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In the wake of Superstorm Sandy, small businesses throughout Lower Manhattan have once again found themselves in an economic swamp. Struggling mom-and-pop shops from Avenue C to the Meatpacking District are trying their best to recover. Meanwhile on Front St. in the South Street Seaport the storm left many businesses shuttered, and several hundred employees who, as a result, are out of work are scrambling for income to keep food on the table. Some of the businesses might have been in financial straits prior to Sandy’s arrival and, in the case of some of the Front St. merchants, are still saddled with loans from the aftermath of 9/11.
On Tues., Nov. 20, Karen Mills, the administrator of the U.S. Small Business Administration, visited businesses in the Seaport to assess the damage of the storefronts and to talk to the merchants about their economic woes. Mills championed the S.B.A.’s approval of $20 million in loans for small business relief from Sandy-related damages and financial losses.
“We will stay the course and make sure that this area becomes as vital as it has been in the past, and even more so,” Mills said.
But, more than loans, what the beleaguered Downtown shop owners really need are grants. While some people consider grants to be unwarranted financial handouts, most local politicians and community members agree that these businesses are in dire need of unrestricted cash flow that they don’t have to repay later. The business owners themselves assert that the notion of borrowing money is just as frightening as shutting down altogether, since they’re already swimming — if not drowning — in months or years of debt accrued from 9/11 or otherwise.
Yet Mills tactfully dodged press members’ questions about grants, stressing that loans are the most effective and efficient means of supporting the small businesses. Applying for a loan from the S.B.A. requires a minimal effort of filling out a three-page form on the agency’s Web site, she noted. Moreover, unlike grants, which require — at times, lengthy to obtain — legislation, federal loans have a turnaround time of just 10 days.
The disturbing reality is that neither the S.B.A. nor the Federal Emergency Management Agency (FEMA) has the authority to administer grants to businesses. The S.B.A. only authorizes low-interest loans, while FEMA offers grants to homeowners and renters only. President Obama would have to issue a federal declaration or sign a federal law in order for the government to authorize small business grants.
Indeed, Maud Bonsignour, a co-owner of Bakehouse restaurant, at the west end of Horatio St., sadly, frustratedly told us last week that they don’t qualify for a FEMA grant. The restaurant, which she owns with her husband Philippe, suffered thousands and thousands of dollars’ worth of damage after its basement was completely flooded.
Just as in the aftermath of 9/11, once again the onus is on the federal, state and city governments to determine how to allocate taxpayer money to the businesses and residents — who have this time suffered from the devastation caused by Hurricane Sandy. It will be up to Mills, Obama, Governor Cuomo and Mayor Bloomberg to weigh the importance of supplemental funding for the ailing businesses that are in many ways the cornerstone of Lower Manhattan’s well-being.
We side with Assembly Speaker Sheldon Silver, who has emphasized time and again the need for grants as a means of financial backing for the businesses. As the speaker told Mills during her visit to the Seaport, “To add debt in order for them to continue to operate and to make up for some of the renovations that they have to do…is an extreme burden that will not allow some of them to reopen.”
It is imperative that the South Street Seaport businesses that stuck it out in the years after 9/11 be saved. And hard-hit merchants in the East Village and far West Side/Meatpacking District desperately need help. These businesses are the lifeline of our community and must be preserved in any way possible.