Governor Kitzhaber Announces $1 Million Loan to Support Jobs and Reopen Rough and Ready Lumber in Cave Junction

Press Release

Governor Kitzhaber today announced a $1 million dollar loan package to help Rough and Ready Lumber reopen for business in Cave Junction. Along with other measures, the financial support from the Governor's Strategic Reserve Fund will allow the third-generation, family-owned mill to serve its customers and support local, well-paying jobs.

"It is a great day for Southern Oregon, and for the whole state, when we can celebrate the reopening of a family-owned business that provides family-wage jobs for its employees," said Governor Kitzhaber. "We must continue to find a balance between ensuring a healthy timber industry and protecting our forests for the many benefits they provide. The people of Cave Junction and Southern Oregon are willing to meet this challenge head-on. I am here to support them in any way I can."

Rough & Ready's owners, Jennifer and Link Phillippi, announced in April 2013 that they would close the mill, ending its 92-year run. The mill needed costly improvements. The lack of an adequate supply of federal timber to ensure a sustained and profitable operation prevented the business from receiving the financing needed to retool. The closure of the mill resulted in the loss of 88 jobs.

The Governor directed his advisors, including his Southern Oregon Regional Solutions team, to work with the Phillippis on pathways to reopen the mill. Over the past year, the Governor's Office, Business Oregon, the Oregon Department of Forestry, Ecotrust, and the Southern Oregon Forest Restoration Collaborative joined with the Phillippis to identify an adequate source of timber and secure financing so the mill could reopen its doors and get Cave Junction back to work.

The $1 million loan announced today will provide operating capital while Rough and Ready modernizes its mill to improve efficiencies. The package includes a $250,000 loan with a 5-year term. The remainder is a forgivable loan dependent on the company creating at least 60 new full-time jobs.

The Phillippis, who have already started the hiring process, look forward to putting people back to work. "We are overjoyed at the prospect of opening a revitalized sawmill and hiring 67 employees from our community," said Jennifer Phillippi. "We thank Governor Kitzhaber and his team for their creative work and support, which gave us the confidence and ability to move forward and take advantage of the New Market Tax Credit program."

The state of Oregon agreed to make state New Market Tax Credits available to Ecotrust, which will combine the state allocation with a federal allocation of tax credits to assist in financing the mill's improvements. "Maintaining mill infrastructure is critical to the health of forests and communities of rural Oregon," says Bettina von Hagen, Managing Director of Investments and Community Engagement at Ecotrust CDE. "This new financing will allow Rough and Ready to reopen and upgrade their small diameter mill, providing infrastructure for forest management and much needed jobs, now and in the future."

The project also identified opportunities for increasing federal timber supply not only for Rough and Ready but for other regional companies as well. The forest restoration program was developed by the Southern Oregon Forest Restoration Collaborative (SOFRC). The program balances restoration, habitat conservation, old tree protection, and the use of existing roads to identify a long-term supply of timber. George McKinley, Executive Director of the SOFRC, praised the news. "Not only does this create jobs in the community, it also enhances our capacity to restore federal forests, which in turn reduces the risk of fire to communities and improves forest health."

At the Friday morning press conference, the Governor thanked the Bureau of Land Management and the U.S. Forest Service for their role, noting that he recently sent a letter requesting their involvement to ensure implementation of the restoration program.

Today's announcement was made at Cascade Wood in White City, which manufactures window frames, door frames, and other products. President Gary Moore and his team often source wood from Southern Oregon mills like Rough and Ready.

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