Hopes are running high that the creation of a wood pellet manufacturing plant in town will help give this community of 4,600 people an economic shot in the arm.

The site of the former Timco Lumber Company, once the largest employer in Barnstead and one of the largest lumber companies in the Northeast, is being transformed into a wood pellet manufacturing company that will be a producer and supplier of wood pellets for private households and commercial businesses.

Lakes Region Pellets, located on Depot Street in Barnstead, plans to start making pellets as early as next week. Vice-President and Chief Operating Officer Gregory True sees the light at the end of the tunnel and believes that this is one of the steps in boosting the local economy.

"What we're trying to do, essentially, is to figure out Obama's stimulus plan," True said. "Those stimulus dollars are there somewhere; we just need to find out where."

Timco once employed more than 130 direct employees who were all laid off in 2003 when the business went bankrupt, leaving the property like a ghost town for the past six years.

True said he has hired 20 employees since operations began in April in an effort to start the first phase of production. Once the pellet company is in full operation, there could be 30 to 35 jobs created directly, which could produce up to 10 tons of product per hour. Another 100 jobs will be created indirectly by outside loggers, truckers and other contactors.

True is certain that the pellet company will grow to its full potential.

"It's not a matter if," True said. "It's when we get it done because it will get there."

On site there is a five-megawatt generator that True plans to operate, which will create an additional 20 jobs directly with 100 jobs created indirectly from outside lumber services.

Down the road, True said the opportunities on the property are endless, suggesting that there could be symbiotic relationships that could eliminate waste and at the same time keep a company in business. If a fish farm were to be built on the property, the carbon released from the generator could be used to grow algae, which could be used to feed the fish.

"Unemployment is high right now," Selectman Gordon Preston said. "We're looking for any federal grants to get this place up and running as soon as possible"

Preston said the town has been in contact with the United States Department of Agriculture in Washington, D.C. He said he is trying to find out what parameters Lakes Region Pellet needs to meet in order to become a "designated energy facility."

Preston said he should hear back in the next two weeks about what exactly is needed to qualify the site as one of these facilities.

"Obama put money aside and told the USDA that he wants money going into energy," Preston said.

According to Preston, if Lakes Region Pellets becomes a "designated energy facility" it could become a catalyst for more jobs in the logging industry. The pellet company currently is paying $20 per ton for logs.

If it can meet certain parameters to be a designated energy facility, those loggers would be matched $20 per ton by the government for providing for a designated facility.

Preston said he recently saw a logger come into town hall to register his equipment for the first time in two years because he had heard that the wood pellet company was in service.

"Within a 25-mile radius there could be $4 million brought in over the course of the year to the area," Preston said. "This is like a giant jigsaw, but all the pieces are around us."

Thinking "green" is something that the Obama administration has encouraged. Wood pellets are made from completely organic matter and wood pellet stoves are becoming popular. As technology advances, the cost of wood pellet heating systems and other alternative energy sources are expected to decrease.

"This is going to be everything for us," said Elaine Swinford, R-Belknap District 5. "It will bring in work for our local residents. It's going to be bringing in locals from the area to work here."

Swinford said that, if the company can get up and running, it wouldn't just provide jobs, it would reduce the town's "carbon footprint". The town has the potential to hook up to the steam line from the generator which could provide the municipal buildings with heat and eliminate their need for heating fuel.

"We're a bedroom community that is ready to get on the bandwagon," Swinford said. "We're on the bandwagon; we just need the instruments."

In April, the N.H. Community Development Finance Authority approved the request from the town of Barnstead for a $500,000 Community Development Block Grant that has been used to expand the business. The money is channeled through the Belknap County Economic Development Council, which loaned the money to Lakes Region Pellets, LLC, so it could purchase equipment and increase job creation.

The cost for the upgrade to make the company fully operational is estimated to be $30 million, some of which the town thinks it can obtain through stimulus funds.

"The town, county and state are all working together," True said. "We're trying to find a way to get this up and running."

RAY MONGEAU/CITIZEN PHOTO GREGORY TRUE, owner and chief operations officer of Lake Region Pellet Co., shows the wood pellet and bedding material that will be processed. * Order a print of this photo

RAY MONGEAU/CITIZEN PHOTO STATE REP. Elaine Swinford talks to a reporter about the possibilities and employment the Lakes Region Pellet Co. site has during an interview Monday.