PORT ANGELES — Peninsula Plywood furloughed 50 workers Tuesday, the same day the City Council agreed to seek a large grant to keep the mill open.

PenPly President Josh Renshaw said Wednesday that the employees, who make up one shift, were sent home because the mill did not have enough veneer.

He said the workers should be back within a few days and declined to comment further.

The mill on Marine Drive in Port Angeles employs 115 people, said the mill’s human resources manager, Mike Warnock.

The Port Angeles City Council agreed to apply for a $500,000 state Department of Commerce grant on behalf of the company to help cover operating costs, including the purchase materials and other supplies.

Commerce had already approved the grant, which must be awarded to a public entity, pending the council’s decision, said Lynn Longan, the agency’s economic development manager for its Olympic region.

Longan said Commerce heard PenPly was at risk of closing and found U.S. Housing and Urban Development funds that could be used to help keep it afloat.

The reason: to maintain jobs that can help sustain the local economy.

“I think we realize the impact of those jobs to the community up there,” she said.

“It’s a big impact.”

Calling it “unusual,” Longan said she could not recall another time that the agency allocated funds to help a company pay its bills and meet orders.

She said she has worked for the agency for 19 years.

Longan said she didn’t know when the funds would be available for PenPly but added that the agency is expediting the process.

PenPly owes the city $315,331 for utilities and $70,633 to the Port of Port Angeles for rent.

It reopened the shuttered mill, previously owned by Klukwan Inc., in March 2010.

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Reporter Tom Callis can be reached at 360-417-3532 or at tom.callis@peninsuladailynews.com.