Maria J. Flora, Journal ReviewManaging Editor
Questions are being raised about the viability of a company slated to be the anchor tenant for Crawfordsville's new commerce park after officials seized its office equipment for auction.
Only books and some office furniture inhabit the Polyglot Press Inc. offices on the third floor of National City Bank, 101 W. Main St.
Sheriff Dennis Rice posted a notice of seizure on the door when he confiscated computer keyboards, speakers and monitors, phones, software and office furniture. An auction scheduled for next week at Polyglot's Crawfordsville headquarters will be rescheduled because the building's owner asked Rice to have the auction elsewhere.
Christopher Michael Doty, a former employee of Polyglot President David Scott in the Crawfordsville office, sued Scott for back pay earlier this year. Montgomery County Superior Court 2 awarded Doty a judgment of $1,060 plus 8 percent interest on June 21. Another former employee also won a settlement against Scott this year.
Scott said the employees did not do the work they reported and he did not defend himself legally because doing so would have been more expensive than paying the settlement.
But when Doty wasn't paid, the sheriff's department seized Polyglot property to satisfy the debt. Rice said he will not sell the computers' central processing units, which may contain personal or company information.
"I didn't realize they were going to do that (seize property)," Scott said from his Philadelphia office, adding he did not find the sheriff's notice of seizure in his office until two days after the fact. "We'll send them money next week," he said.
The misunderstanding worries city officials who lent Scott $250,000 from the city's Urban Development Action Grant in April 2005, to help the printing firm set up shop locally. On Feb. 3, the Economic Development Advisory Loan Board and Board of Works approved amending the original loan to include $100,000 more. Only half of it was ultimately loaned to Polyglot.
In return Polyglot agreed to be a tech partner for the city, in the hopes Crawfordsville would get tech status for its new Commerce Park, where Polyglot was intended to be the anchor tenant.
In April the Indiana Economic Development Corp. rejected the city's application for tech-park status. Specifically the state wasn't satisfied with the wage level and technological impact offered by Polyglot Press as the anchor tenant. The city can always submit another application at no extra cost.
Scott said Wednesday all the money has been spent on start-up fees, employee pay and other things including travel. "That was all gone a year ago," he said.
Scott's made 33 trips from his home office in Philadelphia to Indiana to drum up business. Each trip cost about $1,000, he said.
Polyglot uses digital presses to scan out-of-print books and make them available again, as well as offers commercial scanning of documents for various city governments. Scott said the trips here were to cultivate business from Indiana colleges that need old works and some new ones scanned. Scott says he can save the schools about a third of the cost they currently pay to have books scanned out of state and overseas.
Scott's Crawfordsville operation has not made a profit and no one works in the local office anymore because he's out of money. "It's just been an expense and a drain," he said.
"If the mayor would simply do what he said he was going to do a year ago, things would look pretty good," he said.
Scott said Mayor John Zumer knew the $300,000 was for six months of operation and that the mayor promised another $100,000 cash and a contract worth $100,000 for Polyglot to scan city documents. Scott said Zumer reneged on both.
Zumer said he doesn't remember having such discussions with Scott. He pointed out the original terms were for $250,000 in UDAG money. Later UDAG's loan committee authorized an additional $100,000, which could be dispersed in increments of the mayor's choosing based on ongoing progress with the operation.
"As I've said many times before, the reason why that additional $50,000 wasn't dispersed was because I wasn't satisfied with the way things had been developing," Zumer said.
"I'm tempted to say the discussions, as I remember them, were of that remaining $50,000 that wasn't allocated, that a potential scanning contract could've come out of that," the mayor said. "At no time do I recollect anything as far as total involvement ever exceeding the total of $350,000. There's certainly nothing in writing that ever promised that." The entire $250,000 loan is due in April, with the entire $50,000 addition due in June 2008. Both include 6 percent interest.
Scott said he's asked for an extension on the $250,000 loan and it's his understanding all the money is due in 2008. Scott said the city agreed to the extension, but City Attorney David Peebles "has just not gotten around to," drafting the agreement.
Peebles concurred with that statement. Currently he only has the two promissory notes. Both sides agreed two things would happen - the city would loan Polyglot an additional $50,000 and extend the $250,000 promissory note to June 30, 2008. So $300,000 plus interest would be due in 2008.
That contract is not drawn up yet, though. Peebles said he's held off on doing so because the deal is conditioned on Polyglot moving to the Commerce Park as soon as phase one construction is done there, which is expected to be complete before the end of the year. If Polyglot doesn't move there as expected, the company would be in default before 2008. Polyglot also is supposed to have a certain number of employees (65) by a set time.
The problem is both stipulations were supposed to have been met by June 30, per the contract. But the city fell behind schedule on construction at the Commerce Park.
"It wouldn't be fair for us to hold (Scott) to that now," Peebles said. "But once the Commerce Park is built, then I do think we can hold him to (the contract)."
"If we end up fighting about it, I don't know what happens," Peebles said.
Zumer and Peebles expressed concern on whether Polyglot will be able to pay it back, but since nothing is currently due, the situation is conjecture.
"I'm not disputing the fact that such things have come into consideration," Zumer said. "Technically, as long as a contract is still out or the due date of a loan payment hasn't come and gone, or even arrived for that matter, some of those things are speculation until they become fact.
"We've adopted a wait-and-see attitude. Certainly if the day comes like any other loan that had been extended via UDAG over the years, the city will do what it has to, to try to ensure compliance."
Scott said Wednesday he's close to a deal with a loose-knit group of investors in Philadelphia and New York. He said he'll have "a big chunk of money together in the next few weeks" to benefit the whole company. But it would also "allow us to pick things up in Crawfordsville again," Scott said.
Scott said he could re-start the Crawfordsville operation, he could offer to start scanning college materials, but until then he can't negotiate those contracts.
Asked if he can make pay back the $300,000, Scott said, "We'll see. If we get financing." Asked what happens if he can't make payments, Scott said, "We'll have funding here measured in weeks. I'm not worried about it at all."
Zumer intends to write a column regarding Polyglot at the end of October or beginning of November for the Journal Review.
The city has a lien on the equipment set to be auctioned. Peebles compared it to a mortgage. If you don't make a payment, the bank buys the house back and pays itself. Officials are worried the city could lose out on the equipment's actual value if they don't buy it at auction. If Scott pays the settlement before the auction occurs, his property could be returned to him provided he takes care of any additional fees, such as costs to the sheriff's department.
Wade Coggeshall contributed to this report.
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