About a year after the most recent announcement of a Montana sawmill closure, state lawmakers passed a bill creating a low-interest loan program for companies reopening a mill in an effort to boost Montana’s economy and forest health.
Missoula County’s two largest wood products facilities — Pyramid Mountain Lumber in Seeley Lake and Roseburg Forest Products in Missoula — announced in March 2024 plans to close, affecting about 250 employees.
The Missoula Economic Partnership has worked to find a company to take over the former Pyramid Mountain Lumber sawmill for more than a year, said Grant Kier, the partnership’s president and CEO. The economic development organization supported House Bill 876 as a “piece of the puzzle, not the whole solution,” Kier told Montana Free Press.
“It’s important to recognize this money is part of a whole suite of tools we’ll try to bring to the table to make financing more favorable and appealing to someone if they’re willing to invest in a sawmill in western Montana,” he said. “At the end of the day, it’s probably enough to send a really strong signal to somebody that the state government is really supportive of the industry and wants to see investments.”
HB 876, also known as the Sawmill Revitalization Act, sets aside $6 million for loans administered by the state Board of Investments. Any money not spent by June 30, 2027, will be transferred back to the capital development long-range building account. The bill awaits Gov. Greg Gianforte’s signature.
Rep. John Fitzpatrick, R-Anaconda, said he and Rep. Connie Keogh, D-Missoula, proposed the bill to help “reactivate” one or more sawmills that closed in recent years.
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“When I came back to Montana from graduate school in the early 1970s, we had over 50 operating sawmills in Montana,” Fitzpatrick said during a Senate committee meeting on April 15. “Now we’re down to about five. In the past three years, sawmills at St. Regis and Seeley Lake have closed. And that’s not a loss just to the local economy; it’s a very detrimental effect on our forests because we have fewer places in which to process logs.”
Along with the Missoula Economic Partnership, representatives from the Missoula Chamber of Commerce, Trout Unlimited and the forestry industry spoke in favor of the bill, highlighting the need for a mill in western Montana to help with forest management.
“We have this big void in the state of Montana where we need a big pine mill, and the mill in Seeley helped fill that void,” said Jason Todhunter with the Montana Logging Association. “We desperately need a market for ponderosa pine, and it’s our hope this bill will help encourage a facility like that to relocate back in Montana to give us a place to take pine.”
Ponderosa pine is common in Montana forests but less sought after by the wood products industry.
Christopher Anderson, vice president of Sun Mountain Lumber, said while more capacity is needed to help manage forests, the company opposed the bill because it excludes existing sawmills operating in a tough industry. The company has received low-interest loans from the Montana Department of Commerce’s Wood Products Revolving Loan Program, but the program only offers a limited amount of money every two years, Anderson said.
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During the committee meeting and on the Senate floor, some lawmakers questioned the decision to spend $6 million in taxpayer dollars for a loan that would only be a drop in the bucket for the full cost to reopen a mill.
“We’re spending taxpayer dollars to do what loggers did in the 90s,” said Sen. Matt Regier, R-Kalispell, during debate on the bill in late April. “This is completely backwards. I support the timber industry, but to do that, we need to do that right, and that is get the lawsuits out, let us manage our forests and get back to producing tax income.”
Sen. Mike Cuffe, R-Eureka, said the loan program is not a handout but rather how one representative decided to help the communities affected by mill closures.
Fitzpatrick told the Senate committee he never intended the loan to cover the full cost of a new mill, but it could be an important part of a “capital stack.”
“If we have a new developer who thinks that they’ve got the capital to buy the facility, to get the capital together to start the thing, and we can assist, I think it’s a good step,” he said.
A capital stack refers to the money assembled from different sources to make up the tens of millions of dollars needed to open a new, modern sawmill, Kier said.
“Someone would need to come into the market with enough cash to invest heavily, but a lot of times they would bring money from other sources like loans, grants, other vehicles and instruments to make that overall investment,” he said. “What we’re trying to do is compete with other states in the country that provide ways to cobble together money.”
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In response to concerns about a new mill hampering existing operations, Kier said companies interested in moving to Seeley Lake do not want to face challenges from other mills or their efforts to sell byproducts like sawdust.
Roseburg’s Missoula particleboard plant was a major user of those residuals. The Oregon-based company was working with the city of Missoula to annex the 235-acre property and explore redevelopment, but the process was paused in late January over concerns about legislation that would affect tax increment financing.
While Kier couldn’t give details about potential buyers of the Seeley Lake site, he said the passage of HB 876 is a “starting gun” for the Missoula Economic Partnership to recruit interested companies.
Kier said when the partnership communicates with companies, it tries to be honest about Montana’s housing challenges, which contributed to the Seeley Lake mill’s closure.
Pyramid struggled to keep up with rising expenses and hire enough workers to increase production, in large part because of the lack of housing in the area, Todd Johnson, the mill’s president and general manager, said last year. Seeley Lake does not have a public sewer system, and much of the community is under a special management district with septic restrictions to prevent groundwater contamination, making it difficult to build homes for millworkers and other employees.
Even without ongoing work in the community to address infrastructure issues, they may be less of a barrier for a modern sawmill, which can process the same amount as an older mill with fewer workers, Kier said.
The Missoula Economic Partnership is optimistic it has interest from “credible partners” in redeveloping the Seeley Lake site, Kier said.
“I hope over the next several months, and hopefully by the end of year, we’ll have a sense if there’s a viable partner to come in and transform one of our older sites that’s no longer a mill into something that’s a functioning mill for the future,” he said.
This story was originally published by Montana Free Press at montanafreepress.org.
