A Washington state real estate development company is suing to force the foreclosure of the former Smurfit-Stone mill site in Frenchtown.
Wakefield Kennedy filed a lawsuit in Missoula County District Court last week, asking that the mortgage on the Smurfit-Stone site, owned by Green Investment Group Inc. and M2Green Redevelopment LLC, be foreclosed and the property sold.
Wakefield-Kennedy can make the demand because it loaned Green Investment Group $29 million in April 2011, and Green Investment Group put the Smurfit site mortgage up as collateral.
The lawsuit says the Illinois-based Green Investment Group defaulted on the loan and now owes Wakefield-Kennedy almost $61 million in principle, fees and interest, so should have to surrender the property.
In addition, the lawsuit asks that Wakefield Kennedy be allowed to buy the property, and should the company’s bid succeed, it should be allowed to take immediate possession.
Wakefield-Kennedy is one of the almost three dozen limited liability corporations based in Bellevue, Wash., and run by Steven J. Malsam and James L. Evans.
Since 1996, the duo has developed large residential and commercial properties, mostly in Washington, and they appear intent on developing the mill site.
In January 2017, Malsam created MLH Montana as a corporation, and the Wakefield Properties website lists “Missoula Development” as a current project and the only one in Montana. The listing says “the vision for this development is to support the natural habitat, create jobs, expand infrastructure, and build complete communities while implementing renewable and sustainable practices.”
Malsam is on vacation until March 12, so couldn’t be reached for comment.
The final thing the lawsuit demands is that all liens on the property be considered secondary to Wakefield-Kennedy’s interest.
Normally, landowners can’t sell their property if creditors put lien notices on the property; this ensures landowners pay their bills so the property is free and clear before someone else buys it.
But in this case, Wakefield-Kennedy wants the judge to allow the sale to move forward, regardless of liens.
One of those liens belongs to the U.S. Environmental Protection Agency, which is trying to assess the property for contaminants left behind by the pulp mill and linerboard plant so it can be cleaned up.
The EPA regularly files liens on Superfund properties, and EPA Community Involvement Coordinator Jacqui Barker said the lien would continue, regardless of whether the property is sold.
If the foreclosure is ordered, it’s likely that Wakefield-Kennedy would become a new potentially responsible party instead of M2Green.
But as the Smurfit-Stone Community Advisory Group is learning, each potentially responsible party can put up its own resistance as the EPA tries to come up with a cleanup plan. For example, the existing PRPs are challenging some of the fish tissue collections carried out last summer.
“The EPA routinely works with developers at Superfund sites in various stages of the Superfund process. If there are plans to develop the site, the EPA will work with the developer to ensure that development occurs in a manner that is protective of human health and the environment,” Barker said in an email.
NewFields Companies and Burke Electric also have construction liens.
The law firm Jones and Associates is representing Wakefield Kennedy, but didn’t respond to a request for comment.