Veto won't halt Big Isle plywood mill
Gov. Lingle rejects a proposed $25 million in bonds for the mill
HILO » Tradewinds Forest Products is on track to start building a plywood veneer mill north of Hilo around February despite Gov. Linda Lingle's veto of $25 million in bonds for the mill yesterday, company President Don Bryan said.
When Lingle earlier gave notice that she may veto the bond bill, Bryan said the mill can be built without the bonds because partial funding via bonds was only an "option."
The mill at Ookala, 30 miles north of Hilo, will cost about $40 million, half from private investors, half from bank loans, Bryan said. Not all of the investor money is lined up, and a bank loan would come only after that, he said.
The veneer mill, on the site of a former sugar mill, would use eucalyptus trees from Big Island plantations to create the thin sheets of wood that make up plywood. This veneer would be shipped elsewhere to make finished plywood.
In vetoing the bill, Lingle said that for technical reasons, the most Tradewinds would have gotten would have been about $10 million. Bryan agreed.
Interest from the bonds would have been free of federal taxes for the buyers, but no state money would have been risked, Bryan said. If Tradewinds defaulted, that would have been like a default on any private bond, he said.
Although the Legislature authorized the bonds, saying jobs created by Tradewinds would be in the public interest, Lingle said there are "serious questions" about a public purpose.
Noting Tradewinds' five-year delay in getting started, Lingle said, "It is unclear whether the project will produce the local products and jobs anticipated in the bill."
"Unfortunately, it appears the proposed project has not been adequately explained to the community," Lingle said, referring to opposition from nearby residents.
Bryan said he met with 40 Ookala residents in December, and 39 were in favor. Opponent Tawn Keeney did a survey recently and found 81 of 131 residents opposed the project because it was misrepresented, Bryan said.
Keeney said he tried to be neutral and to use the terms in his survey that Bryan used.
Keeney was "elated' by Lingle's veto, but added, "I don't think it's going to make Tradewinds go away."
Bryan said he'll meet with Ookala residents to explain the project further.