Montgomery County’s economic development loan fund will be paid back more than $135,000 under an agreement worked out among creditors and Universal Custom Millwork, which went out of business late last year.
A committee of county supervisors is scheduled to meet this evening to authorize spending up to $2,000 to cover legal fees spent by NBT Bank, which foreclosed on the company’s facility in the Edson Street Industrial Park in Amsterdam.
In a semirelated discussion, the county board’s Economic Development/Planning Committee will also consider a resolution that would speed up action on the part of the county government when borrowers stop paying back borrowed county money.
Universal Custom Millwork received a $240,000 working capital loan from the county Industrial Development Agency in April 2007. It repaid a total of $104,133.54 before shutting down in December, leaving a balance of $135,866.46.
County economic development and planning department director Ken Rose on Monday said there was a collateral agreement between the county IDA, the New York Business Development Corp. and NBT Bank, and after the facility shut down NBT Bank pursued foreclosure.
The county will recoup the entire balance of the loan from the bank but the bank is seeking up to $2,000 to pay for its legal expenses rendered by Hinman, Howard & Kattell, LLP, according a draft resolution to be reviewed this evening.
The agreement with the creditors eliminates the need for more legal action and puts the money back into the fund to help create jobs, Rose said.
“A lot of times that’s the outcome you want to have,” he said.
In an effort to speed up reaction time in the event a loan goes into default, the committee is reviewing a measure that would shorten the current process by which legal action is taken to recoup loan funds.
Since 2009, Montgomery County Attorney Douglas E. Landon has been tasked with that responsibility, but the committee tonight will consider rescinding that agreement altogether in favor of a new process.
As it stands now, the county Industrial Development Agency has to pass a resolution to declare a business in default on its loan, then send that resolution to a committee of the county’s Board of Supervisors. Following committee review, approval to take action then waits on the full Board of Supervisors. The entire process can take up to a month and a half, Rose said.
If approved, the measure will allow the county board chairman to authorize hiring a lawyer to enforce defaulted loans once the IDA declares the loan to be in default.
The county IDA made such a determination during its June meeting regarding loan money owed by Crystal Ristorante in Amsterdam.
The business, which is facing an unrelated foreclosure action, owed approximately $118,000 on a $150,000 loan by the end of 2010 and last made a payment in March.
Categories: Schenectady County