Mill’s family together again

Harbor Paper celebrated its grand opening on Monday with pomp and circumstance, tours, speeches by leaders, including Gov. Chris Gregoire, a whole lot of big smiles.

But the real work starts now. For the first time, Harbor Paper CEO John Begley says that the mill’s second paper machine will start working this morning. That means increased production times, extra capacity and more domestic shipping operations as the company tries to recapture some of the market it lost in March of last year when its predecessor, Grays Harbor Paper, shut down.

The first paper machine started in September, when steam could first be seen coming out of the stacks during the Loggers Playday parade. The plant had been producing typical copy paper until just last week, when the company re-launched its Harbor 100 brand — made with 100 percent recycled content.

At one time, the Harbor 100 brand was bought by the City of Seattle, Nike, REI, the Seattle Mariners, World Bank and many others.

Begley said the company’s first goal is to reacquire a lucrative contract with the State of Washington and says they’re trying to work out deals with other old customers.

The company is a bit leaner now — 176 employees instead of about 230 when the mill closed last year. And the company is contracting out its trucking services, instead of relying on a sister company of Grays Harbor Paper that shut down at the same time.

The mill is non-union now, when before it had union employees. Begley says he’s paying comparable wages, although some employees say they’re making a little less than before. Many, frankly, don’t care. Grays Harbor has the highest unemployment rate in the state at 12 percent and many had been on unemployment before getting their jobs back.

Harbor Paper LLC is owned by Elliott Rust Holdings LLC. And the holdings company, in turn, is owned by just one man — Cesar Scolari of Gig Harbor. The two worked out an arrangement with financier Craft3, which used the small business credit initiative through the state Department of Commerce to leverage a line of credit to purchase the mill.

Gov. Chris Gregoire called it a perfect scenario of using state assistance to help a private company re-invest to help bring jobs back to one of the hardest hit areas of the state.

“This mill has been making paper at this site for 84 years,” Gregoire said. “Generations of Harborites have worked here. This is not just a business, this is a family and when the place went down we lost a family. We’re back together as a family.”

Scolari made his first public appearance at the grand opening on Monday to huge applause.

“If you’re curious what our intent is, we want to be here for many, many years,” Scolari announced. “And I promise you that we will contribute always to make this a great place to work and that is our philosophy from day one.”

Scolari says he had basically retired to his home in Gig Harbor. He had made his money by founding StaffWorks Inc. of San Clemente, Calif., a major distributor for large grocery stores such as Kroger and Safeway. He sold it five years ago.

“I was home, in my garden planting,” Scolari said in an interview.

Begley had been searching for a year or so for potential investors for the mill when mutual friends introduced Scolari and Begley to each other.

“Begley showed me his business plan and in that he explained very patiently in his kind, soft-spoken way that this is a great opportunity,” Scolari said. “He had everything lined up and I didn’t know why he didn’t already have an investor because it seemed such a wonderful opportunity. And I thank God it all came together. …

“He told me the story of this mill and even though I wasn’t familiar with this community at all, I understood,” Scolari said.

Scolari said his only expectation at the mill is “to just provide jobs and make paper from paper using green energy and have a sustainable organization to stay here for many years to come. I want you to know that we have no plan to build and sell here. We will make smart decisions for this organization.”

Begley and Scolari acknowledge the challenges that forced the mill to close are still present, especially from the high cost of raw materials. But because the mill went through a court-appointed receiver and its assets sold to Scolari’s holding company, the old debt has been wiped clean, allowing a fresh start for the company.

The grand opening on Monday at paper warehouses surrounded in the new Harbor Paper logo and boxes of Harbor 100 was part of that fresh start.

Scolari and Begley joined Gregoire, Congressman Norm Dicks, Hoquiam Mayor Jack Durney, state Sen. Jim Hargrove, Craft3 Vice President Arnie Gunderson and former congressman Jay Inslee on a make-shift stage to celebrate the re-opening.

“Cesar, thank you for your faith in Grays Harbor,” Gov. Gregoire said, turning to Scolari. “You know, this is a family you can count on and now you’re a part of their family. Thank you for your investment in Grays Harbor.”

Durney said that a lot of thanks goes to the interim team that kept the plant running in the year the mill was in legal limbo — Steve Beck, Bill Swantek, Bill McClelland, and Tom Bodwell in the main mill, John Pellegreni in the power house, Mike Welliver in the water treatment plant and Brad Bonell in the physical plant.

Dicks used the re-opening as a way to say farewell to the Harbor, noting he much preferred coming to mill openings than closings, although his office was instrumental in getting re-training benefits for laid-off workers.

“Unemployment is still too high but the people here never give up,” Dicks said. “And that’s why I’m proud to have been your congressman and to have supported this effort to get this mill. … I will always be a friend to the people of Grays Harbor.”

“When the mill went down it was so depressing to see no steam coming out of the stack on the power plant so when I came around the corner the first time the mill started up again, I have to say I shed a little tear because this mill is so important to the economy of Grays Harbor,” Hargrove said.

Dave Miller said that he came out of retirement to come back to Harbor Paper as a production coordinator so he could train others how to do his job.

“I first started here on May 1, 1977 — I’ve been through two mill shutdowns now,” Miller said. “Twice, I’ve gone through re-training. I didn’t have to come back, but I did because I want to help this mill succeed. I have the experience to know how this job works and a desire to make sure this mill is here for the next generation.”