Missoula County trying to collect unpaid taxes from Smurfit owners
(Missoula Current) The owner of several parcels of land at the former Smurfit Stone mill site west of Missoula owes more than $500,000 in delinquent taxes to the county and area schools, along with penalties and interest, according to county records.
Yet despite a number of efforts, Missoula County has been unable to collect the debt. And with the property under review by the EPA for potential environmental cleanup, collection options are limited, county officials said.
“It's not a piece of property people want to take and there's all these shell corporations going on, so it's tricky,” said deputy county attorney Dylan Jaicks. “There's no other mechanism that's out there for property taxes.”
The county took its latest step last summer when it filed civil action against M2Green to collect delinquent taxes. But the company, which owns several parcels at the mill, failed to respond to the complaint.
That prompted a Missoula District Court judge to rule in the county's favor in the amount of nearly $490,000. Still, the money hasn't been paid, county officials said, and the sum continues to grow.
“We've reviewed our options and there's just not a lot of them at this time,” said Jaicks. “But there is the judgment there on those parcels now, and it's attached to those parcels, so at some point in the future we'd expect payment.”
The issue of unpaid taxes related to the mill goes back to around 2011 when M2Green took ownership of 3,000 acres in a transfer from MLR investment.
Since then, other owners have emerged including MLH, a foreign corporation that now owns several parcels, and Wakefield Kennedy, which agreed in 2017 to pay the tax debt owed by M2Green in exchange for the dismissal of a lawsuit filed at the time by the county.
Wakefield also agreed to begin foreclosure proceedings on at least two of the parcels, but the county said that never happened, which has further muddied the ownership puzzle.
M2Gree couldn't be reached for comment.
“These current owners aren't holding up their end of it, and the schools are paying the price,” said Missoula County Commissioner Josh Slotnick. “It makes the burden ever heavier on everyone else.”
Unpaid taxes for years
According to county records, M2Green owns three parcels at the former plant and has transferred the rest to MLH. The county believes that Steve Malsam is a registered agent with both firms.
Tyler Gernant, the county's clerk and treasurer, said M2Green currently owes $551,000 in delinquent taxes while MLH owes $281,000.
Gernant said MLH paid its share of taxes up to 2021. But M2Green hasn't paid taxes on at least one parcel since 2012. It also owns one parcel that's believed to be contaminated by past industrial activity and may require remediation if the EPA orders cleanup of the site.
“It's been a challenge trying to get these taxes paid. But you can't squeeze blood out of a turnip,” Gernant said. “We were fortunate to have been able to collect some of those funds a few years ago through litigation. But I don't know how fortunate we'll be again.”
Delinquency hurts county, schools
The amount of delinquent taxes owed on the property has impacts that run deeper than mere frustration.
Gernant said around 45% of the taxes owed would go to area schools, primarily the Frenchtown School District. The county would receive around 35% while the rest would go to special districts and the state.
For the county, the lost revenue leaves property owners to pick up the slack for a corporation which, the county contends, has played a shell game surrounding ownership.
Frenchtown schools didn't return calls to discuss the impact the delinquent taxes have on that district. But in the past, school officials have said it hurts.
“Frenchtown's experience with M2Green has been very negative – nothing but broken promises, lack of redevelopment of the mill site and delinquent tax payments,” former Superintendent Randy Cline told the Missoula Current in 2017.
The county is asking the EPA to order cleanup of the site, allowing other uses to move in. Slotnick said it's the outcome the county is ultimately pushing for.
“What we'd really like to see is for the EPA to force the (owners) to clean this area up so people want to work there and live there, and so developers can make those plans real so there's tax revenue for the school district,” Slotnick said. “We'd have this big piece of land that's not a liability to our community but is an asset, which it should be.”