<< Back 10/16/02 Textile firms rely on loans to survive By Don Hendershot The roller coaster ride of the textile industry in Western North Carolina continues. The Sylva town board voted unanimously Oct. 3, to request full payment of the $187,000 it loaned Ashley Co. Ashley announced last week it would be closing its doors in Jackson County and moving operations to Greenville, Ill. Jackson County commissioners voted unanimously, at a special Oct. 10 meeting to approve a $300,000 revolving loan for another textile industry in the county — QC Apparel. Commissioners are expected to discuss the fate of Ashley’s $190,000 debt to the county at their Oct. 17 meeting. Jackson County’s revolving loan program was established through a state grant to assist Tuckaseigee Mills. Instead of going to the state, Tuckaseigee’s loan reimbursement went into a “revolving loan fund” administered by the county and the town of Sylva to provide low-interest business loans in an attempt to boost the county’s economic development. According to county finance officer Darlene Fox, there is no local money in the revolving loan program. Tom McClure, chairman of the Jackson County Economic Development Commission, told commissioners that if QC Apparel Inc. did not receive the $300,000 revolving fund loan it had applied for, it “would probably go the way of other area textile industries.” McClure said the revolving loan committee was unanimous in its support of QC’s loan application. He said the company had a niche product and that buyers were knocking at the door. QC Apparel sells its products to large chain department stores. QC Apparel opened its doors in Sylva in 1988. The company currently employs 35 people. McClure said with the loan and the new contracts that number would grow to 67 within one year and to 118 by the second year. According to McClure, the expansion at QC comes at an opportune time for Jackson County textile workers. He said the company would be able to call back workers that had been laid off plus provide jobs for some of the 55 workers who will lose their jobs in December when the Ashley Co. closes. Jackson County planning director, Tamera Crisp, told commissioners that QC’s owner had already spoken with Ashley employees. McClure said that QC needed the loan to cover the operating expenses of moving into a larger building, securing new machinery and inventory and paying salaries. Security for the loan is covered by the owner’s personal property and all business assets not pledged. Commissioner Roberta Crawford asked if QC might be able to obtain the loan from another source. “This is not a bankable deal at this point,” McClure said. QC is currently one year in arrears on a loan from the county. McClure said that loan would be included in the proposed deal. “The other side of that is, we’re in the high risk lending business for deals that cannot be done conventionally,” said McClure. He said the fact the owner was willing to put his personal property up for collateral and hire a financial person, as recommended by the revolving loan committee, “makes a difference.” The time table for repayment is five years. According to McClure, the first year will be the payment of the 7 percent interest. Years two through five will be the retirement of the loan. “If this is what the money [the revolving loan fund] is for and the company has been in this field for 15 years and can employ 25 to 30 people in six months and 118 in two years, I don’t have a problem with it,” commissioner Conrad Burrell said. In upcoming Board news,two local contractors are scheduled to appear before Jackson County commissioners at their Oct. 17 regular meeting to appeal penalties assessed for violation of the county’s Sedimentation Control Act. These appeals come on the heels of a Sylva Herald story (Oct. 10) which reported that contractor and planning board chairman Jack Debnam and Jackson Land and Timber Co. would not be fined for gross violations of the ordinance which occurred between February and May of this year. County Manager Ken Westmoreland told the Sylva Herald that Debnam’s position as chairman of the planning board played no part in the county’s decision not to pursue legal action. The problem, according to Westmoreland, was that the county had not passed a penalty phase of the ordinance until July 25. Westmoreland said the county could not penalize violators ex post facto. The two violations that will be before the board Oct. 17 occurred between May 9 and June 10 and between May 20 and June 10.