PARK FALLS – Michael Bablick’s family is filled with generations of loggers and paper makers. The way that he sees it, “the only reason I exist” is because of the paper mill in Park Falls, he said.
But now, as the city’s mayor, Bablick must lead Park Falls in a new era without the more-than-120-year-old mill, after it shut down last year.
More than 100 workers lost their jobs when the mill closed. City officials have also had to grapple with the effects of losing one of their biggest water users. Pieces and machinery from the mill are being sold off, as the No. 6 boiler building came down. And, a cryptocurrency mining operation has moved in.
Bablick doesn’t know where the idea for that last move came from, but he can see why the space would be appealing for that type of business.
“This mill has — like any mill — an enormous power service running to it from the grid,” he said, and it “was using 25 megawatts of electricity everyday. … So, if somebody can use the power, it’s no more than it would have been used before.”
SOS Limited LLC, a Chinese company that is leasing space at the former mill through a joint venture called FD LLC, already has four crypto mining modules — steel containers housing banks of high-powered computers — running inside of the building, Bablick said, but “you would never even know they’re there.”
Now, the company wants to place “mobile smart containers” outdoors, and city officials, including Bablick, are worried that could be noisy for people living in the area.
“We are very adamant that we’re not making a moral judgment of what’s being done there,” Bablick told USA TODAY NETWORK-Wisconsin in August, after the city’s plan commission recently denied the company’s request.
“We’re agnostic of the uses of the mill,” he said. “… But we are going to protect everybody in this town to the greatest degree possible when we have the ability to.”
Attempts by USA TODAY NETWORK-Wisconsin to contact SOS Limited for this story were unsuccessful.
By the time the former Flambeau Paper Co. mill finally shut down in the spring of 2021, the mill had already gone through many ups and downs, at least a couple of receiverships and more than a dozen owners since it first opened in the 1890s. Its final demise, Bablick said, came “in shorter blows” than the sudden loss of 900 jobs when Verso closed its Wisconsin Rapids mill a couple of years ago.
Still, for a long time, “the mill was the town,” according to Gene Schneider, a former mayor of Park Falls. Located along the Flambeau River in the heart of the city, many residents worked there, he said, and it was a good job with good wages, making fine paper products. Schneider, himself, worked for 30-plus years running the mill’s railroad.
Phil Bochler, Park Fall’s assistant fire chief, said he worked at the mill for two decades. When he left in the late 1990s, there were more than 500 employees in the union, he said. But in recent years, the workforce at the mill had shrunk as the paper industry entered a digital age.
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Most recently, Yong Liu, a New Jersey entrepreneur, purchased the mill in 2020 and restarted it as Park Falls Paper & Pulp — right in the middle of the pandemic. By spring 2021, however, the mill shut down again.
There was hope that summer when state lawmakers passed the “Mill Bill” that the mill could be saved by a new owner. But Gov. Tony Evers vetoed the legislation over concerns about the funding source, and the mill property was later sold to a liquidation company.
A Delaware company called Northwoods Group Realty LLC now owns the mill property, where SOS Limited runs its mining operations. Global Equipment International, a Pennsylvania company, is selling off the mill’s equipment.
Jordan Feldman, who is the owner of Northwoods Group Realty and vice president of Global Equipment International, told USA TODAY NETWORK-Wisconsin that his business is looking to lease more space in the former mill to other interested companies. Northwoods is trying to do what’s best for the city and the people involved with the property, he said.
SOS Limited is “a new high-tech company with artificial intelligence and blockchain as its core technologies,” according to the company’s news releases. Due to laws and regulations around blockchain operations in China, SOS Limited decided to shift its Bitcoin mining operations to the U.S., a June 2021 release states.
To understand what Bitcoin mining is, it helps to compare it to something familiar, such as using a credit card, said Michael Litman, chair of the Department of Computer Science at Concordia University Wisconsin.
“If I’m at a store, and I owe 20 bucks,” Litman said, “I can swipe my credit card and the store is trusting Visa to validate and say, ‘Yes, this person’s good for the 20 bucks.’”
With blockchain — the underlying technology behind Bitcoin and other forms of cryptocurrency — there’s not a centralized person who validates transactions, he said, but rather a group of people, called crypto miners, who use computers to solve “difficult math problems to ultimately validate the transactions.” And they “get a tiny little cut of whatever currency is on the blockchain” that they helped award, he said.
While Litman has not heard of SOS Limited, “there’s tons and tons … of places that do this,” he said.
“(In) the earlier days of Bitcoin becoming very popular … you had people specifically moving to, like, the Dakotas,” Litman said, “because the price of electricity was very cheap there.”
And earlier this year, a New York company started “industrial-scale (cryptocurrency) mining operations” in Hatfield, in Jackson County, using power from a hydroelectric dam at Lake Arbutus.
