PETALUMA - Two years after it was shuttered, the historic Petaluma Creamery is bustling again with life.
Crews are at work firing up the mammoth boilers, washing down the stainless steel vats and sweeping the concrete floors.
Dairyman Larry Peter, who bought the 1913 creamery three years ago, is preparing to reopen the plant and start turning out organic and conventional condensed and powdered milk.
Eventually Peter hopes to use part of the creamery to expand production of the 27 kinds of artisan cheese he now manufactures by hand at his Spring Hill Dairy in Two Rock.
The plain facade of the creamery, a complex of industrial buildings spread across a three-block section of downtown Petaluma, hides a shiny stainless steel processing plant controlled by computers.
Peter made bulk cheese at the creamery when he bought it in 2004, but shut down after several months because of a dispute over a milk supply agreement with the former owners, Dairy Farmers of America, based in Kansas City, Mo.
This time, capitalized with a loan package exceeding $10 million from Bank of the West, Peter believes he has a real chance to grow his business while creating a new market for the county's struggling dairy industry.
"It's costing dairies way too much to haul their milk four hours away, to get it processed in Turlock or Stockton or Modesto," Peter said. "The community needs this creamery if we're going to save dairies in this county."
Bank of the West, the nation's third-largest agricultural lender, is betting Peter will succeed.
"We analyzed the risk and we kicked the numbers pretty hard, and we're convinced this is a very, very good credit risk," said John Stafford, a spokesman for Bank of the West.