Creditors for Historic Savage Mill have agreed to extend payments on about $3 million in debt, lifting the old textile-mill-turned-shopping-mall out of bankruptcy.
Allied Capital Corp. and Allied Corp. II of Washington, D.C., the mill's largest creditors, also promised discounts on the debt if it is paid back before the total loan comes due in three years.
The deal, approved by a federal court judge Thursday, protects $900,000 in state and county loans that had been made to the historic mill in 1986 for renovations.
On Oct. 24, the mill was forced into Chapter 11 bankruptcy after the two Allied companies refused to extend an Oct. 1 deadline on $4.3 million in loans.
The mill's owners agreed to pay about $1 million of the debt up front as part of the settlement, leaving the remainder to be paid over the next three years.
"It was no small effort," said Jay Winer, general partner of Savage Mill Limited Partnership. "But there was a great deal of cooperation, especially from all those who were secured creditors."
The mill, with total assets of $6.2 million, was seeking a seven-year extension on the loan from the Allied Capital companies in U.S. District Court in Baltimore.
"What we did was kind of amend and massage that plan to make it work," Mr. Winer said. "It put us in a better position to deal with all the other creditors."
The mill's other debts include $900,000 in secured loans from the state and county, as well as $300,000 in unsecured loans from the state Department of Economic Development, Provident Bank Maryland and Baltimore Gas and Electric Co.
Each year, the mill, at Foundry Street near Gorman Road, attracts as many as 350,000 customers to its 12-building complex.
The mall houses 60 tenants and 250 antique dealers who sublease small spaces. County economic development officials are pleased with the settlement, which protects their investment and the hundreds of jobs at the Mill.
"We're living happily ever after, or at least close to it," said Richard Story, executive director of the Howard County Economic Development Authority.
"Savage Mill represents one of our major tourism destinations, and we don't have many in Howard County," Mr. Story said.
In March, the Allied Capital companies purchased the mill's loan notes totaling $4.3 million from First Union Bank, which established the Oct. 1 deadline.
As part of the loan contract, that deadline permitted the Allied Capital companies to call for full payment of the loan.
Since July, the mill's owners had been seeking an extension of loan payments to the Allied companies on a $2.8 million note and a $1.5 million note, but Allied refused the proposals and wanted full payment.
Mr. Story said the county and most of the other creditors never believed that the mill was in real danger of closing.
"Everybody's goal was to keep the Savage Mill open," Mr. Story said. "We're very pleased."