Boniferro Mill Works granted another loan extension

The City of Sault Ste. Marie has agreed to extend a loan to Boniferro Mill Works.

The decision allows the company to continue to pay $1,500 a month until the balance of the loan is paid off, instead of paying the remaining $42,000 by the end of this month.

Two City councillors expressed reservations last night about the decision but nonetheless supported it.

"I can assure council and the taxpayers that I would not be in favour of any loans," said Ward 4 Councillor Lorena Tridico. "Especially now that the community is in an economic crisis and we have many businesses that have been in business in our community for a long time but have had to close their doors.

"These companies have not made any attempt to borrow money interest-free from the taxpayers but instead have closed their doors and there have been job losses as a result," Tridico said.

The Ward 4 Councillor added that she believes Boniferro should find other financing to repay the interest-free loan it received from the City in April 2007, and not rely on taxpayer money for it.

John Febbraro, director of industrial marketing for Development Sault Ste. Marie, addressed City Council last night on behalf of Boniferro Mill Works.

Febbraro responded to Tridico's concerns by reminding council that the interest-free loan of $60,000 Boniferro got from the City was to repair and upgrade a rail spur on Boniferro property, not to augment or sustain business operations.

"The money wasn't for Mr. Boniferro, it was for the infrastructure which was the rail spur," Febbraro said. "Several companies use that rail spur."

Febbraro said there are few businesses in the Sault with access to a rail spur and Boniferro Mill Works affords them full access to it provided their activities don't interfere with operations at the mill.

"If this rail spur were not repaired, not only would it put Boniferro out of business, it would have put several others at risk."

Febbraro also said that Boniferro continues to employ 50 people and maintain operations despite the economic downturn.

"There will be a spring shutdown this year, but only for four weeks," he said.

Febbraro said there may be some short-term shutdowns in the coming months but Boniferro has done and continues to do everything it can to retain its workforce and protect those jobs.

Ward 6 Councillor Ozzie Grandinetti also said he was concerned about extending the loan to Boniferro.

"I was supportive of this when it first came to council a couple years ago," Grandinetti said. "But this is getting to be a little too much now. Are any of these other companies using the rail spur contributing any money toward it?"

Febbraro said he didn't know if they were.

Febbraro added that Boniferro Mill Works is continuing to stick to the repayment schedule it agreed to last May.

In May, 2008, Boniferro agreed to pay $1,500 a month on the loan since then but was unable to pay the remaining $51,000 on November 30.

On November 15, 2008, Council granted the company a six-month extension as it continued to pay $1,500 a month with the remaining amount to be paid in full by May 30, 2009.

The balance of the loan will be $42,000 at the end of this month.

It will be paid in full by September 30, 2011 under the payment schedule agreed to by City Council and Boniferro.

Boniferro also agreed that, if economic circumstances change positively for the mill's ability to financially afford the balance immediately, it will pay out the remaining portion of the loan in full at that time.