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Washington County Commissioners take action on two loan agreements

April 16, 2013|By C.J. LOVELACE | cj.lovelace@herald-mail.com

The Washington County Board of Commissioners on Tuesday unanimously approved two measures to remedy situations involving two businesses that have defaulted on county-issued loans — canceling one and extending another.

By a 4-0 vote, the commissioners accepted a request made by an official with T. Rowe Price to cancel the remaining portion of a $739,206 loan issued to a subsidiary company, TRP Suburban Second Inc., by the county in August 2010.

Robert Mandley, project coordinator for the county, told the commissioners that the company contacted the Hagerstown-Washington County Economic Development Commission to ask to terminate the loan agreement due to a change in internal operations that would not allow the business to meet job requirements or capital investment goals.

As part of the agreement, which was to support construction of a data-recovery facility, T. Rowe Price was required to create 17 new jobs and make $60 million in capital investments by Dec. 31, 2012.

Mandley said a report to the EDC in February showed the company with only 13 new jobs and $36 million of investments.

David Petty, corporate tax director for T. Rowe Price, wrote in a memo to the county that the company will repay $287,715 to the county, which includes $246,402 in disbursements and $41,313 in accrued interest at 12 percent.

The county could have canceled the loan on its own since the company defaulted, officials said, which prompted the commissioners to call the end result “a gain” for the county overall.

“We gained a business and got our money back,” Commissioner Jeffrey A. Cline said.

In the other 4-0 motion, the commissioners agreed to modify its loan agreement with VTI of Maryland LLC, extending it for an additional year to allow the company to meet its job-creation requirement of 75 full-time employees.

“They’ve reached out to the EDC as well as the Maryland Department of Business and Economic Development, asking that we make an adjustment to their loan agreement,” Mandley told the commissioners.

In May 2011, the county approved a $112,500 loan to VTI — then a new company to the area — that carried a requirement to create 75 new jobs by Dec. 31, 2012.

By that date, VTI had 72 employees, three short of its requirement, Mandley told the commissioners.

The company has informed the county that it expects to meet or exceed that employment goal by Dec. 31, 2013, and the commissioners ultimately agreed to change the calculation date and extend the requirement of retaining those 75 jobs through the end of 2016.

Commissioner John F. Barr was present for the majority of Tuesday’s meetings, but was absent during both votes.

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