Letterkenny loses tenant

June 17, 1999|By RICHARD F. BELISLE, Waynesboro

CHAMBERSBURG, Pa. - The Letterkenny Industrial Development Authority's first tenant closed its doors earlier this week at a cost of 140 jobs, L. Michael Ross, Franklin County's industrial development chief, said Wednesday.

Ross said the company received more than $500,000 in state and local loans and grants as an incentive to move to the Cumberland Valley Business Park at Letterkenny Army Depot two years ago. He said he "is not optimistic" that money can be recovered.

Most Excelsior employees were garment workers who lost jobs when the J. Schoeneman Co. plant in Chambersburg closed in 1997, Ross said.

Excelsior Manufacturing was created in 1997 by Haas Tailoring Co. to make men's pants. Haas signed a lease with the Letterkenny Industrial Development Authority, or LIDA, for a 90,000-square-foot warehouse building at the business park.


The company came to Franklin County to take advantage of the experienced J. Schoeneman workers, said LIDA spokeswoman Deb Garvin.

Haas Tailoring President John Haas could not be reached for comment Wednesday.

Ross said the closing and the job loss will be permanent.

"Excelsior has fallen into a financial situation that is unrecoverable," he said. "The project was doomed from the outset. It never came out of the chute as it was projected to do. The company has struggled from the beginning. The orders never came."

Ross said there is a ray of hope that at least some of the Excelsior jobs can be saved.

A Baltimore-based garment manufacturer that has a plant in Franklin County is negotiating to buy out Haas Tailoring, a move that could result in the company hiring 50 or more Excelsior workers, Ross said. He would not identify the company.

"We should know in 10 days or less if it goes through," Ross said.

Excelsior workers staged a short sit-down strike earlier this month over the threatened loss of insurance and other benefits, Ross said.

Among loans and grants the company received as incentives to do business in Franklin County was a $200,000 loan from the Franklin County Area Development Corp., the agency that Ross heads.

He said some of the loan has been paid down, but he didn't know the exact figure.

"We're not optimistic that we will be able to recover the funds," Ross said. "We knew it was a risky loan from the beginning, but we felt it was a loan that we should make. It's our job to make such decisions and it did help the area economy by keeping 140 people working for two years."

Excelsior also received a $200,000 loan from the Letterkenny Opportunity Fund to buy equipment and machinery and to do some renovations on the warehouse building.

Garvin said Wednesday that Excelsior has not removed any manufacturing equipment from the plant.

The company also received about $100,000 in state funds to train workers for the new plant, money that will not be repaid, Ross said.

"Money spent to train people to work is never lost," Ross said. "It's our challenge now to make a deal with the new (Baltimore) company and bring some stability to that work force."

Staff Writer Don Aines contributed to this story.

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