BRUNSWICK

A local company recently received a favorable $247,000 loan from the Brunswick Development Corp., one of whose former directors is married to the company’s owner.

The agreement — approved July 24 by the Brunswick Development Corp. Board of Directors — includes a promotional deal in which the town’s promotional logo is to appear on all Brunswick Taxi vehicles.

Brunswick Taxi — the only cab company in town — is owned by Dale King. He is married to Joanne King, a former chairwoman of the Brunswick Town Council and member of BDC’s board of directors.

King already has begun upgrading some of his fleet, buying new vehicles and equipment, hiring more drivers and converting to compressed natural gas.

He is being charged a relatively low interest rate — 4.25 percent over 10 years.

Other local banks’ commercial lending rates vary — currently from 4.25 to 4.75 percent, most with 15-year terms — and require collateral to secure the loan.

King was not required to post any assets as collateral. Although interest began to accrue Aug. 1, no payments are due until Sept. 1, 2016.

Moreover, as long as King’s company follows the loan terms, the entire principal and more than $50,000 in interest will be forgiven by the end of the third year.

The loan includes:

— $150,000 to buy six new vehicles.

Many of the company’s existing vehicles are old with very high mileage, and they require extensive maintenance to remain in service. Buying new cars will reduce maintenance and increase efficiency and profits, as well as improving the business’s “image,” according to the loan’s terms.

King also agreed to paint a promotional logo on his vehicles, artwork that was developed by the Brunswick Downtown Association and approved by the Town Council in late July. Bearing the town’s official “brand” may give the impression that the company essentially is a municipally sanctioned taxi service rather than a privately owned business, but nothing in the agreement dissuades the implication.

Terms of the loan agreement read that Brunswick Taxi will “work with Brunswick Downtown Association/ Town of Brunswick for marketing and branding, not limited to painting the Brunswick logo on the back of the taxis,” and that the company would buy annual advertising at the visitors center for at least three years.

Town Manager Gary Brown refuted that the cabs would be marked as official town vehicles.

“The cabs will not have the town logo,” Brown wrote in an email to The Times Record. “Brunswick does not have one. We have a town seal, and that is not on the cab.”

— $30,000 to buy a handicapped accessible minivan to serve hospital or assisted-living facility customers.

— $45,000 to buy a new 14- passenger van to serve increased business from Bowdoin

College, Brunswick Landing, hospital and Brunswick Transportation Center traffic.

— $10,000 for global positioning tracking and navigation units.

— $12,000 for compressed natural gas fueling conversion kits for all new cabs.

Brunswick does not yet have a compressed natural gas fueling station, though plans exist to build such a station at Cook’s Corner within several years.

The agreement also states that King will retain possession of the cab company for at least three more years, and may sell it only to his daughter.

If King keeps to the agreement’s terms, the loan’s balance will be scrubbed by Aug. 1, 2016, and the loan effectively amounts to little more than a gift to a local businessman.

Personnel in the state attorney general’s and Secretary of State’s offices said the loan breaks no laws; perusal of the town’s Charter and the Brunswick Development Corp.’s bylaws confirms no statutes have been broken.

Multiple attempts to reach King and BDC president Larissa Darcy for comment were unsuccessful last week. A list of questions pertaining to the transaction — requested by Darcy and sent by a reporter at The Times Record — subsequently went unanswered.

Brunswick Development Corp. is a private, nonprofit entity established in 1995 to spark development.

Other BDC directors include current Town Council Chairwoman Suzan Wilson and at-large Councilor John Richardson Jr. Town Manager Gary Brown and Finance Director John Eldridge are exofficio members.

BDC routinely lends money to local businesses. Recent recipients include Maine Street retailers Gelato Fiasco, for $91,300; and Cool As A Moose, two loans totaling $350,000.

The group also granted money for two feasibility studies: $20,000 for a neighborhood ice rink at Cook’s Corner, as well as $15,000 to determine whether a storage shed on Union Street should be renovated into a yearround home for the Brunswick Farmer’s Market.

BDC was funded with a $1.7 million loan from the town as seed money in 1995. The upstart economic development group initially purchased land at Business Parkway and built the Brunswick Technologies building.

BDC later sold the building for $3.1 million, paid back the town’s investment, and used the rest of its profit to establish a pool from which it has continued to lend money to other town businesses for expansion.

More recently, it prominently has figured into town business during the past year because of two high-profile land deals that some residents have decried as beneficial to the town’s government but a drain on its taxpayers.

The new police station stands at the corner of Stanwood and Pleasant streets on land that was purchased for the town by BDC. In return, the town agreed to trade the current municipal office building at 28 Federal St. to the BDC for sale or reuse. Town Councilors in July approved sale of 30 Federal St. — Parks and Recreation’s former home — to BDC, as well, which was negotiating the sale of both 28 and 30 Federal St. buildings to Coastal Enterprises Inc., a Wiscassetbased nonprofit.

The buildings subsequently were sold for $300,000, far less than their combined appraised value of more than $500,000; the town’s share of the sale was $225,000.

On Aug. 22, BDC signed the purchase and sale agreement with CEI, which intends to raze both aging buildings and in their place build its new state headquarters.