KETCHIKAN (AP) -- The operators of a new veneer plant for this Southeast Alaska city have been give the go-ahead to submit an application for a $5 million short-term loan to the Ketchikan Gateway Borough.
That's in addition to the $7 million loan Gateway Forest Products received from the borough when the company bought Ketchikan Pulp Co.'s abandoned mill site at Ward Cove.
But the Borough Assembly at a special meeting Monday amended the latest loan package to include an ownership option.
Gateway has been operating the Ketchikan Sawmill, managing the former pulp mill site and is preparing to operate a veneer mill at Ward Cove.
The assembly approved a motion to authorize the loan application under terms of the borough's economic development assistance program.
Assemblyman J.C. Conley added an amendment inserting language into the loan package asking that a study be made about repayment. That would include floating the loan in exchange for equity interest in the plant.
Eight companies that performed construction work on Gateway's new veneer mill or delivered timber to its Ward Cove facilities have filed liens against the company. They are seeking a combined $2.1 million, according to the state Recorder's Office in Ketchikan.
Gateway spokesman Cliff Skillings told the Ketchikan Daily News that the loan would be repaid in three years at standard market rates.
Gateway will offer industrial waterfront property worth 150- to 200 percent of the loan value as collateral, Skillings said.
Gateway is several months behind its original start-up schedule.
The company was formed in May 1999 when Portland-based Louisiana Pacific Corp. announced it would sell Ketchikan Pulp Co. assets to three members of its management team, Allyn Hayes, Dick Leary and Jon Sportsman, and timber consultant Jim Erickson.
The four obtained financing and closed the deal in November of 1999.
One of the assets transferred to Gateway was the $7 million loan that had been negotiated between Leary, who then was Ketchikan Pulp manager, and the borough.
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