GUILDERLAND — Jonathan Phillips, president of the local company Phillips Hardware, says that his expansion plans for the corner of routes 146 and 158 are now on hold as he re-scales the company. He had started construction on a new building when, because of a series of unforeseen events, he decided to withdraw his own loan application. 

He plans in the future to re-engage, he said, with the town, with Guilderland’s Industrial Development Agency, and with lenders, to “re-approach how can I finish this,” he told The Enterprise, while standing in front of the shell of the new building he had started to construct prior to getting final approval for a $4.6 million loan.

He has sold two of his five stores to pay off the construction that he had started, Phillips said.

Phillips had planned to build a new, bigger hardware store to the north of the current store and then, when it was completed, to demolish his old store and build a convenience store in its place, with gas pumps. 

Originally he had also planned to build a sports dome further northwest on Route 158, to provide an indoor location for Guilderland athletes to practice and play, but earlier he had placed that part of the plan on hold to focus on the new shop and convenience store. Phillips has for many years been the president of the Guilderland Little League. 

Earlier this year, the Guilderland Industrial Development Agency had granted Phillips two forms of tax relief — on sales tax and mortgage recording tax — on the project of constructing the new hardware store and convenience store, but had denied his application for a PILOT, or payment in lieu of taxes. 

Phillips said he had told his contractor, David Franco of Franco Construction Services LLC, that he had been assured he would get the $4.6 million loan, but that it was not yet finalized; together, he said, he and the contractor had decided to start construction in November. 

But then, over the next few months, a series of unforeseen circumstances arose that, cumulatively, made the prospect of taking on the loan before it was set to expire on March 15 seem too risky, Phillips told The Enterprise. 

Between December and March, he said, a number of things changed:

— The shutdown of the federal government froze a loan guarantee he had expected to receive from the United States Department of Agriculture Rural Development program.

— A snowstorm postponed the Industrial Development Agency public hearing he had expected to have earlier and, on the rescheduled date, the night before his closing on his financing package, the IDA board had voted to separate Phillips’s requests and grant the two forms of tax relief, so he could proceed with securing financing for the project, but had put off making any decision about a PILOT until the following month.

— Phillips’s father was hospitalized after suffering a fall and contracting pneumonia.

— Kinderhook Bank was bought out by Community Bank, and the new loan officers wanted to see, for the first time, Phillips’s sales figures for 2018, which had been a leaner year than the two preceding years.  

“I called the bank and disclosed that my numbers for 2018 were not so good,” he said. “Our numbers were changing, and I was too uncomfortable with what was happening.”

At that same time, Phillips said, his 10-year-old son, knowing the stress Phillips had been under for several months, told him it was OK if he didn’t spend any time with him any more. 

Phillips confided in his wife, he said, that he had been “drowning” for the past few months, and they decided that there was too much uncertainty — “too many variables at once,” Phillips said — to go through with the loan.

Just before his closing on March 12, Phlllips said, he withdrew his own loan application and decided to pay off all of his debts on the Altamont store and then reassess. 

He sold two of the company’s five stores and paid off $700,000 in bills related to the construction, including paying his contractor who in turn was then able to pay his subcontractors.

Phillips did not feel confident at the time, he said, to sign on for another $4.6 million in debt. He explained, “I felt like, with all the things that were happening, we needed to be in a better place financially before taking the full plunge of finishing the project.

“Most people, when they get in so deep, they just keep going,” he said. “And I probably could have kept going, but —” 

By selling the two stores, he not only paid his contractor but also his architect and an asbestos-removal company, Phillips said, adding that he had stayed in touch with them throughout the process, letting them know what was happening. The asbestos-removal company took down and cleaned two old structures behind the store, he said. 

“They knew I was always not running from them,” he said of the people who had been awaiting payment. “I was always updating them, because it was stressful for them to be owed. I was trying to make sure they were taken care of.” 

Contractor David Franco confirmed this, saying, “Jon basically kept me in the loop the whole time about what was going on and about his plans on paying me back. It took a little while, but he actually did it fairly quickly for the situation we were in.”

Franco added, “He’s a gentleman and a man of his word. I would do business again with Jon Phillips.” 

The land in Altamont, at the corner of routes 146 and 158, is now “zero debt,” said Phillips.

He kept the stores closest to where he lives and works and sold the Schenectady and Waterford branches. He and his family moved in December 2017 to be closer to the Altamont project — they now live within four minutes, Phillips said — and to be part of the Altamont community. 

He now has just three stores, all close to home: the Altamont store at routes 146 and 158, a store in Delmar at 235 Delaware Ave., and another store in Voorheesville at 18 South Main St. He grew up in Bethlehem and knows the people there, he said. 

Earlier, in 2016, Phillips had closed the company’s Colonie store and moved the company’s offices to Voorheesville. He planned to keep the offices in Voorheesville until the new Altamont store could be constructed. 

His wife, Amy Phillips, also went back to work for the company full-time, in operations. The company had to dismiss a long-time employee who had been doing that work, Jonathan Phillips said, but offered to pay her until she could find another job. “She was a rock-star employee and found a new job within a month,” he said.

He has also refinanced his existing debt on the company, leveraged on the Delmar store. This debt is in the “high $300s, probably, right now, which is the lowest amount that our company has ever owed,” he said. 

He will need to put a roof on the new unfinished building to protect it for the winter, Phillips said. Then he might be able to “reboot,” he said, and get the new store completed in 2020. The company will need to examine its options, Phillips said, for the gas station and convenience store part of the project, including whether to lease the land or operate the store itself. 

The company is now “in a good place,” Phillips said, and he and his wife are working closely together to create a solid future for the sixth generation of his family — Phillips’ is the fifth — to own and run the business.

Working in a smaller geographic area than the company had been before will allow Phillips to focus, he said, on “being successful in the markets we’re operating in.”