PORT ANGELES — Peninsula Plywood Group LLC has hit a “bump in the road” with getting the bond it needs to move into the former KPly mill, its top official said Monday.
President Josh Renshaw told the Port of Port Angeles commissioners there are solutions to the impasse keeping PenPly from moving into the site on Marine Drive.
Renshaw said he received an “unexpected response” from the bonding company that was “very different” from the original response.
“We don’t believe the issue is insurmountable,” Renshaw said.
“In business, there’s always bumps in the road. It’s just a part of the process. It’s just the way that it goes.”
According to a 20-year lease the port signed July 31, PenPly must pay the lease on one year’s rent — and provide property and liability insurance — before its gets the keys to the 19-acre property.
“We have had a bump in the road on the bond issue,” Renshaw told the commissioners.
PenPly has until Friday — 10 business days after the lease was signed — to come up with the $162,000 bond.
Office space
In the meantime, the Port of Port Angeles is providing a room in its administration building for PenPly to assemble a staff.
“When [Renshaw] provides us the lease bond, pending insurance, he’ll be ready to move right into the building to start working,” said Bill James, the port’s interim director.
“So that’s where we are today, waiting for the bond and waiting for the insurance.”
Renshaw thanked the port for supporting his company, which he says will put 172 people to work.
PenPly must hire 45 employees within the next three months to comply with the lease.
Repairs to idle equipment used by Klukwan Inc., which stopped production in November 2007, must also begin in 45 days.
“I guess I am a little bit concerned,” Renshaw said of the bond issue.
“I’m not sure it’s constructive to speak about ongoing, pending issues when they’re not in default or anything. It casts dispersions, even unintended. It is not very constructive.”
The monthly rent for the property is $13,500 plus a 12.84 percent lease hold tax.
James said Renshaw is “not required to come up with a full year’s rent but rather a lease of that amount.”
Assemble senior staff
Commissioner George Schoenfeldt asked Renshaw about the hiring of senior staff.
PenPly has a superintendent of maintenance, superintendent of production, controller, log buyer and lead salesperson, Renshaw said.
“So that’s the primary backbone of the management team,” he said.
“These are good people, too. These’s are very good people — top people — and very highly regarded in the industry. They provide a great deal of expertise, and they’re excited to move forward, too.”
The lease with PenPly is likely to come up at the next Port of Port Angeles meeting Aug. 24, James said.
“We would expect at the next meeting we’ll be reporting that they are up and running, and we’ll be supporting them the whole way,” James said.
“We’re all looking forward to that,” added John Calhoun, president of the Port Commission.
Klukwan Inc. closed the KPly mill in April 2008 and permanently laid off 132 employees.
Renshaw, who was a sales manager at the mill, has said PenPly’s goal is to produce 5 million board-feet of plywood a month.
Norma Turner, who opposed the port’s $500,000 loan to the Harbor-Works Development Authority, asked the board to consider a loan to Peninsula Plywood.
“I’d urge the commissioners to look at giving the same loan to Peninsula Plywood, and they can promise to pay it back later, just like the [public development authority] is promising,” Turner said.
“That would get the thing up and going and getting the jobs created because that’s what the port’s about, is economic development and jobs.
“Now that you’ve set this precedent, I hope that local investors can get the same kind of investment.”
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Reporter Rob Ollikainen can be reached at 360-417-3537 or at rob.ollikainen@peninsuladailynews.com.
