The chances of Butternuts Beer and Ale buying the former Guilford Mills plant grew a little dimmer Friday afternoon.
Schoharie County supervisors agreed not to hold a second mortgage for the Otsego County brewery. Two months ago, supervisors put an October 15 deadline on the purchase of the Cobleskill plant but never formally decided on a second mortgage until Friday.
Butternuts is attempting to secure $1.2 million in funding, possibly through Key Bank, to repair one building at the complex to allow Wal-Mart distribution center to use it from August 1 through December 31. Butternuts officials are hoping that the county would hold the second mortgage for the entire $2.5 million purchase price, according to Alicia Terry, the director of the county's planning department.
The sale of the plant for $2.5 million to the brewery is not dead, but has been wounded, according to Ms. Terry.
"It hasn't killed it yet, but it definitely hurt it and made it more challenging."
John Lorence of the real estate firm handling the sale for Butternuts echoed the sentiment Monday.
"It would have been helpful," if the county board had agreed to hold a second mortgage, Mr. Lorence admitted Monday afternoon.
Company representatives will still seek funding sources and hope to close the deal by the fall deadline, he added. "Our position hasn't changed."
The October 15 deadline is still doable, he said.
"We're doing everything in our power to make that happen...We're just going to keep pushing along."
Wal-Mart has signed a letter of intent to lease the middle building in the complex, and the $1.2 million would be used to repair the roof, lighting and a sprinkler system, Ms. Terry added.
The timing of the board's decision Friday "makes it tight" for that to happen, she said.
Mr. Lorence was on the meeting's original agenda and was scheduled to address supervisors but decided not to come to the meeting and instead continue to seek alternate funding, Ms. Terry told supervisors.
The company, sensing the sentiments of board members, is no longer seeking a second mortgage and that is "off the table," Ms. Terry informed supervisors Friday afternoon.
Supervisors who favored a second mortgage argued that the risk was worth it and pointed to the number of jobs that could be created in the plant, which has been mostly vacant for almost 12 years.
Supervisors against offering a second mortgage stated that, if the business failed, the county would have to pay at least $1.2 million to get back the building it owns now.
The deal "has so many holes in it since it started," stated Carl Barbic of Seward.
"It's unbelievable. I wouldn't do it."
He said he has not seen anything yet that shows him the business would be a success.
"It's totally unfair to the people [of the county]."
Gene Milone of Schoharie also opposed offering a second mortgage.
He told supervisors that he was "vehemently opposed to a second mortgage to Butternuts. It would be a very poor investment. We're at total risk, extreme risk."
Mr. Milone's argument angered Cobleskill Supervisor Tom Murray.
"Gene, you're way off base," Mr. Murray began.
"This could be the best investment this county ever made, especially in jobs."
"I'd be willing to take the risk," Bob Mann of Blenheim added.
Once Butternuts gets funding for the $1.2 million and begins fixing up the buildings, it will increase the value of the property, he argued.
"If we don't do this and the venture fails, we run the risk of starting all over again," Mr. Mann said.
Anne Batz of Broome noted, "We take risks everyday. The risk we're taking is way less than if we turn it down."
Dan Singletary of Jefferson added, "This is a no-brainer. What is it worth to bring jobs to our county? What risk is there?"
The county would go from having a worthless building to a viable one.
"We have it right in our hands--the opportunity to create jobs," Mr. Singletary continued.
Ms. Batz, Mr. Mann, Mr. Murray, Mr. Singletary and Harold Vroman of Summit all voted in favor of offering Butternuts a second mortgage.
Ms. Terry noted Monday that the county has already agreed to hold the mortgage for Butternuts.
Her office will continue to work full bore to make the sale happen, she said.