PORT ANGELES — A prospective owner of the shuttered KPly mill on Marine Drive is making a last-ditch effort to save the mill from an auction of equipment and buildings scheduled for Jan. 22.
Port Angeles resident Josh Renshaw, who wants to reopen the mill, said that on Tuesday, he requested that Sterling Savings Banks postpone the auction, but that he had received no response by Wednesday.
“We are still optimistic that we can work something out, but we are concerned that inaction will lead to not being able to come to terms,” Renshaw said.
Owner Klukwan Inc. of Alaska closed the mill on Nov. 2, 2007, laying off 132 workers, and then closed it permanently at the end of April.
Sterling plans to auction equipment and other materials it holds in a lien agreement with Klukwan, said George Schoenfeldt, Port of Port Angeles commissioner.
The port, which owns the buildings and the 19 acres the defunct mill sits upon, will auction the equipment, buildings and other materials it controls at the same date to satisfy back rent it is owed, said Bob McChesney, port executive director, on Wednesday.
Renshaw, a former KPly employee, and a group of unnamed investors have made an offer for the mill to the Spokane-based bank, hoping to reopen it with a new name, Peninsula Plywood.
He said on Wednesday that he is awaiting a response from the bank, both on his offer for the equipment and on his request that the auction be postponed.
Sterling representatives did not return multiple requests for comment.
Auction preparations
Auction preparations probably will be made in early December, if the January date remains firm, McChesney said.
A potential buyer could still work out a deal with the bank and with the port before then, he added.
“Any time between now and then, if Mr. Renshaw or another potential buyer wants to put together a proposal, we are ready,” McChesney said.
“The status is of the facilities is under mothball maintenance. We are keeping the lights and fire system working and ready for someone to take over — and that is costing us money, but we aren’t going to keep carrying it beyond the auction date.”
Clallam County Superior Court on Sept. 26 issued a judgment that demands that Klukwan pay $212,788.71 the port for back rent and another $1,826.25 in attorney’s fees at a 12 percent interest.
Klukwan has never responded to the judgment or made payment.
The auction would help the port recoup its expenses.
“As far as the buildings go, sometimes people like to buy those and tear them down for the scrap, and use pieces as architectural elements and such,” McChesney said.
Preparation destructive
If the equipment is prepared for auction, it would mean very destructive processes to the mill, Renshaw said.
“At that point, the cost of repairing it would probably be prohibitive to reopen,” he said.
It could be possible to purchase the items at the auction, but he said he wasn’t sure it was a viable option.
“We could toy with that idea, but the repair work would likely be prohibitive,” he said.
Jobs
Port Commissioners Schoenfeldt said he was less concerned about the rent than the jobs reopening the mill would create.
“When you think about them owing $140,000 [the amount the company owed in rent and utilities when the judgement order was originally filed] and reopening it would create 150 jobs — that is less than $100 per job,” Schoenfeldt said.
State Rep. Kevin Van De Wege, D-Sequim, said he wrote a letter to Gov. Chris Gregoire requesting that she do whatever was in her power to urge Sterling to expedite the issue.
“I am outraged that an opportunity to bring 150 new family-wage jobs to Port Angeles may be lost within the coming week because of foot-dragging by Sterling Savings Bank,” said the legislator from the 24th District, which includes Clallam and Jefferson counties, in a written statement.
Van De Wege, Schoenfeldt and Renshaw all said that they believed that the bank was overwhelmed with other issues arising from the economy, and not malicious in its lack of response, but that they felt the delay was detrimental.
“We are concerned that inaction to work with us now could lead to it being too late later,” Renshaw said.
“We really believe we can work something out that is in the best interests of Sterling, Peninsula Plywood and the community.”
Renshaw has said he would need about $5 million to reopen the mill.
The money would come from $1 million in local money, a $1 million loan from the state and $3 million in bank loans, he has said.
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Reporter Paige Dickerson can be reached at 360-417-3535 or at paige.dickerson@peninsuladailynews.com.
