Democrat Gov. Ed Rendell is going to prop up bankrupt Boscov’s department stores — with your money. $35 million smackeroos, to be exact. How long before California Pizza Kitchen and the Cheesecake Factory and Spencer’s Gifts and Chuck E. Cheese get theirs? (Oh, and don’t worry. I’m still keeping tabs on the Newspaper Bailout Countdown Clock.)
Gov. Ed Rendell announced today that the state will direct $35 million of federal Housing and Urban Development money to Al Boscov and his family to help them purchase the bankrupt department store chain.
Rendell said the money will help Boscov secure the funds to complete the purchase in bankruptcy court.
Without the money, the department store chain may not be able to survive, he said. It has 39 stores and 9,000 employees in the mid-Atlantic region. Rendell said there are 25 stores and 5,000 employees in the state. Boscov’s is based in Reading.
“It would be devastating in the state of Pennsylvania to lose Boscov’s,” he said.
The family also is receiving $6 million in federal funding from the cities of Scranton and Wilkes-Barre. Rendell said Boscov and other family members are putting in $53 million of their own equity.
Still, the family needs more funds to complete the deal. Rendell said the $35 million, in the form of a Section 108 HUD loan, is contingent on Boscov arranging the bridge financing to consummate the purchase.
A hearing has been scheduled for 11 a.m. Friday on the sale of the Boscov’s assets. Boscov’s filed for Chapter 11 bankruptcy protection on Aug. 4 in the U.S. Bankruptcy Court in Delaware.
Update: Two county governments in New Jersey are planning Boscov’s bailouts out, too…