What about insurance? Many business owners had some; a few had business-interruption policies. But even among the insured, many have been paid only a small fraction of what they think they are owed; others have not yet received anything, despite having filed their claims months ago. Dealing with insurance companies is like applying for government grant and loan programs in that it entails endless amounts of paperwork. Owners have spent hours and days filling out forms and trying to track down documentation to support their claims. For those whose offices or stores were completely destroyed by the Twin Towers' collapse, the task is nearly impossible; many didn't have duplicate financial records or backup computer disks in a separate, safe location. Pehr had to try to reconstruct from memory his inventory of thousands of keys. Without records to prove their claims, company owners find themselves arguing with the insurance companies about the true value of what was lost. Chapman estimates that she lost more than $1 million in physical and intellectual property alone. Her insurance company has offered her $25,000 for business interruption. "I don't get the feeling I can have a high-level discussion about intellectual property with my adjuster," she says, sighing in resignation.
But perhaps the worst part of the whole ordeal, many business owners say, has been the continual questioning of their motives by those who sit on the other side of the desk, processing their claims and applications. Several report being treated as if they're asking for an undeserved handout or trying to cheat the system. "I've never had to give so much documentation in my life," an exasperated Steve Golish told two investigators from the General Accounting Office who were attending a public meeting to listen to complaints. Golish is a financial executive whose company was on the 87th floor of One World Trade Center. "They doubted I was there," he said. "They questioned the photo on my Web site that showed me in front of the World Trade Center. You have no idea how humiliating this whole process has been. Day in, day out, you get insulted."
Why isn't more government assistance reaching this group? Part of the problem lies in the way the programs were conceived. When Congress enacted legislation to help New York, its emphasis was on economic recovery -- on moving forward, not on covering losses. As a result, the law offers generous subsidies to companies that lease space downtown or hire new employees there; it also provides for accelerated depreciation schedules and higher tax deductions for companies that move into the area or expand operations that were already there. But if a business stays in the same place and isn't expanding, assistance is limited. "This was set up principally as a rebuilding and revitalization effort, as opposed to a compensation effort," says Carl Weisbrod, president of the Alliance for Downtown New York, a business-advocacy group. "Clearly, there wasn't enough money to fully satisfy the damages that occurred."
To be fair, many small businesses have received some financial aid. The Department of Housing and Urban Development (HUD), working through city and state agencies, had distributed $203 million to 7,172 small businesses in Lower Manhattan as of late June. And 29% of those companies are in the Ground Zero area. But Jeannine Chanes, a lawyer at Fried & Epstein who is advising a group of area businesses that have banded together to seek more help, believes that most of that money must have ended up with larger companies. About half of the 300 companies in the group she works with, called From the Ground Up, have not received any financial assistance at all. The other half, she says, have received about $4 million in grants, a pittance relative to their losses. "Those who need it the most have received the least," says Chanes.
The major grant program that small businesses near Ground Zero are eligible for is the WTC Business Recovery Grant Program. Essentially, all businesses south of 14th Street are entitled to receive some portion of their 2000 revenues, either 2% to 4% of sales or 2 to 10 days' worth of revenues. The closer the business was to Ground Zero, the higher the percentage of sales or the number of days it can claim. On the surface, the formula sounds fair. But consider a business that is located near 14th Street, many blocks away from Ground Zero, that was closed for only 5 days and received a grant equal to 2 days' sales. That company fared far better in comparison to its losses than a business located closer to Ground Zero that was closed for seven months but received funding equal to just 10 days' sales. The group From the Ground Up has calculated that businesses that are located immediately south of 14th Street received government aid equal to 67% of their losses, while companies below Canal Street had just 6.5% of their losses covered. And the percentage grows smaller every day that their stores remain closed, because the losses continue to mount.
Small companies could also apply for the Small Firm Attraction and Retention Grant program, which, as Monica Anderson can attest, was useless to many of the mom-and-pop stores near Ground Zero. After months of listening to complaints about the program's 10-employee minimum, HUD finally agreed to lower the minimum to one employee. But by late June, nine months after the disaster, the agency's decision was still pending final approval. That kind of delay serves only to intensify the bitterness many small companies feel toward the government. With every additional month that they're forced to wait for help, more face the prospect of closing down permanently.
