Prince George's County Executive Winfield M. Kelly formally withdrew his support yesterday for 2 state-insured bank loans to Beretta Industries, an Italian gun manufacturer seeking to locate an arms plant in the county.
In a letter to the County Council, Kelly said he was "unaware . . . at the time of my endorsement" that the company would be manufacturing "the 25 caliber" Beretta handgun "currently prohibited from being imported into the United States by federal regulations."
The council is expected to endorse Kelly's turnabout at a session today. Such an action effectively would scuttle any chance the Beretta firm has of obtaining a $400,000 state-insured loan to pay for equipment for the plant. The county officials must approve such a loan before the state will formally grant it.
"This signals the death knell in the county involvement of the project," said council member Parris N. Glendening. Glendening and two other council members voted against the loan when it was first proposed in March.
At that time Kelly and several council members supported the Beretta firm's planned takeover and expansion of F.I. Industries, a small handgun factory in Accokeek. Kelly said his support was based on information that the company "would menufacture more expensive target pistols," and "shotguns, sporting goods and other accessories for hunting," rather than making handguns. Kelly also said the Italian firm would "help the county economically" through its "excellent reputation."
After the initial loan request, residents of the county barraged Kelly and the council with angry phone calls and letters opposing the plan. This sharp criticism, plus new information that the loan would be "contrary to the best interests" of the county "caused me to change my mind," Kelly wrote.
This is the first time the county government has withdrawn its support for a loan sought by a business under the Maryland Industrial Development Financing Authority Act.
Originally created to provide an encouragement to industries to locate in Maryland, MIDFA insures industrial loans made to busenesses through the county government. Under the program, business can obtain loans at interest rates substantially below the prevailing commercial rate.
In the past the county has used these loans to finance two other projects: Warner Fruehauf Trailers, a distributorship, and R. M. Thornton Inc., a plumbing contractor.
Officials of F. I. Industries said they did not know if Beretta would look elsewhere for money to equip the Accokeek plant or if the firm intends to go ahead with its plans to move into Prince George's County.
According to the company's attorney, Ellis Koch, "We are awaiting instructions from Italy."