84 Lumber to receive $5 million loan
84 Lumber will receive a $5 million low-interest loan from Washington County, Pa., as part of a Housing and Urban Development (HUD) program aimed at maintaining and creating jobs, according to an article in the Pittsburgh Tribune-Review.
The loan will be backed by $10 million of real estate owned by 84 Lumber, including the company's headquarters and office buildings in Eighty Four, Pa., as well as all of the chain's retail stores in Washington County. The loan was approved by the county’s commissioners.
"They've been a stalwart of the business community for over 50 years,” commissioner Bracken Burns said. “For us to walk away from them in their moment of need would have been unworthy."
The federal loan will become part of the pro dealer’s $55 million refinancing plan, which also includes a $15 million HUD loan approved last August by the Fayette County commissioners. As with the Washington County loan, 84 used real estate holdings as collateral.
Both loans have better terms than private sector financing. The Fayette County loan, for example, is a 17-year loan that would allow the company to pay interest only on the first two years for the $15 million.
The company is in the middle of refinancing $45 million it borrowed in 2008. The two HUD loans, together with $20 million in financing from Wells Fargo and $5 million from company owner Maggie Hardy Magerko, should be enough to pay off the loan, company spokesman Jeff Nobers told Home Channel News in August. The current balance is $55 million, but the company expects to reduce that balance to $45 million with cash from real estate sales over the next few weeks.
“We hope to have all the [refinancing] completed by November,” Nobers said.
84 Lumber reported $1.4 billion in overall sales for 2009.