Boscov's loan vote delayed
Wanting to be sure Butler County's future grant funding isn't jeopardized, the county commissioners on Monday tabled a vote on a federal loan application for Boscov's department store.
Under a plan worked out with the state, Boscov's would borrow $35 million to prevent the closure of stores in six counties, including Butler.
Although Gov. Ed Rendell guaranteed the repayment of the loan if Boscov's defaults, the state isn't permitted to process the U.S. Department of Housing and Urban Development loan.
"In order to access these funds, the state cannot apply for Section 108 funding alone," said state consultant Walt Haglund of Urban Design Ventures in Pittsburgh told the commissioners.
So the six counties, including Blair, Cambria, Lackawanna, Lebanon and Schuylkill, must approve Boscov's application.
However, county officials want to review the paperwork before approvals are granted.
"Technically, we are pledging our CDBG (Community Development Block Grant) funds for the next 20 years," said county solicitor Julie Graham.
The commissioners also tabled a vote on joining a consortium comprised of the six counties.
Haglund assured the commissioners there would not be adverse ramifications from joining the consortium or approving the loan application.
"It's a tool for economic development," he said.
The $35 million would go to the Boscov family so it can buy the bankrupt department store chain.
Boscov's, based in Reading, has 25 stores and 5,000 employees.
As part of the overall plan, another $6 million in federal funding will be processed through Scranton and Wilkes-Barre.
The Boscov family is putting in $53 million of its own equity into the plan to keep the chain operating.
