HUD Approves Governor Rendell's Plan for Boscov's Loan to Save 5,000 PA Jobs

HARRISBURG, Pa., Aug. 6 /PRNewswire-USNewswire/ -- Governor Edward G. Rendell welcomed today's news that the U.S. Department of Housing and Urban Development has approved a plan he initiated in November 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," said 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.

"To their credit, Al Boscov and his associates have worked diligently to help preserve that presence and keep their workers employed. They've put tens of millions of dollars of their own money on the line because they believe in this company and its employees. Pennsylvania does, too, and that's why we worked so hard to provide them with the help they needed to emerge from bankruptcy."

In November, Governor Rendell announced that the commonwealth would apply for a HUD Section 108 loan guarantee for $35 million to help 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.

"We are extremely grateful to Governor Rendell, who acted as a catalyst to make this loan possible and Boscov's survival a reality," said Boscov. "This loan completed the financial package necessary for us to purchase the company and save over 5,000 jobs in Pennsylvania. We appreciate that it's the loyalty of our customers and our coworkers that's made it possible for us to exceed our projections in a very tough economic environment, but none of this would have been possible without Governor Rendell's efforts. We'll continue to work hard to bring the best possible values to our customers."

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.

The Rendell administration is committed to creating a first-rate public education system, protecting our most vulnerable citizens and continuing economic investment to support our communities and businesses. To find out more about Governor Rendell's initiatives and to sign up for his newsletter, visit www.governor.state.pa.us.

    CONTACT:Steve Weitzman (DCED)
    717-783-1132

    Michael Smith
    717-783-1116

SOURCE Pennsylvania Office of the Governor

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http://www.governor.state.pa.us