A grant program designed to help small ground-floor stores and restaurants beleaguered by roadwork and other disruptive public projects is not enough to save many Downtown businesses, according to a Community Board 1 committee that has been looking into the plight of those retailers.

Since March 2008, the Lower Manhattan Development Corporation has doled out almost $1 million of a $5 million grant program for businesses forced to suffer lengthy closures on many Downtown streets. About 60 businesses, most of them on construction-plagued blocks of Fulton Street, Park Place and John Street, have received as much as $25,000 each to offset the impact of the street closures.

But the rules of the grant program exclude some Downtown streets that have endured lengthy closures and chaotic construction. Citing what he says is an accelerating trend in failing businesses, Ro Sheffe, chairman of CB1’s Financial District Committee, says the LMDC must loosen the eligibility requirements for the funds, and fast.

“This is our absolute top priority right now,” said Sheffe. “A lot of these places are teetering on the brink of extinction.”

Businesses are eligible for up to $25,000 in federal assistance if they have fewer than 50 employees, their taxes are paid and they are on a block where a public construction project was underway on or after July 1, 2007.

In a resolution passed on April 28, the board asked LMDC to push back the elegibility date by a year and a half, and double the program’s cap to $50,000. The board also wants businesses with tax arrears to be eligible.

“We want to get this money into the hands of as many businesses in Lower Manhattan as possible,” LMDC spokesman Michael Murphy told the Trib. “Unfortunately, whenever you put together a program like this, there are always going to be people left out.”

In interviews, business owners who received grant money agreed that the help—averaging about $16,000—buys time but can’t be expected to save a failing store or restaurant.

Wilson Silva, owner of Nu Way shoe repair shop on John Street, said the grant money he received—he declined to say how much—paid off his rent and property taxes. “But if your business is in real trouble, [the grant] would probably not be the thing that saves it.”

“It’s less than two months’ rent,” said Mark Weng, owner of the Foot Mart sneaker store on Fulton Street and a $22,000 beneficiary of the program.
On Maiden Lane, shop owners struggled for more than 18 months with road construction, including an exploding electrical transformer in February 2007. The construction ended in June 2007, less than a month before the LMDC’s starting date for its grant program. Last month, two Maiden Lane businesses closed. Klatch, a coffee shop, was evicted after falling thousands of dollars behind on rent. Owner Pamela Chmiel said she was just recovering from the construction when the recession hit.

Standing outside her padlocked business, Chmiel said an LMDC grant could have paid her back rent and kept her afloat until summer, when she expected business to pick up.

“If I could just get that grant, and get caught up, we could make it,” she said. “I could at least go back to the landlord and try to work something out.”
Having distributed less than one-fifth of the program’s dollars, Murphy said the LMDC was exploring ways to broaden the qualifications, including pushing the starting date back to January 2007. The agency is also considering doubling the amount of money available per square foot of rental space, from $2.50 to $5. But the program, he said, was never meant to be a rescue package for businesses hurt by the recession.

“This is not a stimulus program, it’s not bailout money,” Murphy said.

Sheffe, who met several times last month with LMDC officials, said he was encouraged by the prospect of an expanded relief program, but disheartened that it could take months to implement.

“A lot of these businesses don’t have months,” Sheffe said. “They have days.”