Newspaper article THE JOURNAL RECORD

Council to Consider Firestone Loan/pearls Ordinance Also on Agenda

Newspaper article THE JOURNAL RECORD

Council to Consider Firestone Loan/pearls Ordinance Also on Agenda

Article excerpt

A proposed low-interest $7 million loan from the City of Oklahoma City to Firestone Tire & Rubber Co. for buying and installing new equipment for Firestone's Oklahoma City plant will be discussed at today's Oklahoma City Council meeting.

The loan was proposed publicly last week by Ward 3 Councilman Jack Cornett. It could generate as much as $500,000 over two years for the city's general fund at an interest rate of between 4.5 percent and 5 percent.

The proposed loan would utilize available funds in the form of a Community Development Block Grant from the U.S. Department of Housing and Urban Development, which would have to approve the loan in addition to approval from city council.

In his proposal last week, Cornett said the loan would be a valid use for the funds as an economic development activity.

The city has aided corporations through Community Development Block Grant funds previously. In September, the city secured $183,000 such grant funds for Wilson Foods Corp. for the construction of a $5.5 million fats and oil refinery.

The city also secured a $697,000 federal Urban Development Action Grant for the Wilson refinery. In addition, $3.7 million in industrial revenue bonds, a $1 million loan from the Oklahoma Industrial Finance Authority and $117,000 in state Community Development Block Grant funds were secured by city and Oklahoma County agencies for the refinery.

Cornett said the Firestone loan funds would not be diverted from any current city projects. In fact, he said the city would be getting double duty from its funds by loaning them to Firestone and then using the repaid money and interest to fund other city improvement projects.

The Oklahoma City Firestone plant has been ordered to reduce its budget by $20 million. The new equipment which could be acquired through the loan would result in an annual savings of $2 million, said Barry Kadechuk, plant manager. …

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