Veneer Mill Shut Down
By Mary Lynn Dahl
March 12, 2008
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
Mary Lynn Dahl
About: "Local investment
professional who is concerned for the financial well-being of
Received March 11, 2008 - Published
March 12, 2008
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