PORT ANGELES — Port of Port Angeles commissioners on Monday voted to take another step toward helping the shuttered plywood mill reopen.
The Port of Port Angeles commissioners unanimously agreed to sign a letter of intent to enter into a lease with Peninsula Plywood Group LLC, of the former KPly mill site.
“We are pleased that Peninsula Plywood Group has chosen to move forward with restarting the KPly mill,” said John Calhoun, port commission president.
“The port commission has confirmed many times over the last several months that it supports family-wage jobs and that our interest is to create jobs on the former K Ply mill site.”
Josh Renshaw, who has spearheaded the effort to start up the mill and has been negotiating with the port and Sterling Bank for more than a year, did not return calls for comment.
The amount of the lease was not available Monday.
The letter of intent includes several conditions:
•The port will defer 100 percent of the rent for the first three months of the lease.
•An additional 50 percent will be deferred for the next two years.
•The balance will be made up over the course of the next eight years of the 10-year lease.
•Within 90 days of the start of the lease, Peninsula Plywood is to hire no fewer than 60 full-time employees.
•Repair of the mill must start within 45 days of the start of the lease.
When the lease begins will depend on its formal approval by the commission and when it is signed by Peninsula Plywood executives, said Bill James, port interim executive director.
A date for that formal approval has not been set.
“This will help them have some breathing room at the beginning with startup costs, and we will be paid back over the next several years,” Calhoun said.
“All the dollar figures and the schedule of repayment and such will be available when we formally adopt that lease.”
The plywood group signed an agreement to buy KPly’s mill equipment in mid-June with closing expected to take place Wednesday.
Closing of the purchase was dependent upon Peninsula Plywood coming to terms with the Port of Port Angeles on a lease of the 19-acre property on Marine Drive.
“We are pleased that Peninsula Plywood Group and Mr. Renshaw have committed to that job-creating goal, and we look forward to having the full complement of employees shortly,” Calhoun said.
“Along with the port reaching an agreement with Peninsula Plywood Group, the city of Port Angeles has played a major role in providing assistance to the mill startup in the form of utility and infrastructure support.”
Klukwan permanently laid off 132 employees in April 2008 after closing the mill in November 2007.
The investors’ plans for the mill — which has had several owners since it opened in 1941 — are to reopen it under its original name, Peninsula Plywood, with about 172 employees, and produce 5 million board-feet of plywood a month.
The port, which owns the property the closed mill is on, seized the mill’s buildings after Klukwan failed to pay its outstanding rent.
Sterling Savings seized the mill’s equipment after Klukwan failed to repay its loans with the bank.
Renshaw has said the mill would have a niche market and be less affected by the downward trends in home construction.
Its products would require use of Douglas fir trees with minimal defects and cedar trees that aren’t in abundant supply. Therefore, Renshaw said, the demand for these products would continue to be in line with the available supply.
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Reporter Paige Dickerson can be reached at 360-417-3535 or at paige.dickerson@peninsuladailynews.com.
