PORT ANGELES — The last light bulb at Peninsula Plywood will be turned off in two weeks unless the mill can find a new owner.
The closed mill on Marine Drive signed an agreement with the Port of Port Angeles on Tuesday to voluntarily vacate the 18-acre site.
It says the company, unable to pay its rent, must leave in 14 days.
PenPly ceased production mid-November.
As of Tuesday, the mill had seven people on hand, including three administrators and four maintenance personnel.
It employed about 130 people at its peak in July after receiving an infusion of $500,000 from the state Department of Commerce.
Josh Renshaw, company president, said he is seeking a new owner for the mill, which was restarted by a group of local investors in March 2010 after lying vacant for more than three years.
Renshaw said that’s the only option for saving the facility and preventing an auction of its assets by lenders.
“It’s not a completely dead hope,” he said.
“We’re talking to various parties to see if we can get something that works for the banks to save these jobs.”
Renshaw said the mill is out of cash and unable to pay any salaries, including his own, or the $82,783 it owes the port for rent and the $293,092 it owes the city of Port Angeles for utilities.
The Port Angeles City Council on Tuesday, after having tabled the issue three times over two months, authorized staff to seek reimbursement for the funds.
City Manager Kent Myers declined to comment on the city’s options.
Renshaw said he will continue seeking a new owner after the company vacates the property if it is still seen as a viable option.
He doesn’t expect an auction to take place for at least two months.
In terms of what sank the mill, it wasn’t an issue of a lack of orders, he said.
Renshaw attributed the closure mainly to the mill not having enough veneer, wood used to make plywood, in stock to fill the orders or make the most profit off them.
That was mainly because of a lack of funding from the beginning, but the mill also ran into a shortage issue with its supplier after it received the Commerce grant, meant to keep it from closing, he said.
“We got pretty close,” Renshaw said.
“We just couldn’t get there.”
A fire in May 2010 also set the mill back, he said.
PenPly’s investors had provided the mill an additional $700,000 in order to receive the grant.
Renshaw estimated the mill needed another $300,000 to $400,000 to make it.
“I had confidence that if we got the grant money, we would be able to make it work,” he said.
So did Commerce, according to agency spokeswoman Penny Thomas.
“We were shocked,” she said.
“We were very hopeful that the money was going to get them over the hump and save jobs up there.”
In order to receive the grant, Thomas said, the mill had to show it would have enough orders to survive if it had the money.
“We would certainly have not have made the grant if we thought the mill was going to close,” she said.
Renshaw said he doesn’t think the grant was a total loss for the public since the mill was able to provide $2 million in payroll since receiving it in June.
“There was a net benefit to the community,” he said.
The grant wasn’t the only assistance Commerce provided the mill.
The state agency loaned PenPly $1 million at its start.
The mill had paid $15,305 in principal and interest, according to Commerce. But due to accruing interest, it owed $1,000,192 as of Tuesday.
PenPly also received help from the U.S. Department of Agriculture.
Through its rural development program, the department backed two private loans up to 90 percent.
The loans, from Sound Community Bank and Enterprise Cascadia, totaled $1.9 million.
Phil Aggamm, USDA spokesman, said last week it was unclear how much the company still owes on the loans.
The lenders, Sound Community Bank and Enterprise Cascadia, declined to release that information, citing confidentiality.
Renshaw declined to comment on the loans.
He said the mill’s log debarking operation will continue only under new ownership.
The mill debarks logs that are being exported to China.
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Reporter Tom Callis can be reached at 360-417-3532 or at tom.callis@peninsuladailynews.com.
