County fears job loss
Published 12:00 am Wednesday, August 22, 2007
LINDEN &8212; The County Commission looks to bail Linden Lumber Company out of debt as a &8220;last resort,&8221; Councilman Freddie Armstead said about a proposed action to grant public funds to loan $7 million to Linden Lumber Company and its affiliates in order to pay down current company debt.
Federal Land Bank announced the foreclosure of the company last week including its properties in Linden and Thomasville.
Armstead said his main concern is for the employees of the company.
Armstead said in considering the devastation, the public should figure 400-plus employees times four, to include family members who will be affected by the job losses.
Armstead said he feels the impact of the company closing will be devastating to both the county and the cities within the county. So much so that he feels the county should consider providing financial assistance to the company.
The Marengo County Commission will hold a public meeting at 4 p.m. on Friday in the Commission&8217;s chambers to &8220;consider, discuss, vote upon and take action on the adoption of a resolution to approve&8221; the loan.
Armstead said the commission has asked for assistance from state and federal agencies, including from the congressional offices of Rep. Artur Davis, D-Ala., and Sen. Richard Shelby, R-Ala., to no avail.
Armstead said the Overmyers have contributed as much as they can to the company.
Armstead said Woody Dinning, county attorney, assured the commission members that the county will be protected on all aspects of the deal.
Dinning said that to secure the county&8217;s offer, the company will pledge the mill site and the Thomasville site for the debt.
Dinning said the property appraised at $18 million for the plant and with liquidation will value at approximately $11 million.
Dinning said the commission will have to make a decision prior to the foreclosure sale on Sept. 7, however a bond issue will take months to implement.
Dinning said that if the proposed bond is instated, the company will use a portion of the $7 million to satisfy the bank debt, and the remainder will be used to purchase equipment the company has had on order for a year.
As listed by the county in the notice of proposed action, the terms of the loan would be for the company to repay the loan in 240 equal installments of principal and interest with the outstanding principal balance of the loan to accrue interest at an annual rate of 5 percent and no more than 6.5 percent.
The public notice states the loan will benefit the public and the company and its affiliates. It reports the county expects the loan to enable the company to retain 425 jobs and the county to retain $13 million of annual payroll having an estimated economic impact on the county of $50 million per year.
Commissioner Calvin Martin said the $13 million of annual payroll listed in the notice is the expected dollar amount of job retention for the county.
Martin said engineers hired by Linden Lumber Company presented the proposed amount of economic impact to the county. Armstead said the study also showed the condition of the company and the impact the company has on the county.
He said the company detailed to the county how the Chinese market affected its business.
Armstead said the study also shows more than $8 million of local city and county taxes monies from the company.
The foreclosure sale date is set for Sept. 7 in front of the Marengo County Courthouse. The sale notice includes all the buildings, fixtures and other tangible and intangible property. The property is to be sold as is.
The notice of the sale names Donald H. Overmyer Jr., Hugh Overmyer and Kathryn Overmyer Earthman as proprietors of the company. Rushton, Stakely, Johnston&Garrett, P.A. of Montgomery is representing Federal Land Bank in the sale.