Small businesses tell of bureaucratic nightmare trying to get Sandy grants

 Assembly Majority Leader Louis Greenwald speaks to small business owners struggling to recover from Sandy.

Assembly Majority Leader Louis Greenwald speaks to small business owners struggling to recover from Sandy.

When Sandy made landfall along the Jersey Shore in October 2012, Keansburg restaurant owner Chris Madden had his hands full working his second job as a Holmdel firefighter. He said protecting his business wasn’t really among his top concerns. But while he was away, “Charlie’s Place,” his upscale bar and grill filled with seven feet of water, part of the roof ripped off, and his brand new, $20,000 kitchen was completely destroyed.

Madden has spent the past year-and-a-half trying to apply for various state and federal grants and loans, but despite being promised he’d receive all sorts of funding, that help has yet to arrive.

“They dangle these giant carrots out in front of you,” he said. “‘Do this, do that!’ You feel like you’re jumping through hoops. I feel like a circus animal, you know?” Despite all his efforts, he’s told it could take another nine months before any money appears.

Stories like his came fast and furious at a roundtable of struggling small-business owners convened yesterday by State Assembly Majority Leader Louis Greenwald (D-Vorhees). The informal gathering took place at a Highlands pizzeria and was a chance for people like Madden to vent their frustrations. It also served as a fact-finding mission for Greenwald, who’s been disturbed by accounts of problems and delays from applicants to the Stronger NJ Business Grant Program.

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The year-old program is run by the NJ Economic Development Authority, and it offers grants and forgivable loans of up to $50,000 per business location to cover Sandy-related expenses like equipment, furnishings, and construction.

But the program has come under criticism recently, amid reports that out of its $100 million budget, it’s so far approved spending only about $16 million to just 10 percent of the more than 3,300 businesses that originally opened applications.

Officials dispute those numbers, saying the 3,300 figure cited by critics includes at least 600 duplicate applications, and that many others were declined for various reasons or deemed ineligible. As of the December 31 deadline, they say they’ve identified just 1,549 valid applications, of which 345 have been approved for funding.

In a statement released to NJ Spotlight, EDA spokeswoman Virginia Pellerin noted that a complicated application process led many would-be grantees to complete their paperwork incorrectly. She said her agency has often had to seek additional information and documentation from business owners to move their applications forward, which has in turn slowed down the process dramatically.

She also said that the EDA had made changes to the process to make things easier for applicants, including adding additional business advisors to work on cases. “Since implementing these changes, more than 100 grants have been approved, which represents 30 percent of the total number of grants approves since the program launched in May,” the statement said.

Corinne Horowitz with the NJ Main Street Alliance sees things differently. Her group represents 1,400 small businesses and sole proprietors across the state and helped organize yesterday’s event. “This problem is greater than red tape and bureaucracy,” she said. “These are not isolated cases, but indicative of a much greater problem and mismanagement of the process.”

The horror stories shared by business leaders yesterday seemed to bear out those concerns. Person after person told of being switched from advisor to advisor in the program, getting inaccurate information, and being asked to submit the same documents on multiple occasions. Ravinder Valia — who runs a day spa in Hoboken — said she was required to turn in a copy of a lease agreement for her building, even though she owns it outright. Highlands bakery owner Giesela Smith was asked to re-send reams of documents because her original fax didn’t include the last page of her bank statement, which she said was blank.

“My sense is that there’s no urgency, that the government’s sort of waiting you out,” said Howard Ziperson, who co-owns Long Branch’s Breakwater Beach Club. “I feel like it’s their job to find reasons not to give out the money,” agreed another business owner. Others said they were tired of fighting for aid money and were on the verge of giving up.

Asked what he took away from the meeting, Assemblyman Greenwald said he was disappointed that the State of New Jersey appeared to have failed these people.

“There are some fundamental breakdowns here of government not understanding how small businesses operate,” he said, noting the trouble several owners had faced getting reimbursed for repairs they did when they were unable to hold off any longer from re-opening their businesses. “If these businesses waited 18 months, they’d be out of business,” he said, adding that the most difficult part for many business owners was the uncertainty they faced.

While he doesn’t currently intend to hold hearings on the matter, he said he does plan to discuss the problem with the EDA at length to try to speed up the process for those still waiting for help. He also said he’d encourage the department to open remote sites around the state to deal with business owners face to face.

“This isn’t about trying to point fingers,” he said. “It’s about trying to help the people that are here today get the funding that they need to move on with their lives.”


Scott Gurian is the Sandy Recovery Writer for NJ Spotlight, an independent online news service on issues critical to New Jersey, which makes its in-depth reporting available to NewsWorks.

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