Near Lake Hallie, the first sawmill known as the Blue Mills was built over 1842-1843 by Steven McCann and brothers Simon and George Randall. In 1867, T.S. Schoefield bought it. A flood in 1870 destroyed the mill and dam, and H. Clay Williams and John Barron bought the property, rebuilt the mill and dam, and operated as Badger Mills, sawing 40,000 feet per day. Williams later sold his share to Barron, who built a flume from the Chippewa River to Lake Hallie so the lake could serve as a safe storage pond for logs; logs were lifted over the river bank to the flume by a dog cart, and the lake could hold two seasons of logs. In 1873, Culver and Rowe bought an interest in Barron's operation, and the mill became the Badger State Lumber Company. By 1888, the mill stood on the east bank of the Chippewa River just north of Lake Hallie, with a seasonal capacity of twelve to fifteen million feet and machinery that included a lath and shingle mill and a pail factory. On Sept. 4, 1891, the company stopped sawing lumber and prepared to dispose of its property; on Sept. 7, 1891, all firm assets were offered for sale, a serious setback to the village. On Oct. 23, 1891, another firm bought the lumber stock at Badger Mills, and on Aug. 18, 1892, the company sold 9,000 acres of pineland in Chippewa, Price, and Sawyer counties to David Miles of Chippewa Falls, completing the sale of its pinelands.