The Port of Shelton is one payment away from paying off its first loan from the state’s Community Economic Revitalization Board (CERB). The $280,000, 20-year loan was issued in 1996 for construction of a new building for a softwood mill on John’s Prairie. That mill was occupied by North Star Lumber Company until it shutdown in 1999 after filing bankruptcy.
According to an article in the June 17, 1999 edition of the Shelton Mason County Journal, the Port was one of five to sue the company and its owners after the mill ceased operating. The Port relied on rent from North Star to repay the CERB loan. A quote in the article from the Port’s Auditor at the time, George Fox, indicated the Port of Shelton was obligated to repay the loan regardless of whether or not North Star paid rent on the building. Fox also told the Journal the building needed to be used as a mill – the purpose of the loan.
The Port did defer payments to CERB while seeking anther tenant for the mill at 340 E. Millwright and in 2004 Willapa Bay Hardwoods leased the building. The Port’s Executive Director, Wendy Smith, told MasonWebTV Powered by HCC, Willapa Bay didn’t operate the mill but paid rent until 2013.
The mill building is now occupied by a cannibas operation.
During the Port of Shelton Commission’s meeting Tuesday, Commissioner Sue Patterson explained that Port sent a $17,422 payment to CERB for that North Star loan and they are one annual payment away from paying it off.
“We have a bonding capacity based on our overall assessed valuation and then we can take a percentage of that to go out for bonds,” Director Smith said in explaining how paying off this loan improves the Port’s bonding capacity. “We still have a huge amount of bonding capacity. We’ve only touched the surface. As these come off of our schedule, it just adds in more ability to do more projects.”
The Port’s other debts include 20-year bonds issued in 2003 and in 2005.
The Port Commission asked staff to look into making the final payment for the North Star loan early to save another year of interest.
In recent years, the Port of Shelton has developed partnerships with current tenants and CERB for loans that are similar to the North Star Lumber loan. However, there is language in the leases with Lynch Creek Farm and Belco to protect the Port. And those funds are dedicated to a specific use.
“With the CERB fund we’ve gotten recently, the purpose and the money you spend has to be on what you said it was for,” Smith said as we wrapped up our phone conversation. “We can’t change directions.”
A decision on whether to pay the North Star Lumber loan off early could come next month.