A Washington state timber industry consultant said in early January that he plans to have the former Gateway Forest Products veneer plant at Ward Cove up and running by May, bringing 40 new jobs and a $1.2 million payroll into the Ketchikan Gateway Borough economy.
"Wages will be about $12 to $15 an hour, good enough for people to live off of," said Ted Falconer of Gig Harbor, Wash., and a retired plywood manager for Weyerhauser Co.
Falconer said he plans to have the plant open "as near to May 1 as possible." He also has plans for a plywood operation to open about 18 months later, adding an additional 60 jobs to the business. Operation of the veneer plant alone would likely add other area jobs, bringing the economic benefit to the area to about $2 million annually, he said.
Borough mayor Mike Salazar applauded the deal that was approved Jan. 3 by the borough assembly. "It's good for the Ketchikan economy and good for the development of Ward Cove," he said. "It looks good and we are going to continue to move on. There's an ethanol plant that looks like it might open up after this thing gets going."
"We have worked through environmental issues, funding issues and timber supply issues to make it a reality," said Ketchikan Gateway Borough manager Roy Eckert. "The entire community is excited, not only for Ketchikan but for the impact this will have on the entire Southeast region."
The five-year lease comes with two automatic five-year extensions, and an option to buy the plant for $1.5 million in the fifth year. Falconer said that initially his company, TF Inc., would pay $500,000 cash for the machinery at the plant and complete purchase of the plant itself "when we see fit."
Falconer estimated the new veneer plant, as yet unnamed, would produce about 75 million board feet of veneer annually. Wood for the plant will come from state lands, Mental Health Trust Authority lands and from Canada, he said.
Falconer said he planned to start seeking employees in March. "I'm very prone to hiring ladies too, single parents, mothers who need a job," he said. "They need the work and they come to work. The biggest problem we have is getting people to come to work five days a week."
Initial plans are to ship the veneer via barge to sell in Washington state and Oregon, he said. "Later, when we put in a dryer, a press and a saw, we will leave it in Ketchikan and make it into panels," he said.
Falconer said he was still working on the business plan, which he expected to have completed about Feb. 1. A feasibility study has already been done, he said.
The prospect of the veneer plant reopening has aroused some concerns from the Natural Resources Defense Council, a national environmental action group.
"We support a sustainable timber industry in Southeast Alaska, provided the roadless areas are protected," said Sami Yassa, a senior scientist with the NRDC. "We want to get the protections in place so that demand isn't displaced to the roadless areas. A year ago, this policy was in place. The (U.S.) Forest Service unilaterally revoked this policy. I think for a guy like Ted Falconer, certainty (of supply) is important. I think the Forest Service is creating the greatest uncertainty for ventures like this."
Yassa said the NRDC hopes to meet with Falconer to express its concerns. "If the Forest Service would reinstate this roadless area policy, we would not oppose a responsibly operated mill," he said.
The former Gateway Forest Products opened in the veneer mill in January 2001, but filed for bankruptcy protection a month later. Falconer said when Gateway opened the plant, officials there asked him to run it, but the pay was a third what he was earning at the time, so he declined the offer.
The borough purchased the veneer mill for $2.6 million in the summer of 2002, moments before it was to be auctioned off. The borough previously had spent about $17 million in federal money on the veneer project.
The borough is now hoping to attract others interested in buying or leasing land at Ward Cove near the plant, Salazar said.
"It's probably costs us more than $400,000 a year just in holding costs (for utilities)," Salazar said. "The quicker we can dispose of them, the better off we are."
The property, once owned by the Ketchikan Pulp Co., is in a protected location with road access. Under a plan approved by the borough assembly Jan. 2, the borough will accept sealed bids through March 31 for other area properties.
The borough also plans to retain its dock, along with property needed for utilities, sewer sludge treatment, a public works garage and a future fire hall.
The Associated Press contributed to this story.
