Few businesses apply for aid after I-35W bridge collapse

Cleaners in trouble
Gophers Cleaners owner Debbie Allen, left, and her son Paul. Their business sits across the street from the collapsed 35W bridge. Shortly after the collapse, Allen said her business had dropped off by 50 percent.
MPR Photo/Annie Baxter

(AP) - A low-interest loan program for businesses affected by the Interstate 35W bridge collapse had just eight applications through the end of 2007.

Some officials say they're surprised by the limited response to the program, which was made possible after President Bush declared the Aug. 1 collapse a federal disaster.

The response also contrasts with state officials' reaction to the collapse, saying the rerouting of highway traffic would take a heavy toll on local businesses.

"Not one of our more active disasters of the year," said Carl Sherrill, an official with the federal Small Business Administration.

The loan program runs through May and covers eligible businesses in eight metro area counties.

"Not one of our more active disasters of the year."

Four of the eight applicants were rejected because they couldn't document an economic loss or demonstrate an ability to repay a loan.

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Harry's Food and Cocktails, a downtown Minneapolis restaurant that opened three weeks before the collapse, is the only business so far to receive a low-interest SBA loan.

Sherrill said the response was similar to a steam pipe explosion in Manhattan in July. Like the bridge collapse, the incident raised concerns about the nation's aging infrastructure. But it didn't lead to many federal loans for businesses.

In Minneapolis, SBA workers moved to another building closer to the collapsed bridge after initially getting few responses at their downtown office.

"We didn't get any calls on it, and the city of Minneapolis was out beating the bushes" to try to find applicants, said Judy Rue, Hennepin County's deputy emergency preparedness director.

The response is especially surprising given the worry state officials expressed in August over what the bridge collapse would do to the state's economy.

Gov. Tim Pawlenty said the interruption of commerce on the Mississippi River and the rerouting of traffic had caused "significant economic impact" on local businesses.

The state Department of Employment and Economic Development predicted early on that Minnesota's economy would lose $60 million by the end of 2008, in addition to road-user costs that would reach $400,000 per day.

"We just haven't heard or seen a significant amount of businesses that have claimed or noted" sales declines, said Bob Isaacson, the department's director of communications, analysis and research.

But some business owners say the applications for low-interest loans aren't necessarily a good indicator of how well business is going.

Ed Hilbrich, owner of Opposable Thumbs Books on Johnson Street in northeast Minneapolis, will close his store Jan. 31.

"It's just not economically viable," said Hilbrich, who said the bridge collapse has led to a 40 percent decrease in revenue.

Low-interest loans didn't interest Hilbrich, because he said he can't afford to "do the American thing and pile debt on top of debt."

John Gifford, who owns a Dunn Bros. coffee shop near the collapsed bridge, did apply for an SBA loan but was turned down. Federal officials told him they weren't certain Gifford's business would be able to repay the loan, he said.

Gifford saw his business increase in the days immediately after the collapse, perhaps because of all the media attention.

"Then the media left, and the weekend sightseers left," he said. "It's been pretty tough."

(Copyright 2008 by The Associated Press. All Rights Reserved.)