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Petaluma Creamery owes City Hall $604,000

  • 6/13/2008: E1: Petaluma Creamery owner Larry Peter, who bought the company in 2004, relaunched the plant's cheese-making operations this month. "I had to resurrect it," he said. "The whole thing is keeping the milk coming from Sonoma and Marin counties."

    PC: Larry Peter resurrected the historic Petaluma Creamery is cheese is being made there again. June 11, 2008. the Press Democrat / Jeff Kan Lee

One of Sonoma County's major milk processors is more than half a million dollars in arrears on its Petaluma water and sewer bill and the city is threatening to cut off service unless payment is received soon.

Petaluma Creamery owes $604,720, including $135,200 in wastewater discharge fines, according to the city.

In a strongly worded letter dated Sept. 9, City Manager John Brown told creamery owner Larry Peter that he has until Oct. 2 to pay July's $21,600 bill in full.

"If it is not," Brown wrote, "service to the creamery will be discontinued until such time as that payment, and any associated penalties and interest on that amount, are paid."

In a brief interview Thursday, Peter, who also owns the Spring Hill Jersey Cheese Company and dairy west of Petaluma, said Thursday he intends to pay the bills.

"I am going to get them paid," he said. "... I'm trying to get this thing worked out.

"If they do shut me down, there's going to be a hell of a lawsuit going on."

He said he has been treated unfairly by the city since his purchase in 2004 of the historic Western Avenue creamery, which was established by Sonoma and Marin county dairy farmers in 1913. The Dairy Farmers of America, a national cooperative, produced bulk cheese there until 2004.

Peter, a dairy man for 20 years, borrowed $10 million to refurbish the antiquated creamery. At the time, he said it cost $6 million annually to run the five-acre complex, which contains facilities to dry milk and produce cheese. The dried-milk production paid the bills, he said, but his plans included a greater commitment to premium cheese-making.

After opening the creamery, Peter briefly made bulk cheese but shut down following a dispute with the previous owners over milk supply. He reopened in 2007 with a focus on dried milk production.


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