SitNews - Stories in the News - Ketchikan, Alaska


Veneer Mill Shut Down
By Mary Lynn Dahl


March 12, 2008
Wednesday AM

The veneer mill operated by Renaissance Ketchikan Group, LLC, a corporation owned by Jerry Jenkins, is now delinquent on more than $100,000 in property taxes. Tax delinquency normally results in foreclosure, unless all back taxes and penalties are paid. That seems unlikely, since the mill has shut down several times and is currently shut down yet again. Most of the mill employees have been laid off, unfortunately.

The reason that Mr. Jenkins gives for the current shut-down is that "a lack of Canadian log resources due to weather and an unfavorable Canadian-American exchange rate has curtailed operations". I would like to point out that the exchange rate between Canadian and US dollars has been "unfavorable" all along, since the beginning of the reporting and production period. Further, I dispute that Canadian timber resources are lacking "due to weather". The November 5, 2007 issue of the Ketchikan Daily News says that a report prepared by the Borough Finance Department stated that Mr. Jenkins had a 5-year contract for timber with a Canadian supplier, with options for two five-year extensions . One month later, at the Ketchikan Chamber of Commerce meeting of 12/5/07, Mr. Jenkins said publicly that he had purchased 800,000 board feet from Alcan. We have spoken to a knowledgeable timber engineer who says that Alcan has "plenty of logs and will sell them to anyone who will pay for them".

In that same November 5, 2007 news story, the same report prepared by the Borough Finance Department stated that "RKG placed a private placement of $10 million in securities in November 2006, on deposit with Alliance Bank of Arizona, and that RKG has access to the funds upon presentation of acceptable replacement collateral". At that same Chamber of Commerce meeting on 12/5/07, Mr. Jenkins said that private investors had looked at the deal and more were coming to Ketchikan to also look at it. In an effort to detail how his company, Renaissance Ketchikan Group, LLC obtains financing, Mr. Jenkins in an online article in Sitnews dated October 22, 2007, explained that Renaissance Ketchikan Group, LLC has done a series of bond finances - private placements - where they go out and get investors to put together a pool of money, and is quoted as saying "What we can then do is that we provide legitimate replacement collateral real estate, operating businesses. We can then borrow from that bond pool at a cheaper rate".

Mr. Jenkins was attempting to get financing from investors, using the Ward Cove properties as "acceptable replacement collateral" in order to access the private placement bond offering referenced above, because he said he could not get financing from banks. He is, however, unlikely to succeed in this effort because he is not legally registered or licensed to offer private placement bond offerings (or any securities) in Alaska. At last check, he is also not licensed or registered to offer private placement securities to investors in Arizona or Idaho, the other states where Renaissance Ketchikan Group, LLC is incorporated.

The bottom line is, without positive cash flow he cannot pay interest, back interest, penalties and taxes. In addition, without financing, he cannot pay the principal he owes.

We have wasted 2 years on this sorry affair. It is long past time to foreclose. We need to tell Mr. Jenkins it is over, to clean up the mill site and leave. The chips can be sold to the public by the truckload, as landscape material. The property should be put back on the market and perhaps sold to properly capitalized buyers who can create real jobs and pay with real money.

Mary Lynn Dahl
Ketchikan, AK

About: "Local investment professional who is concerned for the financial well-being of this community."

Received March 11, 2008 - Published March 12, 2008


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