Veneer plant suitors await state log permit

Posted: Tuesday, January 14, 2003

KETCHIKAN (AP) -- The parties interested in operating the Ketchikan Gateway Borough's veneer plant are awaiting a state log storage permit for Ward Cove before proceeding with lease plans, according to the Alaska Industrial Development and Export Authority.

Executive director Jim McMillan told the Ketchikan Daily News that AIDEA has voiced interest in purchasing the veneer mill from the borough and leasing it to Sealaska and a Medford, Ore.-based company, Timber Products.

McMillan said AIDEA is awaiting a proposal from the two companies. That proposal likely would not be presented unless the companies are able to obtain a permit to take logs out of Wards Cove, he said.

Steve Corporon, assistant borough manager, said the borough is seeking a permit from the Alaska Department of Environmental Conservation to store and take logs from the water of Ward Cove. While the Ketchikan Pulp Co. had a permit to store the logs in Ward Cove when it operated a pulp mill there, Corporon said, the borough does not have a permit in place.

Until the log transfer issue is cleared up and the companies decide whether they want to lease the plant, McMillan said, AIDEA would not start its own due diligence work on a potential mill purchase.

''We can't start it, until they present a plan to us as a potential operator,'' he said.

Todd Antioquia, Sealaska director of corporate communications, said the company remains interested in leasing the veneer plant.

''It's a very vital part of the Southeast timber industry, so we're very eager to see the plant in operation,'' Antioquia said.

Steve Seley, owner of Pacific Log and Lumber, told assembly members last week that the plant should be operated or mothballed to prevent deterioration.

If the borough cannot find an operator to run the veneer plant year-round with two shifts, Seley said, it should consider operating the mill with one shift, eight months a year.

The borough purchased the veneer plant for about $2 million from Gateway creditor Foothill Capital in July, moments before the mill was scheduled to be auctioned off.

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