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Grant money didn't make it in time

  • AL ZAGOFSKY/SPECIAL TO THE TIMES NEWS The main building at the Eckman Building Components is currently rented to a flea market. Other buildings, used for construction of the company's truss products seem to be closed. Eckman Building Components won…
    AL ZAGOFSKY/SPECIAL TO THE TIMES NEWS The main building at the Eckman Building Components is currently rented to a flea market. Other buildings, used for construction of the company's truss products seem to be closed. Eckman Building Components won a grant for technological improvement but wasn't around long enough to collect it.
Published December 05. 2009 09:00AM

The announcement of a grant to an area company would seem to invite a celebration, but not in this case.

Between the time Eckman Building Components of Lehighton had filed their application for a technology improvement grant and the time the funding was awarded, the business closed.

In mid-November, the Ben Franklin Technology Partners of Northeastern Pennsylvania's Board of Directors announced the approval of an investment of $519,537 in support of regional economic development. Ben Franklin is a state-funded economic development organization that links firms with experts, universities, funding, and other resources to help them prosper through innovation.

Among the announced grants, Eckman Building Components of 1280 Main Road in Lehighton was to receive a $31,750 award. The funding for the manufacturer of prefabricated wooden roof and floor trusses would be earmarked to partner with Lehigh University's Enterprise Systems CenterOptimize to help reduce production costs for SpaceJoist, a new product that is lightweight, green, and eliminates the need for electricians, plumbers and HVAC technicians to cut and drill roof trusses at job sites.

Attempts by The TIMES NEWS to contact Eckman were unsuccessful. Their phone service was disconnected and their Web site was down. A visit to the company's location showed no activity except for vendors that had rented the building. One renter said that he was told that the company had "closed for the season."

Ben Franklin marketing director Laura S. Eppler said that Eckman had applied sometime between March and May, and the proposal was approved in June. Although the funding was approved, Ben Franklin withheld announcing the awards until the Pennsylvania budget was passed and the funding remained in the budget.

"We don't want to do a release on funding that we don't actually have," Eppler noted. "That's why the release came out late. It was a timing issue. Apparently they ceased operations a couple of weeks before I sent out the release and I was not aware it occurred. Unfortunately, we awarded it a while ago and we held the release because we hadn't received our funding yet.

"The money wasn't awarded. No money ever went to them. The project was canceled when it became apparent that the company was going to cease operations," she said. "It's money that we are allocated to provide to companies to improve their competitive positions. The money stays with Ben Franklin to invest in another firm."

"It's kind of an interesting company because it was a Green Product, using recycled steel with fiber that outperformed the traditional joists that are currently in use. It was disappointing that the company didn't continue operations."

On Tuesday, in the Carbon Court News section of The TIMES NEWS, it was reported that the Mauch Chunk Trust Company of Jim Thorpe filed an action against Eckman Lumber Company, and its president, John W. Eckman II, alleging a default on a promissory note.

"Sought is $683,479.61 and interest," it stated.

Mauch Chunk Trust president Pat Reilly acknowledged the court action but could not discuss details of the suit. He said that Eckman had been a multi-generation business in the community and had been a Mauch Chunk Trust customer for about 10 years.

He said that Mauch Chunk Trust's large community business customers typically borrow in the range of $100,000 to several million dollars.

"When you make a loan, you try not to have a loan go bad," Reilly said. "But you expect some losses. You follow a process, and if you follow the process, you are not going to have too many bad loans."

"You also have to set aside reserves for potential losses," he said. "We have problem loans like every other bank. We have a reserve to fund these things. We take a certain amount from our profits to set aside."

Reilly said that loans of this type are typically secured by real estate. He said that Mauch Chunk Trust "has about $300 million in total assets, $27 million in equity, and a loan loss reserve of over $2 million."

Eckman Building Components was a leading wholesale truss and wholesale wall panel manufacturer. They were a member of the Wood Truss Council of America; the Truss Plate Institute; the Manufacturers Association of Mid-Eastern Pennsylvania; and a twenty-five year member of the National Federation of Independent Business.

The Eckman Lumber Company was founded in 1935 by Donald Eckman to supply mine timber and building materials to the anthracite mining industry. In 1947, Eckman began supplying the area's building trades through four regional stores.

In 1979, the company opened its truss fabrication operations.

In 1989, the building materials business closed, and in 1990, Eckman reorganized to focus on engineered products, and in 1996, became a strictly wholesale supplier.

Eckman Building Components president John Jack Eckman II is the third generation owner/manager of the firm. He holds a Bachelor of Science Degree in Chemical Engineering and a Master of Business Administration from Lehigh University. He became executive vice president in 1972 and president in 1989.

Eckman Building Components is likely to have suffered from the downturn in the economy that has hit the construction industry particularly hard.

The industry is down by nearly 50 percent form 2006, and 15 percent below the lowest previous point since the year 2000.

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