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Small business owners: Stronger NJ grant process not working

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Photo: Assembly Majority Leader Lou Greenwald (D-Voorhees) speaks with small business owners Monday in Highlands.
Photo: Assembly Majority Leader Lou Greenwald (D-Voorhees) speaks with small business owners Monday in Highlands. - (ANDREW GEORGE)

In its storefront window visible from Bay Avenue in Highlands, Francesco’s Italian Restaurant proudly displays that it is currently celebrating 30 years in business.

But for owner Giorgio Migliaccio, this was supposed to be the backup plan.

Migliaccio said he sold the business sometime before Hurricane Sandy hit with the plan of retiring and drawing income from the property as a landlord. But when the storm came and went, so too did his tenants.

Seeking help, he first went to FEMA, who then directed him to go to the U.S. Small Business Administration, and eventually ended up looking for a Stronger NJ Business Grant through the state Economic Development Authority.

Mounds of paperwork later, Migliaccio said there was nothing left to do but take money out of his retirement plan, pour it back into the business and open up shop.

“This is my retirement plan,” Migliaccio says now. “I can’t give it up.”

On Monday morning, several other small business owners from Long Beach Island to Hoboken joined Migliaccio at his restaurant in order to voice their frustrations with the Stronger NJ Business Grant Program to Assembly Majority Leader Lou Greenwald (D-Voorhees).

The group that organized the roundtable event, the New Jersey Main Street Alliance, is calling for an investigation into the EDA’s handling of the federal funds used for the Stronger NJ program, which was set up to offer recovery grants to small businesses and non-profit organizations that experienced a minimum of $5,000 in damage from Sandy.

But the NJ-MSA points out that despite the program having $100 million already approved for spending, it has doled out just roughly $16.23 million on 334 grants as of the end of March. That’s in response to over 3,300 total applications for grants, the NJ-MSA says.

“It’s more than red tape,” NJ-MSA business representative Corinne Horowitz said. “It’s more than bureaucracy. It’s mismanagement.”

Furthering the NJ-MSA’s frustrations, Gov. Chris Christie noted at a town hall last month that demand for the grants has been below expectations.

Greenwald told small business owners that he’s going to speak to the EDA about opening a mobile or satellite office near them, stressing that he feels an on-site facilitator could help speed-up the application process.

A common complaint of the small business owners was that they have been told their applications were either halted or stalled due to federal requirements getting in the way.

Greenwald noted that while the process may be burdensome, it is a problem that is “becoming an excuse.”

“We are done making excuses,” Greenwald said.

Greenwald wouldn’t go as far as to say an investigation needs to be launched into the EDA’s handling of the funds, as the NJ-MSA is calling for, but added that the meeting wouldn’t be the last of the discussion.

“We’re going to get to the bottom of it, one way or the other,” Greenwald said.

EDA spokesperson Virginia Pellerin contends that as of the Dec. 31 deadline, just 1,549 grant applications were officially submitted and are actively being reviewed for eligibility. To date, some 345 grants have been approved for a total of $16.9 million and roughly 150 applications have been denied.

According to Pellerin, more applications were started just prior to the deadline and since the program opened last May, 660 applications were dismissed for being duplicates, were declined for “very clear cut reasons as defined by HUD” or were tossed after the applicants withdrew them from consideration.

Most of the applications that have been declined are a result of the applicant’s inability to meet one or more of the program’s minimum eligibility requirements, Pellerin said.

Because of federal government regulations and the complexity of the application, the process requires a lot of back and forth between the EDA and small business owners. Applications are returned as “incomplete” 99 percent of the time, Pellerin said.

Pellerin says the number of grant approvals has recently climbed due to the implementation of a “team approach” to the application review process and a reduction in required documentation.

Also, the EDA has noted that initial response to the program was slow due to its May launch-date when shore area businesses were just opening up for the summer season. As a result, the EDA says it saw an uptick in applications after Labor Day.

“The EDA’s goal is to move these applications forward and get help to all eligible businesses as quickly as possible,” Pellerin said Monday. “We are certain that advocates for small businesses share our commitment to assisting these businesses, while also ensuring the integrity of taxpayer dollars.

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Andrew George

Andrew George

Andrew George covers the Statehouse from NJBIZ's Trenton bureau. Born and raised in N.J., Andrew has also spent time as a reporter in D.C., Texas and Pa. His email is andrewg@njbiz.com and he is @AndrGeorge on Twitter.

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