BY TERESE LOEB KREUZER | In the months since Superstorm Sandy wiped out many small Lower Manhattan businesses, owners report that they have pursued every government financial aid program that seemed to offer help, but mostly to no avail. Now Congress has authorized $51 billion for Sandy relief, with $1.7 billion earmarked for New York City. Mayor Michael Bloomberg has said that $100 million of the city’s money will go to help small businesses recover, but the qualifications have not been spelled out.
“When you get down to the fine print, how effective those grants are is going to be critically dependent on the terms of the grant and eligibility,” said Ro Sheffe, chairperson of Community Board 1’s Hurricane Relief Small Business Task Force. “A lot of previously offered grants had specifically said that the money received by the merchant could only be used for build-out of destroyed spaces.”
Sheffe said that he had spoken to a number of shop owners who told him that they had already used their own savings to begin the build-out because they were desperate to get back into business. “Now they need working capital to pay wages and benefits and to restock inventory,” he said. “If the [federal] money is restricted only to build-out, that grant money will do them no good.”
One such owner is Amanda Byron Zink, owner of The Salty Paw, a dog grooming and pet supply boutique formerly at 38 Peck Slip. “So many of us do not own our spaces,” she said, “so all this potential money goes back into leasehold improvements and hard assets. If I am going to have a fighting chance to reopen my pet boutique (in virtually a ghost town), what I need now is money to help with my overhead, my increased rents, inventory for my shelves, and business and sales lost.”
Zink estimates that her store will have been closed seven months by the time she may be able to reopen in the Seaport and that she will have lost $200,000 in revenue.
Linda Marini, who formerly owned Barbarini’s restaurant and market at 225 Front St. along with her husband, Claudio, and two partners, raised other issues about how previous financial aid has been structured and why it didn’t help. It required that a business reopen at — or in some cases, near — the place that it occupied before Sandy, she said, but Barbarini’s will not be able to reopen in its old location because the partners have decided to go their separate ways.
“Since we are not rebuilding in the original location, we have not qualified for any grant to date,” she said. “We also do not qualify for any loans related to disaster relief because we are not applying as a business to rebuild.”
She said that Barbarini’s had sustained more than $1 million in losses.
“We want nothing more than to rebuild in the area, bring some of our employees back and do what we love, giving us the means to support our family, but it has been one battle after the next,” Marini added. “We attended most of the meetings directed at disaster relief, but to date, we cannot proceed with any type of loan application or grants available.”
She said that she was hopeful that the federal Sandy recovery package could bring some much needed aid, but she feared that she and her husband would still not qualify because there has not been much flexibility in the past as to eligibility requirements.
In addition to these problems, both Sheffe and Byron Zink noted that rents have been rising in the South Street Seaport despite the fact that most businesses are still closed. “I personally won’t be able to get back open if I can’t negotiate a fair and reasonable lease,” Byron Zink said.
Sheffe said that many of the landlords are being hit with higher property tax assessments. He said that Community Board 1 had passed a resolution asking the city and the state to reassess many of the properties that were damaged by the storm and to consider significantly reducing the assessment value, at least temporarily.
“It’s not only damage,” he said. “It’s reduced property value because this storm pointed up the vulnerability of those buildings especially in Flood Zone A. however an assessment or rate reduction in property taxes is not necessarily going to help the merchants. It would be up to the landlords as to whether they pass that financial help along to their tenants by reducing the rents or at least leaving them the way they were instead of raising them.”
Mayor Bloomberg’s plan for disbursing the post-Sandy federal financial aid includes $250 million for grants and low-interest loans to help repair up to 12,790 units of of low, moderate- and middle-income housing in multifamily homes and rental buildings damaged by Sandy. Of this, $120 million would go to help fortify public housing against future storms.
As New York State Assembly Speaker Sheldon Silver noted after the mayor’s plan had been announced, “there are many residential buildings [in Lower Manhattan] that are still uninhabitable as well as others, such as Knickerbocker Village, that sustained massive damage.” He said that these buildings should be eligible for funding.
The city’s plan has to be approved by the federal government, which will take several months. Money will not be available for disbursement before April or May at the earliest.
