As rebuilding efforts falter, Hadley fire victims find help elusive
HADLEY — Hai Cheng stands in a spot that was once home to his niche grocery store on Route 9 in Hadley and wonders if he’ll ever start another business again.
His livelihood destroyed eight months ago in a devastating fire that ruined a dozen small businesses at 206 Russell St., Cheng has found it almost impossible to restart his International Food Market.
“To deal with our loss and think about having to rebuild is too much,” Cheng said this week at the former Norwottuck Shoppes Plaza that was once a teeming hub for small shops like his. “It’s overwhelming.”
After months of searching, Cheng still cannot find affordable space to lease in the area. His insurance money has largely gone to pay his business-related obligations, he says. Apart from receiving $4,200 from a community-driven fire relief fund in January — for which he is grateful, he notes — his efforts to receive long-term financial assistance have been a struggle, in particular a U.S. Small Business Administration loan program that state officials touted as a life raft late last year.
Cheng is not alone, as some former shopkeepers say they have been daunted by the prospect of applying for the federal help, while others have said they were told they would not qualify.
Michael Lampton, an SBA spokesman, said he does not understand why the business owners encountered such obstacles. He said the federal agency does not generally turn down applicants unless they cannot show repayment ability on loans.
“The only way we would have denied them is if they didn’t show they had repayment ability or they didn’t have credit,” he said.
Richard Daigle, another spokesman from the agency’s Disaster Field Operations Center in Georgia, said no Norwottuck Shoppes tenants have submitted SBA applications. Daigle, whose territory covers the eastern United States, said the SBA loans can offer help, and that shopkeepers should apply even if they think they are not creditworthy. There is no obligation to take the loans if one does qualify and if applicants are rejected, they can appeal those loan decisions, he said.
“We want people to apply regardless of the current state of their business,” Daigle said. “Don’t disqualify yourself by not even applying.”
Gov. Deval Patrick helped make the loans available in December 2013 when he submitted a disaster declaration for the Oct. 27 fire. The blaze started in a laundromat, but the state fire marshal’s office concluded last month that its cause may never be known.
In a joint statement about a month after the fire, Patrick and U.S. Rep. James McGovern said the federal assistance would ensure recovery and allow these businesses to “rebuild stronger than before.”
“It gave us false hope,” Cheng said of the SBA loans. “None of the businesses can access these funds. It was a surprising turn of events for us.”
He said he has inquired about the low-interest economic injury loans from the SBA Business, but was told he wouldn’t qualify.
Other Norwottuck Shoppes business owners who inquired about the SBA loans told the Gazette that they, too, were informed they would not qualify for federal loan assistance.
“From what I heard, our situation does not qualify for restarting a business,” said Mung Pham, owner of the former Banh Mi Saigon. a Vietnamese restaurant that burned down at the plaza. “In the beginning, everybody thought we would qualify to get loans to restart the business. We have to go through a bank at the end of everything.”
Like Cheng, Mung Pham is still searching for a place to restart his family business. Since the fire, he has been taking care of children while his wife helps support the family as a nail technician, he said.
He said he is trying to reopen his business in one of a number of now-vacant restaurant spaces. He said he believes his family will persevere.
“It’s difficult and challenging, but it’s nothing we can’t get through,” Mung Pham said.
Daigle, of the SBA, said that while no businesses have applied to date, they still can if they choose — the deadline is Aug. 26. Businesses can qualify for up to $2 million through the loan program with rates at 4 percent and terms of up to 30 years.
Apart from the questions of credit, Lampton of the SBA, said the working capital loans in question are open to the group of former small business owners trying to recover in Hadley. He encouraged them to apply.
But Cheng said he was informed in talking with SBA employees, in Springfield and in Georgia, that he must rebuild his business at the site of the fire or in a building that is under repair. He cannot use the money to relocate his business, he said he was told.
“What else can I say? It’s the end of the road for us regarding the SBA,” Cheng said. “It had to be in the same location.”
Lampton said he was not aware of any such restrictions on the loans.
Daigle said there may be many reasons that none of the small businesses in Hadley have applied for the economic injury disaster loans in Hadley.
“It may be that people weren’t interested in applying or had insurance,” he said. “It could be various factors. It’s hard to measure.”
Other help available
Meanwhile, Tony Maroulis, the former director of the Amherst Area Chamber of Commerce who helped coordinate an earlier fire relief fund effort, said he believes many of the small businesses trying to get off the ground again struggle because they have previously run their businesses with non-traditional funding sources and require technical assistance to develop formal business plans.
“It really is a lot, I think, about business plans for them,” Maroulis said. “The paperwork is daunting. No matter what they do, they’re going to go through paperwork.”
Common Capital, formerly known as the Western Massachusetts Enterprise Fund, has worked with some of the fire victims as they try to rebuild their businesses. Based at 4 Open Square Way in Holyoke, the organization provides financing, business consulting and borrower education, among other programs.
Jorge Sosa, owner of the former Mi Tierra Mexican restaurant, received a loan through Common Capital to help buy a tortilla-making machine, which went into use three weeks ago at his small commercial kitchen in Springfield. He said his family is reinventing its business by making and distributing tortillas in the region and using locally grown ingredients to do so.
“We’re trying to get back on our feet,” Sosa said. “The fire took a lot ... many years of work. It has been really, really difficult for all of us.”
Like Hai Cheng and Mung Pham, Sosa said that when he contacted the SBA, he also was informed that he would not qualify for their economic injury loan program. He said the fire came at the worst possible time as he and his wife, