to be cleaned up before anything new and exciting gets built. “We’ve got work to do.

What we say is one thing; what we do is really what we’re going to be measured by,” he said. This spring, Veldman, his BMI Group [1], and their consultants, rolled out a highly conceptualized vision to revitalize the cleared 360-acre waterfront site on Nipigon Bay where the Norampac linerboard mill once stood. A website promotional video from BMI and its Winnipeg-based urban and landscape consulting firm, Scatliff + Miller + Murray, promotes the former forestry town and its postcard surroundings as a “case study” and a “demonstration project” for community renewal that the rest of Canada can follow.

They’re out to sell Red Rock as an international destination for the robust economic opportunity that lays ahead and for its scenic natural beauty on the top end of Lake Superior. But to a critical Red Rock Mayor Darquise Robinson, seeing is believing. “We’re a little standoffish, we really are,” she told Northern Ontario Business.

“We’ve had our hearts broken — anybody that’s come in, saying we’re going to bring this type of business (to town)… so we’re cautiously optimistic.” There remain lingering doubts from residents about the developer almost a decade after BMI, then known as Riversedge Developments, acquired the mill property through a municipal tax sale in 2014 [2]. Riversedge was fresh off the demolition and cleanup of the St.

Marys Paper plant in Sault Ste. Marie and vowed to do the same in Red Rock, bringing hope of new development to town [3]. Paul Veldman is a brother in business with Joe and Justus, one of the three principal owners of BMI, which bills itself as an adaptive and restorative property management firm based in southwestern Ontario.

Among their Northern Ontario assets are former mill sites in the Sault, Iroquois Falls and Fort Frances. Red Rock Developments [4] (formerly Riversedge Developments) is a subsidiary company. Their motives with these assets have been questioned by many in Northern Ontario [5]. The Red Rock mill site on picturesque Nipigon Bay has changed hands a few times since Norampac, a subsidiary of cardboard and packaging giant Cascades Canada, shuttered operations in 2006, putting 300 out of work.

Robinson, who’s served on Red Rock council since 2010, watched a succession of owners scrap the mill of anything of value and demolish the buildings while the property deteriorated [6]. Former Red Rock Mayor Gary Nelson once described the site as a “war zone.” Promises of new economic and job opportunities, including by Riversedge, never materialized.

Very little has been done to make the site development-ready, nor fully tackle the contamination legacy issues. The frosty relationship between developer and municipality didn’t improve when the township took Riversedge to court for unpaid property taxes [7] in 2020. The matter was settled to the tune of £2.18 million.

Robinson remains disappointed they had to resort to legal action to recoup those back taxes and that the burden fell on residents. But with the court case out of the way, she said there’s a gradual thawing in relations. “They’re inviting us to more things, they’re being a little more open,” including a commitment to open the gates this year to provide site tours to residents.

“There’s no secrets. We wanna be very open and transparent,” Veldman said to Red Rock council on March 20. This time around, BMI and its planning consultants are proposing a mixed-use residential, recreational, commercial and industrial development for the site.

They hope to persuade, and get buy-in, from locals to reimagine how the property could be transformed for the “betterment” of the community. In sectioning the site into “districts,” they envision upscale new housing, boutique retail establishments, mountain bike trails, shore-side yurts and saunas for tourists in a resort setting. An “Energy and Employment” district would feature a revitalized Great Lakes commercial port and could imaginatively host mineral processing plants, value-added forest products operations, hydroponic vertical farms, a solar farm, even a “drone port.”

It’s a “work in progress” over a 25-year build-out, said urban planner Michael Blatz of Scatliff + Miller + Murray in his presentation to council. Blatz urged Red Rock to adopt an ethos of “embracing bold ideas, innovative solutions and emerging clean technologies” in differentiating themselves from other communities. Veldman hopes reinstating the port can be an “icebreaker” to re-engage with the community.

There’s a market and government push on in northwestern Ontario to mine critical minerals and develop the Ring of Fire. BMI wants to position Red Rock as a port that brings mining machinery in, and ships mineral product out. With warehousing and a cargo laydown area, they believe port activity can spin off into other opportunities across the property.

The kind of cargoes they would be pursuing are “break bulk-type goods,” Veldman said, specifically, heavy, oversized pieces of equipment, like large excavators, used to build and operate mines. Veldman and BMI are involved with the Hamilton-Oshawa Port Authority (HOPA)[8] in marketing a repurposed Thorold paper mill [9] on the Welland Canal as an industrial park. One of its tenants there is a biochar company with eyes on expansion in Kirkland Lake [10].

Veldman believes Red Rock can be an extension of HOPA’s network. Firmly in BMI’s corner is the Red Rock Indian Band. The two parties signed a memorandum of understanding over the winter to establish a multimodal hub.

Under the banner of the Red Rock Integrated Marine Supply Chain, they trotted out the concept at the PDAC conference in Toronto last month to some buzz by the industry, said Red Rock Chief Marcus Hardy. Hardy said the band has aspirations of creating a First Nation-run port authority that would cater to the industry on the supply and services side through a logistics solution. “Once the mine’s and up and running, we’re going to need people, modular homes, infrastructure.

