Businesses clamor for grants
BY JOYCE M. ROSENBERG Associated Press
Sunday, December 09, 2012
12/09/12 at 4:32 AM
NEW YORK - As Adam Weprin looks over the damage to the Bridge Cafe caused by superstorm Sandy, he wonders where - and when - he'll get the money to repair his Lower Manhattan restaurant.
Stores, restaurants, factories and offices across the Northeast were damaged or destroyed by the Oct. 29 storm. So far, almost all the recovery money that's being offered to small businesses by government agencies is in the form of loans, but taking on debt is one of the last things owners want to do as they try to recover from the storm in an already challenging economy.
Grants that don't have to be repaid are a more desirable option for most owners - and after the Sept. 11, 2001, terror attacks and Hurricane Katrina, many small business owners were saved by these kinds of funds. But so far, grant money for small businesses hurt by Sandy is relatively scarce.
Although many larger businesses also have big recovery costs, the need is more urgent for small companies because they tend to have fewer reserves and are more dependent on cash flowing in daily. Small business owners who don't get back to business fast could be forced to close their doors forever.
In New York City, Mayor Michael Bloomberg has announced $5.5 million in grants for small businesses from two not-for-profit organizations, the Mayor's Fund to Advance New York City and the Partnership for New York City. But that won't go far, considering that thousands of businesses suffered damage, many of them into the hundreds of thousands of dollars.
Citywide, the damage estimate for homes and businesses was put at $19 billion. In New Jersey, the cost of recovery and rebuilding from the storm was an estimated $37 billion. All told, Sandy caused an estimated $62 billion in damage in the Northeast and Mid-Atlantic states. It's not known how much of the damage was suffered by small businesses.
Weprin is hoping that federal, state and local officials will quickly come up with grants to help him rebuild and survive. There are a number of efforts under way with grant money available from nonprofit groups, fundraising activity and even from one of the utilities serving New York City. But most of the grants are tiny in comparison with what many companies need.
Weprin can get a grant of $20,000 from a business group called the Downtown Alliance. He estimates it will take at least $300,000 to rebuild the basement of his 218-year-old building that was flooded by water from Sandy's storm surge. He's not sure what he'll get from insurance.
"Twenty thousand is a hiccup," he says. After Weprin's wood-frame building was flooded, the timbers in the basement were ruined - he describes the wood as now having the consistency of sponge cake.
Another $10,000 grant is available from the $5.5 million fund Bloomberg announced but only if Weprin takes out a $25,000 disaster loan from the city's Emergency Loan Fund. "I don't need another loan on my head."
Other business owners have expressed the same sentiment as Weprin, but loans are the first thing owners hear about when they ask for disaster relief help.
The Small Business Administration, state and local governments, and economic development organizations are some of the big sources of loan money. Corporations such as Goldman Sachs Group Inc. and JPMorgan Chase & Co. have contributed money to loan funds. The SBA loans have a low interest rate of 4 percent, and some of the loans in New York are no interest for the first six months.
In Sea Bright, N.J., Brian McMullin doesn't want a loan to rebuild his ice cream store, Gracie & The Dudes. The store, a block from the beach, had to be gutted. "I would dance in the street for a grant," he says.
Proprietor Adam Weprin (right) of the Bridge Cafe in New York's South Street Seaport assists worker Lee Fredericks with taking down lights in the restaurant on Tuesday. Weprin is hoping that federal, state and local officials will quickly come up with grants to help him rebuild and survive after superstorm Sandy. RICHARD DREW / Associated Press