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Paterson issued $800,000 loan to Food Basics. It lost $418,000 in A&P bankruptcy. | Paterson Times

Paterson issued $800,000 loan to Food Basics. It lost $418,000 in A&P bankruptcy.

food-basics

The Paterson Restoration Corporation issued an $800,000 loan to Food Basics half of which had to be written off following the bankruptcy of A&P, according to records obtained by the Paterson Times.

Municipal officials issued the loan to Food Basics, Inc. on May 10, 2010, according to records, with a maturity date of May 1, 2020.

“The store needed modernizing,” said Jamie Dykes, chairman of the Paterson Restoration Corporation (PRC). The loan was for a refit of the store. He said the Paterson Restoration Corporation, a quasi-governmental organization that issues loans to spur job and economic growth in the city, issued the loan to keep the supermarket in Paterson.

When A&P, which owned Food Basics, defaulted in 2015, the Paterson Restoration Corporation had to write off $418,501.

“They are the only ones that defaulted?” asked councilman Michael Jackson, who has criticized the organization for aggressively going after him for defaulting on a $140,000 loan. He unsuccessfully attempted to obtain default records from the Paterson Restoration Corporation.

Initially, the organization refused to provide records to the Paterson Times. However, after three months of back and forth, the Paterson Restoration Corporation released the records last month. In all, 16 loans are in default, according to records.

“How many of them did they go after like they went after me?” asked Jackson. His City Council pay is being garnished by the organization. “Did they go after Food Basics?”

“We took it through the legal process,” said Dykes. “A&P is defunct. There’s no option or possibility, to my understanding, to recover anything further.”

But economic development director Michael Powell, who also serves as the executive director for the Paterson Restoration Corporation, said there may be some hope.

“Several years from now, the PRC will get some sort of a settlement check,” said Powell.

Powell confirmed the corporation has filed legal paperwork in the supermarket chain’s bankruptcy case. He acknowledged any settlement amount is likely to be far less than the $418,501 owed.

Dykes said the corporation refers delinquent borrowers to its collection agency. He said it also goes after them through the courts. Records show the corporation has in place two pay garnishments.

The Paterson Restoration Corporation was created in 1977 with an $11.1 million federal grant.

Email: jay@patersontimes.com

  • Miss jamaica

    A&P had problem for quite something, whoever was responsible for reviewing the financial for this principle fail Paterson miserably. They should be fired.
    The Corp office out of montvale nj was in problem since 2000.
    It was always very public that ap tea company was in trouble.
    I will agree that Paterson May be able to recover something in the future only if we pursue.

  • MarquinhoGaucho

    This is why corporate welfare should be banned. The oligarchs get their golden parachute and the tax payer gets the bill.

    • Yogi Zuna

      I worked as an armed guard there in the 1970s in the store and where the board of education now is in the 6th ward, which used to be their headquarters. Even then, management was sloppy and lazy. I caught a guy switching labels on meat, and they would not even call the police. Less then a slap on the wrist, so what the hell was I there for!

  • Plumber

    That's fucking great I can't stand paterson politicians take care of the big guys and fuck the peasants

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