The Daily Item, Sunbury, PA

News

December 20, 2008

Boscov owner pleads case for county financial support

Chain's chief vows store will repay loan

MIDDLEBURG -- Choking back his emotions at a public hearing on a state request for Snyder County to guarantee a $5 million loan to Boscov's, company owner Albert Boscov on Friday vowed his commitment to keep the Hummels Wharf store open.

"The reason I got involved at this age is because we have 9,000 employees and I have pride," the 78-year-old retailer said. "There's no way we're not going to pay the money back."

Boscov attended the hearing at the Snyder County Courthouse along with about 20 people, mostly Boscov's employees, to discuss the pitch for the county commissioners to put up $5 million of Community Development Block Grant money as collateral to help the business emerge from bankruptcy.

The state loan would be for 20 years at a fixed 4-percent interest rate.

The Boscov's chain, which consists of 39 stores in Pennsylvania, New Jersey, New York, Maryland and Delaware, filed for bankruptcy last summer. Boscov had retired as chairman three years ago, but when the family department store chain began experiencing problems, he stepped in and bought it back a few weeks ago under a newly formed company, Boscov's Newco.

The Hummels Wharf store, one of 25 Boscov's outlets in Pennsylvania, employs 200, has an annual payroll of $3.5 million and pays $171,000 a year in real estate taxes.

In order to secure $105 million for the project, Boscov is seeking $46 million in loans from the state and several cities. Snyder County is among seven Pennsylvania counties being asked to use as collateral $5 million from CDBG funds under a federal loan program that allows businesses to borrow up to $7 million if they are able to demonstrate a public benefit, financial need and that at least 51 percent of the employees will be from low- to mid-level income families.

Snyder County Commissioner Malcolm Derk said the loan proposal has prompted a flurry of calls from residents both for and against the idea.

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