As part of Spaulding Fibre's closure plan, the company had been working with the New York State Department of Environmental Conservation (NYSDEC) to decommission the plant, and investigate environmental problems. However, as a result of its bankruptcy, on January 23, 2004, Spaulding Fibre ceased operation of the on-site water treatment system, and removed staff from the site. A 1999 study determined that a total of approximately three (3) acres of the site require remediation. The city claims that $2.3 million has been spent on remediation with another $3.6 million pending.
Remediation work began August 2006. Spaulding Fibre was demolished over 2006 and 2007.