Council supports fund plan

July 25, 1995|By James M. Coram | James M. Coram,Sun Staff Writer

County Council members put strings on their endorsement last night of County Executive Charles I. Ecker's plan to borrow $900,000 from the state and lend it this fall to a local manufacturing company turned down by a commercial lender.

"This endorsement . . . does not in any way give council approval of the final disposition of this project," said Council Chairman Charles C. Feaga, a West Friendship Republican.

But it does allow Mr. Ecker to tell state officials the council supports his plan to seek a state loan under the Maryland Industrial Land Act and pass the loan along to Marble Source Unlimited.

Marble is an Annapolis Junction company specializing in the manufacture of natural stone products. It wants to use the loan money to expand and to increase its work force from 16 to 60 employees.

The fact that the company was refused a commercial loan is not a strike against the company, Richard W. Story, executive director of the county Economic Development Authority, told the council at a work session before last night's 3-1 vote endorsing the loan concept.

The state program was developed for companies "that have value, but for whatever reason were not supported by the commercial establishment," Mr. Story said.

Mr. Feaga was not convinced. It concerned him, he said, that the net worth of the company is estimated to be about $100,000 -- $800,000 less than the loan it hopes to receive.

Not to worry, Mr. Story said. The warehouse the company intends to build and the equipment in it will become assets the county could attach if the company defaults on the loan, he said.

But the warehouse and the equipment would be specialized, Mr. Feaga said, and may not be worth much to another buyer. "If you tell me something is worth $800,000, I don't lend you $900,000," he said. "I've got to see the final numbers. Right now the figures don't look good to me."

Mr. Story offered Mr. Feaga and the council confidential financial documents provided by Marble owner John J. Congedo and his wife, Linda, that Mr. Story believed council members would find comforting.

Mr. Feaga refused to look at them. "If this can't be public, we can stop right now," he said. He didn't want to be put in the position of having to tell constituents he had made a decision on the basis of information he could not share with them, Mr. Feaga said.

Council members worked instead with a public document that indicated Marble had a gross profit of $798,103.86 for the fiscal year ending March 31. The company predicted that its gross profit will grow to $1.5 million by next March and will reach $3 million by March 31, 1998.

Ultimately, Mr. Feaga voted to endorse the loan proposal because the council will revisit it in September after the county's 10-member Industrial Revenue Bond Committee -- half of whom are members of the Economic Development Authority -- reviews it.

Democrat Mary C. Lorsung of west Columbia said she felt "very comfortable approving the first step [in the loan process] while remaining free to make judgment on the next step. . . . There is a time when it comes to fishing or cutting bait. This is one of those times."

Republican Dennis Schrader of Kings Contrivance, who represents the district in which Marble is located, was enthusiastic about the loan proposal.

"I expect a fair amount of due diligence" from county officials considering the loan, he said, "but what this is about is mainline tools to grow manufacturing jobs. We are looking for a small amount of money for a $1 million [a year] company. . . . We've got to push to get more jobs."

Republican Darrel Drown, the only council member to vote against the proposal, said he agrees that government needs to help businesses, but does not think this is the right way to do it.

Mr. Drown would prefer that the county lower its tax rate for all companies "rather than given one company an advantage."

Mr. Congedo, Marble's owner, likened the experience of applying for the loan to "putting your family life on hold and your business in limbo, and taking the entire state of Maryland and the county through your underwear drawer. It would be impossible if we couldn't support the loan. We can carry the debt service. We can carry the loan."

Mr. Congedo said he has gone too far to give up now, even though it means losing an offer from a competing county. "It means that much for me to be here," he said. "It is worth the risk, because [if approved], it will allow me to stay in the county where I was raised."

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