The Daily Item, Sunbury, PA

News

December 12, 2008

Commissioners seek public opinion on Boscov's bailout

MIDDLEBURG — Snyder County commissioners are wary of Harrisburg’s promise to not use future block grant funds as collateral should the Boscov’s Department Store in Hummels Wharf default on a proposed $5 million bailout loan.

Despite a pitch Thursday from state and private consultants who said the county’s risk would be limited, commissioners delayed a decision and scheduled a public hearing on the matter for 2 p.m. Dec. 19.

“I want an assurance that Boscov’s will be not closed,” Commissioner Richard “Bud” Bickhart said.

“If we go through with this, and the store is closed, we’d have a lot of angry people in Snyder County,” Commissioner Malcolm Derk said.

If commissioners reject the loan agreement, the Susquehanna Valley Mall store — part of a chain that filed for bankruptcy this summer — would likely close.

“We’ll be disappointed,” said Ed Geiger, an official with the state Department of Community and Economic Development. “There are 132 people that have jobs there at the store. It would be a shame to see that go dark.”

The state guarantees that Snyder County’s Community Development Block Grant money will not be in jeopardy, said Walter Haglund and Karl Haglund, of Urban Design Ventures in Homestead, Allegheny County.

The financial model planned for Boscov’s loan would limit Snyder County’s risk, Geiger said. Yet commissioners worry that the loan’s requiring county CDBG money as collateral is a risk, albeit limited, they may not want to take.

“CDBG money will not be lost,” Geiger said.

The financial plan is based on the Department of Housing and Urban Development’s Section 108 program, and private capital from the Bank of New York is being used for the 20-year, fixed-rate 4 percent loan, Geiger said.

“It shows that we are meeting economic development purposes and job retention,” Geiger said. “HUD is ensuring that that public purpose has been met.

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