U.S. Disaster Funds Offered to Beleaguered Redondo Beach Businesses

For the first time since a series of disasters struck Redondo Beach’s King Harbor this year, public funding has been made available to damaged businesses.

Since January, the harbor has been hit by three major storms and a fire on the Redondo Beach Pier, which together caused $26.5 million in damages.

The federal Small Business Administration announced this week that low-interest loans are available for businesses hurt by the January storm and the pier fire in May. The program offers loans up to $500,000 to be repaid within 30 years at 4% interest, said William E. Leggiero Jr., disaster loan specialist for the agency.

Small Business Administration representatives will hold a public meeting Wednesday at 7 p.m. in City Council chambers to discuss the loans and distribute applications. A representative will also be available at City Hall next Thursday to assist business owners.

Asked how much money will be available, Leggiero said: “As much as is needed.”

The agency has not been able to issue any disaster declarations--or grant any loans--for more than a month. Although it had loan money, its manpower budget was exhausted and there was no staff available to inspect disaster sites, Leggiero said.

Congress approved an emergency funding bill last week, giving the agency an additional $15 million for operating expenses. On Tuesday, Small Business Administrator James Abdnor issued the disaster declaration for Redondo Beach.

To qualify for a low-interest loan, the applicant must prove that the business can repay the loan but cannot get a bank loan. The applicant also must prove that the business suffered economically as a result of the storm or fire, Leggiero said. Businesses need not have been physically damaged to qualify, he said.

The loan money can be used to pay salaries, the cost of relocating or advertising, Leggiero said, but not for fixed assets such as construction, machinery or inventory.

Because of that restriction, Bob Resnick, Redondo Pier Assn. president, said of the assistance: “I’d be surprised if it’s widely utilized.” Business owners who really need the assistance, he said, are least able to assume further debt.

He said business on the pier has decreased 20% to 30%. “Any assistance is helpful,” he said, “but what the merchants really need to see is the public coming back in greater numbers.”

Meanwhile, city officials continue to discuss whether the damaged parts of the pier should be rebuilt.

City Atty. Gordon Phillips has said the city is not contractually obligated to rebuild the pier, most of which is leased to private businesses.

The council, in a shift from its previous stance, indicated this week that it is likely to rebuild the pier and will make the decision itself. At a public hearing three weeks ago, the council had indicated it would let voters decide.