Posted on: Saturday, May 14, 2005

Big Isle timber project set back

By Sean Hao
Advertiser Staff Writer

A project to build a timber-processing plant on the Big Island faces the chopping block, unless at least $1 million in binding investment agreements are found by July 1.

The Board of Land and Natural Resources yesterday extended a deadline for Trade-winds to obtain financing after the company assured officials its plans were progressing. Seattle-based Tradewinds LLC signed a 10-year agreement with the state in August 2001 giving it rights to harvest 12,000 acres of eucalyptus and maple planted in the Waiakea Forest Reserve in the 1960s. However, difficulties obtaining financing have set the project back.

Yesterday Don Bryan, a Tradewinds partner, said the company secured $60,000 in cash, a memorandum of understanding for $650,000 and a letter of intent for $400,000 in financing. The state board responded by telling Bryan that he needed to secure binding agreements for $1 million by July 1, or face losing his license.

Board members appeared impatient with the project, which is well behind schedule.

"You know you're on the edge of the cliff," board member Timothy Johns told Bryan.

"We've been on the edge of the cliff for years," Bryan responded. "We'd like to get off the cliff and begin our work."

Should Tradewinds meet the July 1 deadline, it would face the added hurdle of raising $14 million to $18 million by Oct. 31, which will be needed to finance construction. The project also will require an estimated 17 state and federal permits.

Additionally, Bryan said Boston-based Prudential Timber Investments Inc. scaled back on commitments to supply Tradewinds with wood from Prudential's 21,000-acre Hamakua eucalyptus forest.

"That's significantly reduced the amount of wood available to us," Bryan said. "Where we had initially planned on sort of a three-shift posture, we'll start out with a one-shift posture."

That means the plant, which would produce finished veneer products locally, would create about 100 jobs instead of the 400 jobs originally envisioned.

Bryan said he remained hopeful the project was still on track and that construction could begin next year.

"I wouldn't be here if I didn't think it was going to work," he said. "When I think it won't work anymore, I'll tell the board it won't work anymore and I'll stop doing this."

Reach Sean Hao at 525-8093 or shao@honoluluadvertiser.com.