Commissioners support Boscov’s loan deferment
HOLLIDAYSBURG — Blair County commissioners voted unanimously Tuesday to support Boscov’s request for a deferment on a pending Aug. 1 federal loan payment.
Commissioner Amy Webster said Tuesday that after the request surfaced last week, she reviewed the 2009 loan documents and learned, via the state, that other affected counties are supporting the retailer’s request.
“When I first started reviewing this, I was asking a lot of questions,” Webster said. “But I was satisfied after I reviewed the documents.”
Because Boscov’s stores have been closed since mid-March due to the coronavirus pandemic, the department store owner recently advised counties of a pending loan deferment request in connection with its August payment.
Jim Boscov, CEO of the Reading-based Boscov’s, told pennlive.com last week that the company has the opportunity to defer the $2.5 million payment until the end of the loan, as offered by the U.S. Department of Housing and Urban Development, which granted the loan.
Boscov described that option as extremely helpful during a time that’s been tough on retailers.
The company closed its stores in March based on orders by Gov. Tom Wolf, applicable to non-life-sustaining businesses. The move was an effort to limit the spread of the coronavirus. On Friday when coronavirus-related restrictions are eased in Blair County, the Boscov’s store in Logan Town Centre will reopen.
None of the current commissioners — Webster, Bruce Erb and Laura Burke — were in office in 2009 when Blair County was asked to support the Boscov’s loan request before HUD. At that time, the loan was described as part of a financial package the family arranged to bring its stores out of bankruptcy.
Because HUD recognized the loan as a way to support local economies and save jobs, it required Boscov’s to secure support from counties where stores were located. Blair County commissioners at that time — Terry Tomassetti, Diane Meling and Donna Gority — plus commissioners in Cambria, Butler, Lebanon, Lackawanna and Schuylkill counties, offered their support.
While HUD required counties to pledge future Community Development Block Grant dollars if Boscov’s defaulted on the loan, state leaders in 2009 assured county officials that the state had money to cover a default and that no county CDBG dollars would be lost.
Webster said her review of the loan document indicated that if Boscov’s defaulted, HUD would approach the state for recovery and that future CDBG allocations would be at risk.
“But Boscov’s has been making regular payments on this loan for about 10 years … and they’re still going to make an interest payment in August even though they’re going to defer on the principal,” Webster said. “I think there’s been an awful lot of good faith being shown here.”
Erb, who spoke in favor of supporting Boscov’s request, pointed out Tuesday that the county’s liability associated with the loan repayment was created in the past.
The option to let Boscov’s defer its August payment “throws a lifeline to Boscov’s” during what’s been a difficult time for local businesses, Erb said.
Mirror Staff Writer Kay Stephens is at 946-7456.