Terrace Lumber goes down again, now on the auction block!

The auctioneers have moved in and the great experiment in keeping a part of the forestry history of Terrace will soon be coming to a close.

The began an auction at the Terrace Lumber Company site today, lot after lot after lot of deals waiting for a bid and a bang of a gavel.

It was reborn after the failure of New Skeena Forest products and almost went up for auction in 2005, only to be rescued by local business men who used a 1 million dollar loan from the City of Terrace to try and get the operation back to a healthy state.

With delays and uncertainty over the pulp mill in Prince Rupert, the market for any chips that might be generated by the mill became smaller and the state of the lumber industry in general in Canada over the last few years worked against a re-birth as well.

As the months would go by it became apparent that it was going to be a struggle to make a go of it and the mill shut down for good this past summer. Maynard’s auction took over the file and began setting up for the auction earlier this week, with the first bids accepted today.

The Daily News covered the developments on its front page and the auction was covered extensively on the Terrace Standard website.

TERRACE’S FORMER SKEENA MILL ON THE BLOCK AGAIN
Auctioneers set to sell mill today after TLC’s efforts to restart it falter
By Leanne Ritchie
The Daily News
Wednesday, October 25, 2006
Pages One and Two

An attempt to revitalize a piece of the old Skeena Cellulose empire dies today with the fall of a gavel.

Maynard’s Auction is in Terrace today and tomorrow to sell off the assets of the Skeena sawmill, following a failed attempt by a community group to restart the business.

At the request of the board of directors for the Terrace Lumber Company (TLC), the sawmill is being auctioned off today and the planer mill and rolling stock tomorrow.

Also for sale is the 73 acre mill site.

The sawmill, part of the former operations of Skeena Cellulose, was shutdown in 2002 and sold by the province to New Skeena Forest Products.

While just days away from being put on the auction block in 2005 following the bankruptcy of New Skeena Forest Products, a group of Terrace businessmen formed TLC and purchased the operations and land with the help of a $1 million loan from the city of Terrace, which the municipality secured by placing a mortgage on the land.

Close to a thousand people gathered in Terrace to celebrate when TLC purchased the mill from the bankrupt New Skeena in August 2005.

The equipment was purchased during the bankruptcy for $3.2 million, which was consistent with what the receiver believed the equipment was worth at auction, and the land was bought for another half a million, although the land had a market value around $2 million.

The mill started running one shift a day, employing 70 people and producing 700 cubic metres of lumber a shift. However, lumber markets have been difficult.

During this past summer, John Ryan of the Terrace Lumber Company said they would be shutting down operations and that unless an investor stepped forward, they would have to go to auction.

Yesterday, it was confirmed that the auction is going ahead.

No one from the Terrace Lumber Company was available for comment.

Former mill manager and New Skeena Products president Dan Veniez said repeatedly that the sawmill was not viable without the operation of the Watson Island pulp mill in Prince Rupert and vice versa because of the decadent fibre basket in the Northwest.

The pulp mill was purchased by a group of Chinese investors known as Sun Wave Forest Products. They are understood to be seeking start up financing for the mill.

However, Ryan, in an interview this August, said the failure of the company had more to do with the high Canadian dollar, unstable lumber markets and the high cost of harvesting timber in the rotting Northwest profile than the lack of a pulp mill.

“The pulp mill operating would have made a little bit of difference but not a lot. The price of saw logs would have been perhaps a little cheaper,” said Ryan, at the time.


All kinds of stuff is on sale today at Terrace Lumber
By SARAH A. ZIMMERMAN
Terrace Standard
Oct 25 2006

SO, JUST how good are the deals at today and tomorrow's auction at the Terrace Lumber Company's sawmill and planer?

Depending on the item people could spend anywhere from $20-$150,000.

And with more than 2,000 lots up for grabs over the next two days, there is plenty to choose from.

Even the few logs that remain at the mill have white tags with a lot number on them.
Officials from Maynard's, the auctioneers hired to conduct the fire sale, have been in Terrace for nearly two weeks diligently tagging items ranging from collections of hand tools and office supplies to front end loaders and forklifts.

But what the items will go far is all up in the air, says auctioneer and project manager Mike Seibold.

A giant Ahlstrom chipping head - a menacing looking circular shaped saw - should fetch in the range of $15,000, but "You never know," says Seibold.

"That's the thing with a sale - sometimes stuff will go up in price some will go down."

Equipment is laid out throughout the mill's property - in the yard and inside the sawmill proper.
A row of ladders, wheelbarrows and metal garbage cans filled with brooms, shovels and other tools, line one area, each item or group of items neatly tagged.

The collection of hand tools can go for anywhere from $50-$100, while the dry kiln alone could fetch in the range of $150,000, says Seibold.

Also up for grabs is the sub station across the street from the sawmill, which could also got for $175,000.

The selection of forklifts varies from newer models to older ones, and the prices could go anywhere from $20,000 to $70,000, Seibold says.

"It depends, everyone is kind of particular about what they like," Seibold said.

Seibold has been fielding upwards of 50 calls per day for the last week from people making inquiries about the Terrace Lumber Company auction.

He's received calls from all over North America including California, Oregon and Idaho. He's also had some interest from potential buyers in New Zealand.

The two-day auction starts today, Oct. 25 at 9 a.m. The first day will consist of larger items in the sawmill and the next day will see all the rolling stock, planer mill items, vehicles and office supplies going on the block.

Seibold says the auction won't stop until everything has been sold.

"We're here until we're done," he said. "We'll sell it all."

Those who do purchase items from the auction are also required to pay a buyer's premium of 12 per cent if they are on site and 15 per cent if they place winning bids on line. The premiums are paid to Maynard's as part of its fee and are not part of the revenue going to the Terrace Lumber Company.