Experts are concerned about a hydroelectric generator beneath a historic paper mill which is being eyed for a multi-million dollar development over the next several years.
Inspections this month by teams from state and federal agencies uncovered a lack of upkeep on the generator stemming back years, potential structural issues in the areas around the machinery and lingering problems after a fire destroyed part of the building in September, 2023.
Officials behind the “Cheboygan Commons” project - which aims to completely redesign the area into housing and businesses - called the findings “disturbing” but say they’ve become “more resolute” in finding ways to see the development through.
“This just cannot continue… It will continue to deteriorate, the conditions will worsen,” said Sharen Lange, the Cheboygan County economic development coordinator. “If not now, when? And if not us, who?”
THE SITE
What was first built as a sawmill in the late 1800s now serves a gateway to Cheboygan’s downtown when driving on the North Straits Highway. The factory - which sits on the banks of the Cheboygan River - went through multiple successful owners including the Charmin Paper Co. and Procter & Gamble.
Before P&G left town in 1990, the facility was one of the largest employers in the Cheboygan area. Newer owners have not captured the same success.
In May 2023, the collective that operated it, Patriot Advanced Environmental Technologies, LLC faced a lawsuit for allegedly neglecting payments on leased equipment.
Later that summer, a fire burned down a warehouse that connected to the paper mill - resulting in PAET’s eviction and the facility shutting its doors.
Thomas Homco, a former NFL player who now represents Hom Thermo Warehouse XIII LLC has been the landlord of the site since February, 2023. While he suggested in earlier interviews with IPR News a desire to see the factory making paper products again, Homco has since expressed support for a plan to completely redevelop the area.
The facility is now abandoned and deteriorating due to months of neglect since the September fire.
THE CHEBOYGAN COMMONS
Back in June, a plan to turn the 14-acres into a mixed-use district with housing, retail, hotels, and more was announced by Bob Pulte, under his firm, R.P. Investments.
He told IPR News in June he hopes the project will be “a point of pride as a reinvented gateway to the Cheboygan community.” The plan has since received some public support - including a nod from the nearby hospital owned by McLaren Northern Michigan.
"Our Northern Michigan communities are highly attractive to people across the region,” said Gar Atchison, president and CEO of McLaren Northern Michigan. “Cheboygan continues to grow as a destination location in northern Michigan, and this project will only add to the appeal."
In Pulte’s initial announcement he said the development will blend workforce rental housing with for-sale duplexes and riverfront condos, and include a small hotel with special event center, waterfront dining, and other commercial space.
Officials first estimated the entire project would cost up to $50 million. This month’s findings are likely to cause that price to increase.
THE HYDRO PROBLEMS
For decades, an underground hydroelectric generator has helped generate power for the former paper mill and control water levels along Cheboygan’s inland waterway which includes Mullet and Burt Lakes.
The generator is a “permanent fixture” of the property specifically designed for the site under a Federal Energy Regulatory Commission exemption license.
The machinery is in major disrepair though, according to Sharen Lange. She said the generator hasn’t run since before the September 2023 fire and has been exposed to the elements for the past several months.
“We've got different levels of mold condensation. Things are starting to rust at a rapid rate,” she said. “It's really because the site has not been able to have power to regulate the climate [in the building].”
Additionally, Lange says the multiple decades-old basements in the facility will need to be geo-scanned for potential structural integrity.
Over the years, the Michigan Department of Natural Resources would oversee water level management via a verbal agreement with whomever owned the generator at the time.
The Pulte team said it wants to maintain an agreement to ensure water levels can be managed - and would support repairs to the generator to do so - but wants out of any agreement to produce energy as potential owners of the site.
“We’re focused on safely replacing and remediating the dilapidated plant and burned out warehouse with new housing options and a top notch development that complements downtown.” Pulte said in a press release. “We are not focused on being energy producers.”
Despite the new issues, Lange says the plan is still to support efforts to remediate the site - though developers may need more help from state and federal agencies than previously expected.
U.S. Representative Jack Bergman visited the site this month. Lange said he and his team immediately saw the need to support “expert-level attention to the project.”
Pulte and his partner firms previously expressed interest in the state’s newly expanded Brownfield Redevelopment Financing Act. Under the new law, a property no longer has to be considered blighted, contaminated, functionally obsolete, historically designated or owned by a land bank to qualify as a brownfield.
The Cheboygan Commons plan is still in its infancy, Lange said. Pulte has not officially purchased the property and plans will eventually need approval by the city government.
“We’re urging the public to continue to be patient and optimistic and understand that this is a process,” Lange said. “We're doing our very best to pull together an amazing group of people and firms to make sure that not only creates a good vision for the community but we're not cutting corners - and we're not diminishing the responsibility that comes with this type of project.”
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