Welded Tube Gets Extension on ECIDA Loan
Buffalo News reported that the Erie County Industrial Development Agency, in an effort to help a company hammered by the pandemic, is giving Welded
Buffalo News reported that the Erie County Industrial Development Agency, in an effort to help a company hammered by the pandemic, is giving Welded Tube USA up to two more years to increase jobs or repay a forgivable loan after the company's Lackawanna operation failed to meet its job promises last year. The ECIDA agreed to grant an extension to the manufacturer on a USD 1 million loan and grant that dates back to 2013. The original agreement included a USD 500,000 grant that would not be returned, but the rest was structured as a loan that could be forgiven based on employment, or would have to be repaid over five years from 2019-2023.
Under the original terms, ECIDA would write off USD 100,000 of that loan for each of the five years, if Welded Tube hired and maintained at least 75 full-time employees by December 2018 and kept that level. If the company fell short, the entire loan amount and interest would be due in monthly instalments by the end of 2024.
The company, which set up shop on the former Bethlehem Steel site in Lackawanna, kept its word until 2020, and the loan balance was down to USD 400,000. But the pandemic hurt the oil and gas market that it relies upon and hammered the company's sales, which fell 73% last year. The plant was idled for 20 weeks, shifts were cut from three per day to one, and employment dropped to 48, well short of the requirement.
Officials now expect conditions to improve. So at the company's request, ECIDA extended the loan term and deferred payment by a year, and also authorized the agency to extend it another year if necessary.