Bitcoin mining, in particular, requires a lot of energy, Litman said, as hardware is updated and specialized computers need to work faster and faster to earn more money. Collectively, the Bitcoin network uses more electricity than many countries each year, according to The New York Times.
In April, SOS Limited announced the launch of its center in Park Falls. A few months later, the company said it wanted to place two mining modules outside because the four modules already operating inside the former mill “generate so much heat that the modules do not perform at their full capacity,” according to the Park Falls Plan Commission’s July 21 meeting minutes.
Worried about a residential neighborhood and nursing home nearby, the commissioners said they wanted more information about plans to make sure residents wouldn’t be disturbed by any potential noise from the containers’ cooling fans.
Additional documents submitted to the plan commission show that the company wants to set up seven modules outdoors, surrounded by walls to dampen the sound from the fans. The sound near the fans is about 94 decibels, the documents show. That’s similar to noise levels from a leaf blower or a motorcycle, according to the Centers for Disease Control and Prevention. But the sound decreases the further away a person is from the module, according to the company’s documents.
At their meeting in August, the commissioners said they still weren’t satisfied and denied the crypto mine’s request.
“There just was not any professional guidance about noise abatement, what these things were going to be like,” said Bablick, who is on the plan commission.
The company could try again, he said, but the commission wants feedback from a third-party, licensed professional who could say, “If you put these out here and we do this, this and that, it will not have a negative effect on the neighbors.”
Park Falls has also had to adapt now that the mill — which at one point drew up to three-fourths of the city’s daily water demand — is gone.
City officials got a glimpse of the problems to come during Wisconsin’s extremely cold winter of 2013-14, Bablick said. A lot of the mains downtown around the mill were installed over 100 years ago and are only a few feet underground. That winter, he said, they were worried about the systems freezing up, even with the mill using its share of the water.
Now, almost a decade later, the mill is gone, and the city’s water towers don’t turn over fast enough, according to Bablick, meaning that the towers and the shallow mains across town could freeze without enough flow going through them.
“There’s a fire hydrant in the middle of our town,” Bablick said, “… and in the winter, you will see a pipe going directly from the hydrant to the storm sewer” with a “minimum of a quarter million gallons a day, just to simulate that draw (of the mill) to keep everything in check.”
That problem is exacerbated, he said, by the more than $1 million the city still owes from when it had to drill new wells in the early 2000s after the state was worried that the water coming out of the mill’s treatment plant was too hot to go into an already-warm Flambeau River during some hot summers. At the time, the city was using so much water to try to cool down what was being put back in the river, it did not have enough water left for “adequate fire protection,” Bablick said. The new wells would ensure that wouldn’t happen again, he said.
Initially, the city thought it was going to have to raise water utility rates 75% this year, Bablick said, to make up for all the water the city has to use to keep its aging systems running, without the help of the mill. For the average residential customer, that would have added roughly $75 to $100 customers’ quarterly water bills, he said.
But now, the city is only going to have to raise residents’ rates by 4.5%, Bablick said, thanks to $3.75 million in ARPA funds for water infrastructure upgrades. Construction is expected to begin next summer.
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John Tapplin said it’s disheartening to drive by an empty parking lot at the place where he worked for so long.
After more than four decades working as a machine tender, Tapplin was “one of the last ones out the door” when the mill finally closed in 2021. “I had to shut the lights off on the way out,” he said.
By that point, there were a little over 100 employees working there, according to Tapplin, who was also the local union president. Most of the workers have found new jobs, he said, at the Weather Shield plant in Park Falls, making windows and doors, and at paper mills in Tomahawk and Rhinelander. Tapplin now works as a truck driver.
Watching the mill’s decline felt “almost like if you have a parent that’s diagnosed with a terminal disease, and you know it’s coming,” Tapplin said, “but you always have that little bit of hope that something good is going to come out of this.”
The city is now “trying to move on,” Bablick said, with its other industries. In addition to Weather Shield, Park Falls is home to St. Croix Rods. There’s also the Marshfield Medical Center, which received $20 million in ARPA funds in March to help modernize and update the facility.
If the mill is ever fully demolished, Bablick said there needs to be careful planning to remediate the area as close to how it naturally was before the mill existed.
“The last thing I want to see is this thing torn down haphazardly,” he said. “That would even be worse than it sitting there right now the way it is, in my mind.”
There is a flowage that directs the Flambeau River to the mill, which has a dam inside of it.
“If you start removing the foundation of the mill … and then you have this huge pressure head behind it, if it’s not done right, it can be a catastrophe,” Bablick said.
Tapplin said he isn’t sure what the future of Park Falls holds, but he knows how it felt when the mill’s doors closed for good.
“It’s just going to be really missed,” he said. “…That wasn’t just a place to work. It was like a fellowship. Everybody worked together for so long it was like extended family.”
Reach Becky Jacobs at bjacobs@gannett.com or 920-993-7117. Follow her on Twitter at @ruthyjacobs.
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