Pinning his hopes on dubious process

Owner loses business amid apparent conflicts at development agency

Arundel loan turns sour

November 18, 1999|By Laura Sullivan | Laura Sullivan,SUN STAFF

As workers installed the shiny wooden lanes and unloaded crates of pins, Robert E. Thompson stared at his financial ledger in growing horror. He realized he would be broke before his new Glen Burnie bowling alley had even opened for business.

Already $600,000 in debt, his applications for further financing rejected by several banks, Thompson turned to Anne Arundel County's Economic Development Corp. But even this county-financed agency -- set up to promote new business in the county -- turned him down, calling his venture too risky.

Yet when Thompson returned to the agency a few months later in 1995, with even more debt and his bowling alley plans unchanged, his application for a $190,000 loan sailed through. The only difference was that this time he had help.

Thompson had turned to M. Willson Offutt IV, a well-connected Annapolis attorney, who also worked for the Anne Arundel economic development agency at the time.

"I was worse off [financially] the second time I went in, but Offutt said don't worry about it, he'd have it taken care of," Thompson recalls. "He knew everyone over there."

Details of the 1995 bowling alley loan, disclosed in interviews and records, demonstrate how people with connections have for years enjoyed unusual access to the agency's multimillion-dollar loan fund.

Of the 57 loans the corporation has issued since separating from county control in 1993 to become a county-funded, nonprofit agency, at least a half-dozen went to companies to which board members had financial ties. And while the apparent conflicts aren't illegal, they rekindle questions about inside dealing that have dogged the county's business development arm for months.

Thompson's story, in particular, offers a look at the high stakes and risks that face outsiders who step into Anne Arundel County's tight-knit community of small business development.

Offutt smoothed the way for Thompson's loan application with letters, phone calls and personal appearances at agency meetings when the bowling alley loan was discussed. But Offutt's interest in helping Thompson secure his loan from the county agency went beyond merely representing him.

Two months earlier, Offutt and a partner had become Thompson's financial backers, having lent him nearly a half-million dollars for the bowling alley venture -- something Offutt didn't reveal to the agency until a curious loan committee member asked. Without the loan, Offutt stood to lose his investment while the bowling alley crumbled under debt.

Instead, the agency's loan helped Thomson make his monthly payments to Offutt. And, when scarcely a year later Thompson finally did go broke, Offutt and a business partner took over the bowling alley -- Glen Burnie Bowl in the 6300 block of Ritchie Highway -- and still run it to this day.

While Offutt denies any impropriety in the deal, he agrees that this was "a tough experience for Mr. Thompson." He says he represented the bowling alley, not Thompson, even though Thompson was the sole owner at the time of the loan.

Offutt says the business' troubles were complicated by a truck accident that left Thompson unable to work for several months.

"I was an invester in a business that borrowed money from the development corporation, that is true," Offutt says. "The goal was to create a business and create jobs, and that's what transpired. It's a success story.

"If I had not stepped forward to rejuvenate this business," by helping to obtain the agency loan, he says, "it would have failed and I would have lost my investment and the development corporation would have lost theirs because Thompson couldn't deliver."

A seeming opportunity

Thompson's foray into the bowling business began almost five years ago, when his favorite Glen Burnie alley, Greenway Bowling Center, burned to the ground in an electrical fire.

He was unemployed and 40 years old. But he was sitting on a $600,000 jury award from a personal injury lawsuit against Baltimore Gas and Electric Co., after a fall on the job years earlier.

Thompson saw opportunity -- 1,500 bowlers with no place to go.

"I had always thought about owning some type of business," he recalls. "I knew a bowling alley could draw the community together, and I thought it might make some money."

Business proposal in hand, he leased space in a low-slung strip mall on Ritchie Highway, and began transforming it into Glen Burnie Bowl, envisioning a premier duckpin bowling center with computerized scoring.

But within months, delays in construction and shipping put the project behind schedule. The bowling alley was three months from opening, the lanes only partially complete, and Thompson was running out of cash.

Spending taxpayer dollars on a bowling alley might seem unusual, but local economic development agencies frequently aid such ventures to create jobs and bolster struggling communities.

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