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Sale of Sheraton keeps mill running in Burns Lake

Next public meeting of CMSL board of directors not yet announced.

In a statement provided on behalf of the Burns Lake Community Forest Ltd. (Comfor), Quinten Beach, Comfor Management Services Ltd. (CMSL) president, presented a summary of the decision process behind the recent sale of Sheraton Holdings Ltd. to Tahtsa Timber Ltd. “The board had been meeting monthly,” said Beach, “and more frequently over the summer, with quorum of at least four directors.” Beach, also a Village of Burns Lake councillor, is the representative of the Village of Burns Lake at the board meetings. The remainder of the six member board is made up of Rosanne Murray, Wesley Sam, Reg Ogen, Hereditary Chief Jeff Brown and Susan Schienbein. Chief Albert Gerow, Chief Karen Ogen and David Dewitt were available as alternative directors.

“The sale of Sheraton was not advertised,” said Beach. “The board was approached by the purchaser [Tahtsa Timber Ltd.] with an offer. After due consideration and negotiation, the board determined that it was in the best interests of Comfor and the community to proceed with the sale.”

According to the CMSL Comfor policy manual, the sale of Sheraton Holdings Ltd. would have been exempt from the Disposition of Redundant Assets policy which deals with the sale of surplus assets. As real property (real estate and its improvements), the mill and its chattel would have been exempt from the policy that requires redundant assets to be offered to the public for sale.

In the Sept. 13, 2012 press release announcing the sale of Sheraton Holdings, new WCB regulations regarding dust mitigation played a key role in CSML’s final decision to sell the mill.  The cost of upgrades to meet new regulations and other factors influenced the board’s decision, as described in this extended quote from Beach’s statement:

“Due to the changing regulatory framework, challenging markets and the pending retirement of the manager of the sawmill, the board was closely looking at shutting down the operation again. The offer [from Tahtsa] allowed Comfor to divest itself of the assets to a competent local business that would maintain the jobs and manage the operation according to a new business model.”

The statement further explains that the decision to sell Sheraton fits in with a broader restructuring of the operations of the community forest, and that the sale of the mill as a ‘going concern’ was in the best interest of the community. Beach elaborated that timing was important as the purchaser was considering building a mill in another community if Sheraton wasn’t available.

Klaus Posselt confirmed that Tahtsa Timber was considering building a facility in Houston if the sale of Sheraton Holdings had not gone through. Posselt elaborated that the sale of Sheraton Holdings to Tahtsa Timber means more fibre volume (sawlog and biomass) will be brought into the Burns Lake operation.

Details of when the minutes of the meetings would be available at CMSL offices or when the next public meeting can be expected were not available at press time. The CMSL board of directors has not held a public meeting since May 2012.