HOLLIDAYSBURG – Blair and other counties urged to support Boscov’s request to defer pending federal loan payment on August 1 – which may not pose any financial risk to the county based on state guarantees offered in 2009.
Since Boscov stores have been closed since mid-March due to the coronavirus pandemic, department store owners have informed counties of a proposed loan deferral request due to lost revenue.
Because the commissioners of Blair and those of five other counties – Cambria, Butler, Lebanon, Lackawanna and Schuylkill – agreed in 2009 to support the company’s lawsuit for a $ 35 million loan from the Ministry of Housing and Development. urban, these counties are now being asked if they will support the company’s loan deferral request.
Lawyer Nathan Karn told commissioners on Tuesday that Blair County’s share of the loan guarantee was calculated at $ 5.88 million based on the number of employees at Boscov’s store in Logan Township. This amount should now be less than what was expected as a 20 year loan.
By asking HUD to defer the August 1 payment, Boscov’s is asking “a little respite” so he doesn’t default on the loan, Karn said.
If the company defaults, the attorney said the risk to Blair County could be the loss of future community development block grant money, which HUD allocates annually and money used for. guarantee the loan.
However, in 2009, when plans for the Boscov loan were developing, heads of state and then Governor Ed Rendell ensured that the counties were not risking future CDBG money by backing Boscov’s loan.
As reported in the Mirror, state officials said they had money in a loan loss fund that could cover a default should it arise.
Based on these assurances, Commissioners Terry Tomassetti, Diane Meling and Donna Gority voted unanimously to support the proposed funding for Boscov’s, which opened a store in Blair County in 2006 as part of the Logan Shopping Complex. Town Center.
During Tuesday’s meeting, Commissioners Chairman Bruce Erb approved the company’s request for deferred payment in light of the current store closure conditions.
“Not (approving) that would create more problems for Boscov, which we don’t want to do”, said Erb. “I see very little problem in approving this.”
But he and fellow Commissioners Amy Webster and Laura Burke have agreed to wait until next week to vote on the request. Webster said she wanted the time to find out how other counties are reacting. Webster also said she wanted to know more about Blair County’s risk if another county refused to support the postponement request.
When Boscov’s applied for support in 2009 for its HUD loan, it approached counties where it had 39 stores and employed 5,500 people. While the state initially prepared loan documents reflecting support from seven counties, Snyder County commissioners voted against the loan, leaving six county commissioners in favor of the loan.
Mirror staff writer Kay Stephens is at 946-7456.