Plan to Save 5,000 Retail Jobs Approved by HUD
The U.S. Department of Housing and Urban Development (HUD) has approved a plan initiated by Governor Edward G. Rendell to help save 24 Boscov's department stores and the jobs of its 5,000 employees in the state.
“This is great news for Pennsylvania, its people, communities, and one of our most respected businesses,” says Governor Rendell of HUD’s decision to approve a $43.7 million loan to the retailer. “Boscov's has been a cornerstone of many communities in Pennsylvania since 1918. Today, with 24 locations throughout the state and more than 5,000 employees, they remain a significant part our economy,” he adds.
In November, 2008, Governor Rendell announced that the commonwealth would apply for a HUD Section 108 loan guarantee for $35 million to help the company’s founder, Al Boscov, and his partners acquire the company and help it emerge from bankruptcy proceedings. The buyers also applied $60 million in private equity and $200 million in conventional bank loans towards the purchase. The HUD loan completed the financial package necessary for the buyers to purchase the company.
Six counties approved the loan guarantee, including Butler, Blair, Cambria, Lackawanna, Lebanon, and Schuylkill, although the state has committed to covering the loan should Boscov’s default. Boscov’s has committed real estate and assets valued at more than two times the amount being guaranteed by state and local loans, so no county grant money would be at risk.
The loan guarantees from the six counties represent $35 million of the $43.7 million approved by HUD; the remaining balance is from similar guarantees from the cities of Scranton and Wilkes-Barre, and Vineland, N.J.