It’s kind of limitless what we can bring up.” His band is involved in developing a local biochar business and would like to establish it at the site. Hardy emphasized a community priority ensuring site redevelopment is done in an environmentally responsible way.

It’s why they’re behind BMI’s push to clean up the site. “We’ve been working with them for the past year to do all this remedial work to ensure that it’s safe and nothing’s leaking into Lake Superior. That’s our main concern, the environment.”

Though Hardy was optimistic enough to expect the arrival of the first marine cargo within six months, Veldman walked that timeline back, saying it depends on various government approvals and permitting. But Veldman told Red Rock council they intended to do “significant capital works” there this spring and summer. To add some heft to their proposal, BMI is tapping into its connections from The Netherlands.

A Rotterdam-area shipyard, Neptune Marine, is building them a customized barge to haul freight into Red Rock. Veldman said he was travelling to the yard at the end of April to view its construction. With the old dock infrastructure deemed unusable, the barge and its ramp would be pushed on shore to unload freight.

Eventually, Veldman said they would like to build a seawall to load and unload ships. A Dutch investors group is also buying residential properties in Red Rock and neighbouring communities. Veldman said the financing is secure to put their port and site plans into motion.

“The commitment is there is see this through,” he said, with the promise of millions of dollars in spending “over the course this year, and beyond.” As with any development, Veldman cautioned, they’ll have to hit certain project milestones to proceed to the next stage. Dealing with the environmental legacies up front is a priority.

The Ontario Ministry of Environment, Conservation and Parks (OMECP) will have a big say on what gets built. They’ll be reviewing BMI’s development plans. An environmental assessment is underway on the property to pinpoint any contaminated areas that could be development showstoppers, particularly in former manufacturing spaces where chemicals were used or where fuel was stored.

The site also contains lagoons and capped landfill. Veldman told Red Rock council last month that the previous property owners left “a bit of a mess” and BMI is working “diligently to clean it up.” BMI hired the environmental consultants Pinchin of Thunder Bay to conduct phase one and phase two assessments of the site to identify contaminated areas.

Under the ministry’s eye, monitoring wells will have to be installed. Soil and groundwater samples will have to be analyzed to determine the extent of any contamination. “Our primary concern is the lake,” Veldman told council, “and any leachate that might or might not over the past (years) have spilled into the lake.”

According to Lisa Brygidir, an issues and project coordinator with OMECP in Thunder Bay, back in May 2021, the ministry issued an order to Red Rock Developments to address environmental issues at the site. The order was reissued in January 2022 for the company to provide new timelines to comply with on-site waste disposal and come up with a long-term work plan to address these concerns. To the ministry’s satisfaction, the company must address any off-site leachate that might be discharging from the property into the lake.

There appears to be no issues of leachate leaking into the community. Brygidir said the ministry wants any effluent left over from industrial sewage basins, a lime pile, and other associated ponds on the site cleaned up. BMI has to be prepare an inventory of all on-site waste and explain how it will be managed and removed from the site.

She points to a large fuel tank, still standing but damaged, that contains bunker C fuel oil that must be removed and all the contaminated soil within a berm area surrounding the tank. Brygidir said so far Red Rock Development is complying with the order. “Other tanks onsite do not pose an environmental risk.” Should the mill property ever be abandoned by BMI, Brygidir said, the ministry understands that Norampac (Cascades) had set up a financial trust fund for site remediation when the property was sold in 2007.

If there is no viable owner of the property, the ministry can then issue regulatory orders “to those having care and control of the site,” she said, similar to what happened at the former Marathon Pulp site, and Norampac “would ultimately then have the trust available to them to assist in meeting their obligations.” A Cascades spokesperson replied that any environmental liabilities reside with the current property owner. In an email, Hugo D’Amours said they are not aware of any development plans for the site, haven’t been in contact with the developer, and have not been involved with the property since selling it more than 15 years ago.

On whether Cascades had been contacted by the Red Rock Indian Band about the cleanup fund, D’Amours said the company received a letter from the Red Rock Indian Band chief several months ago but he did not reference any specific development project.

“The current owner is responsible for addressing the environmental conditions at the site, and it is this party to whom recourse should be had to address any remaining environmental issues at the facility,” said D’Amours.

References

^ BMI Group (www.thebmigroup.ca)
^ acquired the mill property through a municipal tax sale in 2014 (www.northernontariobusiness.com)
^ hope of new development to town (www.northernontariobusiness.com)
^ Red Rock Developments (www.thebmigroup.ca)
^ questioned by many in Northern Ontario (www.sootoday.com)
^ demolish the buildings while the property deteriorated (www.northernontariobusiness.com)
^ took Riversedge to court for unpaid property taxes (www.northernontariobusiness.com)
^ Hamilton-Oshawa Port Authority (HOPA) (www.hopaports.ca)
^ Thorold paper mill (www.hopaports.ca)
^ biochar company with eyes on expansion in Kirkland Lake (www.northernontariobusiness.com)