A Seattle-based company may have run out of time to harvest 12,000 acres of eucalyptus and maple planted in the Waiakea Forest Reserve on the Big Island.

The Department of Land and Natural Resources said it will recommend today that land board officials declare Trade-winds LLC in default of a 10-year agreement with the state signed in August 2001. As part of that agreement Tradewinds was expected to build a $30 million to $40 million timber processing plant employing about 400 people by the end of this year.

However, difficulties obtaining financing have set the project back substantially. The earliest the plant could be completed now is November 2008 — a three-year delay.

A decision to cancel Trade-winds' arrangement would be a setback for Hawai'i's $31 million timber industry, but it allows other parties the opportunity to harvest the state-owned timber planted in the 1960s.

Tradewinds partner Don Bryan declined comment yesterday. However, Bryan is scheduled today to ask the land board for more time to secure needed funds.

In a meeting in May, board members said Tradewinds would be declared in default if it missed a July 1 deadline to raise $1 million in binding investments. That deadline was missed.

Hawai'i Forest Industry Association president Stephen Smith said the group supports Tradewinds' effort to seek more time to build its timber processing plant that could provide jobs in the Hilo area.

"If you declare Tradewinds in default, you have to go back to the rebidding process," Smith said. "It would be a setback."