The next contestant.

• Author: Ross, Ian
• Position: NEWS

Anew frontrunner has emerged as a potential purchaser of the former Marathon Pulp Mill in northwestern Ontario.

Reliance Developments Corporat ion has signed a letter of intent with Tembec to acquire the shuttered mill and its lakeside property.

Green Investment Group Inc. (GIGI), an American redeveloper that was in the final stages of purchasing the mill, has "thrown in the towel" claiming the Ontario Ministry of Environment (MOE) put financial conditions on the sale that were too onerous.

"We're not there anymore," said Gerry Philippe, GIGI's vice-president of Cana-than operations for Green Investment Group Inc. It's just been too difficult with the MOE because the securities that they wanted were very high. We had to do the (cleanup) work before we were able to get the securities back. "We had to invest double the money for a good period of time, which did not make the project viable for us."

Established in 2005, GIGI has acquired industrial properties across North America, including some former Smurfit Stone paper mills in New Brunswick and Quebec. "We have seven other (brownfield) sites and we've proven ourselves to be pretty good at what we do," said Philippe.

MOE spokeswoman Lisa Brygidyr said the ministry's position is to hold any interested buyer to a standard of responsibility which includes providing financial assurance to cover any environmental work.

For now, those liabilities remain with Tembec, which operated the mill until bankruptcy forced its closure in 2009.

What still needs to be done by way of site cleanup was outlined in a 2011 settlement agreement negotiated between the MOE and Tembec.

Because the mill property on the shore of Lake Superior was heavily contaminated, the MOE had final say on any sale agreement.

As the property owner, Tembec was forced to post $4.8 million in financial assurance to the Crown for the site's remediation.

The money will be returned to the company once the cleanup is finished to the ministry's satisfaction.

Brygidyr said that's to ensure Ontario taxpayers and the town of Marathon don't get stuck with the cleanup bill should the company abandon the property.

The MOE required GIGI to do the same, plus post an additional $2 million for a total of $6.8 million.

Apparently the MOE had some serious concerns about GIGI's track record.

The ministry had received information from other places that GIGI had acquired brownfield properties on the East Coast and in the U.S., and then abandoned them...