Montgomery County IDA OKs forgiving Power Pallet loan
MONTGOMERY COUNTY The Montgomery County Industrial Development Agency is recommending Power Pallet Recycling Center be forgiven a $309,000 loan balance — provided it creates 40 jobs and maintains them for six months.
The IDA is forwarding its recommendation to the Montgomery County Board of Supervisors for action when it next meets in October.
IDA Executive Director Ken Rose said 40 jobs meets the state’s criteria for loan satisfaction, in that Power Pallet will be credited with spending $15,000 for each job created. He said because the state’s conditions are satisfied, the local agency has the authority to recommend forgiveness.
The company has already created 32 jobs and needs eight more to reach the new criteria, officials said.
“We are confident we will retain 40 jobs and we will be able to create six more jobs,” said Sam Donadio of Power Pallet.
Several IDA board members said Power Pallet is a major employer planning a $1.2 million expansion and forgiving the loan would help the company in recruiting and retaining employees. The board voted unanimously on the recommendation Thursday night.
The company employs 125 people. It manufactures and recycles wooden pallets used in transportation and storage.
Montgomery County loaned Power Pallet $503,500 in 2008 to assist with its expansion on Route 30 in the town of Amsterdam. It has made payments of approximately $137,000 toward the loan since 2008, remaining in good standing the entire time.
The money came from the state through the Federal Community Development Block Grant program. The county converted the block grant into a low-interest loan to Power Pallet.
Companies that received the grants were supposed to create jobs. Power Pallet used the loan to add a second production line. It was supposed to create 65 new full-time jobs within two years, with 62 made available to low- and moderate-income people, according to a news release from the governor’s office in 2008.
Donadio told the IDA board Thursday his company created 32 jobs within two years using the grant, but could not reach the full quota because of the recession.
“We went through a severe downturn in business,” he said.
The company maintains its own truck fleet and rising fuel costs have also had a negative effect on the company’s bottom line, he said.
Rose said Power Pallet will continue to pay on the loan during the six-month period after it reaches 40 jobs. When that time is up, it would be allowed to stop making payments. He said should the job total fall below 40, Power Pallet would have to restart payments and pay until it hits 40 jobs and maintains that level for another six months.
Donadio said the company plans to hire additional workers as part of its latest expansion. The company plans to build a 4,000-square-foot addition to the current 165,000-square-foot structure.
“We have invested $6 million in the property, bringing jobs and value,” Donadio said.
Power Pallet moved to the site in 2008 from a facility at 500 Sterling Ave. in Schenectady.