USDA Rural Development has approved a $25 million loan guarantee backing a senior construction loan from Native American Bank for the Blue Mountain Mill, a regenerative flour mill under development at Coyote Business Park on the Confederated Tribes of the Umatilla Indian Reservation in northeastern Oregon.
The guarantee, announced Dec. 16, supports Native American Bank’s $25 million loan to Cairnspring Mills for construction and soft costs and is expected to close next week, according to a spokesperson for the bank. The financing is part of a broader capital stack supporting development of the specialty grain mill by Burlington, Wash.-based Cairnspring Mills on land leased from the CTUIR, which is also an equity investor.
With the USDA guarantee in place, the bank’s loan serves as the senior debt in a reported $65 million financing structure assembled to build the mill.
Native American Bank led the process to secure the USDA Business and Industry loan guarantee, the spokesperson said, noting that the transaction required coordination among multiple lenders and public and private partners. The deal also involved added complexity because CTUIR is the land lessor for the project site and because the financing incorporates New Markets Tax Credits.
In addition to the bank’s senior loan, the capital stack includes $35.7 million in New Markets Tax Credit financing provided by EcoTrust, CEI Capital Management and Dudley Ventures, as well as $9 million in subordinated bridge debt from a group of Native community development financial institutions led by Mission Driven Finance.
The USDA-backed loan builds on earlier investments reported by Tribal Business News, including the tribe’s $5 million equity investment in Cairnspring Mills and a long-term land lease at Coyote Business Park.
The Blue Mountain Mill is intended to restore regional milling capacity lost after a nearby Pendleton-area mill was destroyed by fire. The facility will process wheat sourced from farms across Umatilla County.
When operational, the mill is expected to supply flour to customers across North America, retaining more of the region’s winter wheat locally rather than exporting it primarily to Pacific Rim markets, while supporting tribal economic development and food system goals.
About The Author
Brian Edwards is associate publisher and associate editor of Tribal Business News and Native News Online. He is a longtime publisher, editor, business reporter and serial entrepreneur.
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