06.19.06

During Tour of New Hardwood Mill, Cantwell Announced Low Cost Loan for State-of-the-Art Facility

Cantwell helped secure $15 million USDA-guaranteed loan for new, 100-employee Port Angeles alder mill

PORT ANGELES, WA – On Saturday, U.S. Senator Maria Cantwell (D-WA) toured Port Angeles Hardwood’s new alder mill, which created nearly 100 new, family-wage jobs when it opened in May. Over the past two years, Cantwell worked with Washington Alder, Port Angeles Hardwood, and the U.S. Department of Agriculture (USDA) to secure a $15 million guaranteed loan. Cantwell announced the finalization of the loan during the tour Saturday.

“This new mill represents real growth and great opportunity for our workers and businesses here in Clallam County,” said Cantwell a member of the Senate Commerce and Small Business Committees. “Right here in Port Angeles, we’re breaking ground as innovators in the milling industry. This facility now serves as a model for other communities to follow, bringing good jobs and setting a new standard in efficiency.”

“Without this type of rock-solid guaranteed loan, the Port Angeles Hardwood project wouldn’t be the extraordinary success it is today,” added Cantwell. “The real work is here on the ground in Port Angeles, but I was proud to stand behind this application.”

The mill now employs 100 workers in Clallam County at an average salary of $62,000. Because the mill is close to where the alder trees are grown, the revenue generated from the production of furniture-grade lumber is kept in the community, adding an estimated $28 million a year to the local economy. The facility is also expected to create an additional 200 mill-related jobs with trucking and transportation companies, timber owners, loggers, machine shops, and suppliers.

Port Angeles Hardwood first purchased land in Port Angeles for the new mill in November 2004, breaking ground in May 2005. With Cantwell’s help, including calls to USDA officials and a letter sent in April 2005, the company then obtained a $15 million U.S. Department of Agriculture (USDA) Rural Development Business and Industry Guaranteed Loan to help finance the mill. The loan was finalized on June 9, 2006. This state-of-the-art facility uses computerized equipment and trained staff to maximize the amount of usable lumber produced from each log, and incorporates a number of features designed to minimize dust, noise, and pollutants. The facility uses its wood waste to run an onsite boiler that powers the lumber dry kilns. Excess sawdust is also sold to other energy producers or for use as soil additives.

The USDA Business and Industry Guaranteed Loan Program helps finance projects that will improve the economic and environmental climate in rural communities with populations of less than 50,000. Guaranteed loans make it easier for the rural business or individual to obtain capital and borrow at lower interest rates than they would otherwise be able to.

The guaranteed loan for the new Port Angeles facility does not represent the first time Cantwell has helped secure financing for a lumber mill. In 2003, Cantwell worked with USDA to help facilitate the purchase of Cascade Hardwoods in Lewis County. The finalization of the loan facilitated the reopening of the mill, creating over 250 jobs in Lewis County.

[The text of Cantwell’s letter to the USDA follows below]

April 8, 2005

Dear Administrator Hagy:

I am writing to express my support for the USDA/RD Business and Industry Guaranteed Loan application submitted by Port Angeles Hardwood LLC, of Port Angeles, Washington.

I understand the Business and Industry (B&I) Guaranteed Loan Program seeks to create jobs and stimulate rural economies by providing financial backing for rural businesses in rural areas. Port Angeles Hardwood is a well managed; well-respected milling company that I have worked with in the past with USDA/RD to provide just this type of job creation opportunity. This PA Hardwood mill will produce high-quality furniture grade alder and maple hardwoods for customers globally. The global market for hardwood products is growing and Washington state and specifically the Olympic Peninsula have a great abundance of hardwood tress that were traditionally a nonharvested resource in our forest. This has changed as the market for such fast growing hardwood resource products has grown for furniture needs. This project will provide a much needed opportunity for job creation and infrastructure development in rural community.

Port Angeles Hardwood believes there is great opportunity for a mill close to the abundant alder timber resources in Clallam County, Washington. On November 15, 2004, the company purchased 30.3 acres to build this mill that could employ as many as a hundred employees and provide much needed family wage jobs. The company is also committed to service and quality and will invest in innovative technology and manufacturing techniques in this new mill.

I am excited about the opportunity of locating a new hardwood mill in Port Angeles and believe this project is the perfect partnership for USDA/RD through your B&I loan program. It is essential to this project to have this private public partnership leverage, which will allow PA Hardwood to expand its lending capability in order to meet business and credit needs and benefit an under-served rural area.

Please give this application your full consideration.

Sincerely,

Maria Cantwell
United States Senator

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