Jersey Shore businesses still waiting for Sandy loans

SEA BRIGHT, N.J. – Restaurateur Tim McLoone wanted to rebuild and reopen his landmark Rum Runner restaurant by sometime next summer — but now he fears he may have to halt construction because he has not received money promised through the Stronger NJ Business Loan Program.

"Quite honestly, we can't go much further. If we don't get this solved soon, we're going to have to stop," he said. "If we can keep going, we might get a piece of next summer. We haven't been open in two summers, and to think we might miss another."

But McLoone is not the only one stuck in rebuilding purgatory. Not one of the businesses approved for the low-interest Stronger NJ loans have received a dime.

In all, the New Jersey Economic Development Authority approved 12 loans, for a total of $17.5 million, so that Sandy-flooded businesses could get the financing needed to rebuild. About half of those loans are waiting for environmental approvals.

But other business owners — like McLoone and Gigi Liaguno-Dorr, who hopes to reopen the waterfront bar and restaurant Jakeabob's Bay in Union Beach — have the approvals, but don't have the cash.

In Liaguno-Dorr's case, she got the blessing of the state Department of Environmental Protection in July, two months after she was approved for the loan.

"I kept saying if we could get (construction) going in September then we'll be good for the (summer) season," she said. "Well, I'm not going to be good for the season."

Missing a third consecutive summer starts to change the equation for Liaguno-Dorr on whether Jakeabob's is still a viable opportunity for her.

"If this is how it's going to end," Liaguno-Dorr said, starting to choke up. "We can't accept that," her fiancee, Wally Van Orden, interrupted.

Unlike Dorr, McLoone has been able to start construction using other sources of money, but those are almost exhausted.

"We have not received anything either," said McLoone. "We're in the same boat."

A spokeswoman for the NJEDA said the state has been prioritizing NJ Stronger working-capital loans, which don't have the same rigorous demands from the federal government, which is providing the funds. Those relatively relaxed standards help the money move quicker — about half of the working-capital loans, or $25 million, have been paid out at least in part, according to the NJEDA.

Indeed, Jakeabob's was approved for nearly $300,000 for working capital, some of which Liaguno-Dorr used as down payments for engineers and surveyors, and some of which she used to survive without any income from her business. The $300,000 is not enough to break ground.

The loan program is paid for by Sandy disaster aid that flows through the U.S. Department of Housing and Urban Development, which is responsible for making sure the money is spent appropriately — a key concern since the rampant misuse of taxpayer money after Hurricane Katrina in 2005, said Holly Leicht, the regional administrator for HUD in New York and New Jersey.

Federal law requires meticulous environmental reviews and a "cost reasonableness review," which takes a line-by-line look at the construction budget. Combined, those two tasks can take months to complete.

But what if in trying to ensure the loan money is going to be spent properly, the process becomes so sluggish that the businesses you intend to save end up withering on the vine?

"It's not a perfect system," Leicht told the Asbury Park Press. "It's not easy to get this money out the door quickly."

Leicht said she doesn't want to sound like she is making excuses, but her agency isn't built for the expedited response.

"Our money isn't as quick as FEMA's," she said, before pledging to continue working with New Jersey on ways to speed it up.

Leicht said that between the time it takes to gain congressional approval, and develop and implement programs, it's about 18 months after a disaster before loans can even be approved, which is pretty close to Dorr's time line.