City's Small Biz Agency Has Only Given $2.5M of $42M in Federal Sandy Cash
SOUTH STREET SEAPORT — Hundreds of city business owners whose storefronts — and livelihoods — were devastated by Hurricane Sandy more than a year ago are still waiting for federal money meant to help them recover.
More than 330 small businesses have applied for the federally funded NYC Hurricane Sandy Loan & Grant, a $42 million program that offers loans of up to $150,000 at a 1 percent interest rate, along with grants of up to $60,000.
So far, however, only eight business owners have received any money, according to the city’s Department of Small Business Services, the agency that is administering the program.
The eight businesses that have received money have gotten a total of $2.5 million, the SBS said.
“The process to get this money has really been a nightmare,” said Fernando Dallorso, whose Front Street eatery, Stella Maris, had to be gutted after the storm and still has not reopened.
“I understand that getting federal money isn’t easy," Dallorso continued. "But this long, complicated application process is just adding to all the difficulties we’ve all been through.”
Dallorso and owners of several other Seaport shops — including pet groomer The Salty Paw and restaurant Nelson Blue — said they applied for the federal grant and loan program last June, right after it was announced as a way of helping those battered by the October 2012 storm.
But nearly a year later, some business owners said they are unsure where their application stands, and others said the only time the city communicates with them is to ask for more and more financial information — a task made even more trying since many of their documents were destroyed in the flood.
Adding to their frustration, business owners said they have already poured hundreds of thousands of dollars into reopening their shops — but, according to the federal government's restrictions, any money they receive from the program cannot go toward reimbursing what they've already spent.
“We have all scrounged together whatever money we could to reopen over the past year, because we’ve had to, this is how we support ourselves and our families,” said Amanda Byron Zink, the owner of The Salty Paw, which she’s managed to rebuild after 11 feet of water tore through her shop, ruining not just the space itself, but also thousands of dollars worth of grooming equipment.
"That loan and grant money would have been so helpful as we were trying to rebuild," Byron Zink continued. "Now, at this point, after pages of applications, and so many conversations with the SBS officers, we have no idea what we’ll receive.”
The money for the loan and grant is meant to go toward working capital — cash used for payroll, marketing, utilities and rent — as well as purchasing moveable equipment.
But many owners said because of the delay in processing their applications, they’ve already had to invest a large amount of cash to buy all their new equipment, and get their business off the ground — all of which has left them with debt that these federal funds can’t help with.
Byron Zink, for example, needed to spend $25,000 just to replenish her merchandise destroyed in the storm — like pet grooming supplies and treats for dogs and cats — to reopen her shop last September. That money could have been covered under the loan stipulations, but since she's already purchased the goods, she's left with debt she'll have to repay.
Officials from the Department of Small Business Services acknowledged to DNAinfo New York that the application process for the federal funds has been long and complicated. After fraudulent use of federal money following disasters like Hurricane Katrina, the government has become even stricter in how they distribute relief funds, officials said.
According to SBS officials, out of more than 335 applications submitted, 143 applications are currently with the lender that decides on the loan and grant amounts, the final step in the process, and should be approved soon. Another 40 are in the final review phase with the SBS, before they are sent to the lender, and 155 applications are in earlier stages of the process.
Applications from small business owners, defined by guidelines found here, will continue to be accepted until the $42 million is exhausted, SBS officials said.
SBS and mayor’s office officials said they are working with the U.S. Department of Housing and Urban Development to try and get the loan and grants out more quickly. They're also hoping to remove the cap on the amount of funding a business can receive.
To deal with the issue of owners having already invested thousands in reopening their businesses — exactly what the program was supposed to help them do — SBS officials said they'll be taking into account how much the owners have spent when evaluating their current need for the loan.
While owners say SBS workers have been helpful as they navigated the application process, it has still been daunting, and most have received no money so far.
One of those business owners — referred to DNAinfo New York by the SBS — said he too thought the needed federal money to reopen his Staten Island pharmacy destroyed by the floods might never come.
“After months of paperwork, and some letters on our behalf from our local officials, we finally started to get the money in January,” said Lou Spadafora, who co-owns Midland Pharmacy, a 93-year-old business in Midland Beach. “We never could have reopened the shop without those funds, and we’re so grateful to finally have it.”
Spadafora said he’s already received more than $100,000 in federal aid, and his funds will continue to come in every three months or so, as his need is reevaluated by loan officers.
The issue of loan and grant money is crucial to the South Street Seaport business owners because most were without flood insurance, and were denied any funds from their insurance company.
There also haven't been many opportunities for recovery money or affordable loans. Some were awarded up to $20,000 in grants to rebuild early on from the Downtown Alliance. The city also quickly offered an emergency loan and grant program after the storm that gave some owners up to a $25,000 loan and $10,000 grant. Many owners say they had that money within a couple of months after the hurricane, but, unfortunately, it's not just enough.
“Really, at this point, we just want whatever we can get,” said Byron Zink. “We just want to know when we’ll get any money.”