The Canadian city of Edmonton has been forced to eat its paper-recycling investment – millions of dollars – after the company it partnered with went bankrupt and no other firms stepped up to take over the plant.
After months of consideration, the Edmonton City Council on Nov. 8 voted to sell the assets of Greys Paper Recycling Facility and place the future of the building on hold.
Greys Paper Recycling Industries Ltd. first approached the City in 2005 with a chemical-free process to recycle post-consumer office paper and clothing fibers into new office paper.
Four years later, the City spent 3 million Canadian dollars ($2.2 million) to build the paper recycling facility. By 2014, the City had spent $7 million on construction and paper-making equipment, according to the Edmonton Sun. Further amendments to the agreement between Greys and Edmonton made the City the owner of the building.
By 2015, the company had 85 workers producing 8.8 short tons of paper a day, according to the Sun newspaper. A columnist at the time heralded the facility as a great business success story.
In January 2016, Greys Paper Recycling filed for bankruptcy. The Edmonton Sun says the company went out of business because of low sales and poor quality. The recycled paper the plant was producing had a gray color and was rougher than traditional paper.
According to documents, the City said that, in 2005, paper was the main form of communication within offices. But by the time the plant was built, an increase in technology led to paper staying in the supply closet.
A month after the bankruptcy, the City took possession of the building and all the paper-making equipment inside. A few months after that, the City was looking for new tenants and operators of the building, CBC News reported.
There haven’t been any takers.
Now, City administrators have decided to get out of the paper-recycling business. It will sell all the equipment and other assets, giving the proceeds to the company’s largest creditor: the Canada Revenue Agency.
As for repurposing the building, the City says it is conducting a waste management strategy and site plan that will be completed by September 2017. After that, the City will accept proposals for the future of the building.