Auction for assets of Harbor Paper in Hoquiam, Washington, starts with no bidders on offer to sell entire mill for US$5M; two-day event not expected to draw much interest for paper machines, which some bidders say are too old, not well maintained
February 20, 2014
(The Daily World)
– Machine by machine, tool by tool, bidders from all over the United States are buying up pieces of Hoquiam's Harbor Paper. Everything inside the crumbling building is up for grabs -- from room-filling paper machines to office supplies.
The auction, hosted at the Quinault Beach Resort & Casino, started at 9 a.m. Wednesday. The first thing on the block was a chance to buy the entire mill.
"They offered the whole thing up for $5 million," said Costas Kravas, who attended the auction. "And there were just crickets. Nobody was going to pay that much, and they weren't going to take any less."
After the failed attempt at selling the whole mill, the auctioneers moved on to the smaller items: a bird poop-covered John Deere lawnmower sold for $350, a drill press sold for $180 and a Hyster forklift sold for $2,000. The larger items will come up today.
Mike Beltgens, who operates a sawmill on Vancouver Island in British Columbia, had spent about $3,000 on various tools and trinkets by noon.
"Pulp mills are known for having everything under the sun," Beltgens said. "Back in the day, these places would make millions each day."
Other bidders waited for the larger items. Joel Kauffman, who works for Minneapolis-based Paper Mill Surplus, said he's waiting for pumps and other auxiliary items. He's willing to pay about $20,000 for some of the pieces, which will eventually be sold to mill owners in Mexico and China.
"We won't take the paper machines because they're too large to keep in our warehouse," Kauffman said. "They'd take up the whole thing." He said he's visited several mills to purchase machinery, but he hasn't seen many as dilapidated as Harbor Paper.
"You can tell that no one's been in there for a while," Kauffman said. "They haven't been repairing holes in the roof, so there are puddles all over the floor."
The mill hasn't had electricity since October, so potential buyers had to wander through the buildings with flashlights to inspect the items they wanted.
Kauffman said he found a skunk while exploring a dark room.
"I got out of there as fast as I could," he said.
Kravas, who works for Kravas equipment in Amboy, not far from Vancouver, Wash., said many of the bidders know each other from years of attending the same auctions.
"It's definitely a boys club," he said. "Everyone gets to know each other, so you go to these auctions and say, 'oh here's so-and-so.' "
He, like many of the other bidders, has his eye on machine parts that have been sitting on shelves unused. The used parts are basically worthless, he said.
"The mill's so old that the equipment's not worth much," he said. "There's not really a market for things that age."
Mike Seibold, who is managing the auction for Maynards, the auction company, said he doesn't expect the two paper machines to sell for much.
They were likely installed during the 1960s.
"Based on the age of the paper machines, we expect people to mainly be interested in them for scrap value," Seibold said. "They don't have much value beyond that."
Maynards currently owns all of Harbor Paper's assets, while Rayonier still owns the land.
Bidding continued at 9 a.m. today, and Kauffman said he expects a battle for the big-ticket items.
"There are going to be a lot of people leaving unhappy," Kauffman said.
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