For over 120 years, a mill operated in Park Falls. Now the site is home to a crypto-mining operation.

For over 40 years, John Taplin worked at the Park Falls paper mill. As a machinery supplier, Tapplin made paper with hundreds of other employees for decades until the plant closed down for good last year.

“I’ve come to love the place over the years. I raised four children there and built a good life there,” said Tapplin, who served as union president at the factory. “It’s sad to see it go because now other people won’t have that opportunity.”

At its peak, Tapplin said as many as 650 people worked at the factory outside the city’s vicinity. 2,400 inhabitants. Now, Tapplin sometimes wakes as early as 3:30 a.m. to haul logs about a two-and-a-half-hour trip to a sawmill in Cloquet, Minnesota. Since the shutdown, he said former factory workers have found other jobs or left the area.

“It used to be a real thriving community, and now it’s more like a retirement village,” Tapplin said.

For over 120 years the mill operated near the Flambeau River in Park Falls. Now that it’s closed, the city is trying to redefine itself as the new owner seeks to lease the space to other businesses. According to Park Falls Mayor Michael Bablick, about 100 remaining workers lost their jobs when the plant closed in the spring of 2021.

“This town has always had a mill. … Our whole existence has had some sort of operation on the Flambeau River,” he said. “We have tried to re-identify ourselves as a great place to raise families and grow our current local manufacturers to offset the loss of jobs.”

The factory site becomes the headquarters of a crypto-mining operation

The paper mill has operated under several different owners since it opened in 1896. The mill nearly closed in 2006 when Ohio-based SMART Papers filed for bankruptcy. The plant had been idle for months before Flambeau River Papers bought it with a $4 million loan from the state. according to the media.

Bablick said the mill’s demise happened slowly over time when Flambeau River Papers closed one of its machines in 2018. The company sought an alternative to bankruptcy and went into receivership. . Then the COVID-19 pandemic hit. An out-of-state contractor reopened the mill under a different name in late 2020, but it was closed the following spring.

A bipartisan group of lawmakers proposed last year to loan a co-op of lumber professionals $65 million from COVID-19 relief to prevent the closure of the Park Falls plant and another in Wisconsin. Rapids. Gov. Tony Evers vetoed the bill over fears that federal guidelines would prevent that funding from going to factories, exposing the state to the risk that it would have to repay that money to the federal government.

Today, Northwoods Group Realty owns the former factory site. Jordan Feldman, company owner and vice president of Global Equipment International, said he and his partners are looking to rent space from other manufacturers or companies. The Delaware-based company has previously leased space to a crypto-mining operation owned by SOS limited.

“They actually have several containers already operational. The containers contain these computers that basically use power to mine Bitcoin and other cryptocurrencies,” Feldman said. “It’s a very popular thing in North America right now for these groups to invest in sites that have access to large amounts of power, so that’s basically why this particular site is a great fit for this operation. “

According to Forbes, Bitcoin mining is a process where a network of computers verifies online transactions and generates new Bitcoins. The process requires a lot of electricity. The University of Cambridge estimates that Bitcoin requires electricity at a rate of 127 terawatt hours (TWh) each year. Forbes reported that exceeds the amount of electricity Norway uses in a year.

SOS limited announced the launch of its Super Computer Center in April. The company has four mining modules on the factory site and wants to add two more. According to a Securities Exchange Commission filing, the company spent $26.8 million on its Wisconsin Super Computer Center to expand its hosting service in North America after the Chinese government banned certain types of cryptocurrency mining. A company executive did not respond to a request for comment.

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Feldman said he wants to attract more tenants to the site to employ more people in the area. While several groups have expressed interest, he said they continue to liquidate the site and sell idle assets.

For his part, Bablick said the city has also applied for grants and tax incentives to support other manufacturers in the city, including Weather Shield. The door and window manufacturer made a Investment of $3.6 million last year to expand its facilities in Park Falls with the help of $225,000 in state tax credits. The expansion could create up to 63 new jobs. St. Croix Rods, which makes fishing rods, also acquired the building that once housed a Shopko store.

“I think we’re doing everything we can to make the best of what has been a very, you know, sad and bad situation,” Bablick said.

The loss of the mill leads to water problems

The plant’s closure also resulted in the loss of the city’s largest water consumer, which will drive up water rates for residents.

Bablick said water demand has dropped by 50 to 75 percent. Without the operation of the plant, the city had to run approximately 250,000 gallons of water a day during the winter to keep the water pipes that served the plant from freezing. The city also drilled wells about 20 years ago to provide enough water to run the plant. Bablick said the city’s water department is still paying off about $1 million in debt.

Brentt Michalek, the city administrator, said Park Falls has the capacity to use about 1.25 million gallons of water each day.

“We have the capacity to ship or bottle a lot of water, and that’s an interesting concept. It might be a bit controversial, but we have a huge capacity that we just aren’t using,” said he declared.

In August, Governor Tony Evers announced a $3.75 million grant funded by COVID-19 aid to help the city upgrade its water infrastructure. The town’s mayor said it should help fix the utility’s aging water pipes.

Without the funding, Bablick said the city faced a roughly 75% increase in water rates. A customer using 8,000 gallons each quarter would have paid approximately $25 more per month. Now the city plans to file a new rate case that is expected to increase water rates by about 4.5%. Bablick said customers could pay between $5 and $10 more per month.

“There will be more rate increases to come, we’re just trying to minimize them as much as possible,” he said.

Any proposed rate increases will be subject to the approval of the Wisconsin Public Service Commission. In the meantime, the city navigates COVID-19 supply constraints as it searches for pipes to make improvements to its water infrastructure. The city has until the end of 2024 to spend state grants, and officials hope to begin that work in the spring or summer of next year.

“Mill towns either roll and die or they rise and fight,” Bablick said.

The town’s mayor said leaders are “fighting like hell” to keep Park Falls moving forward.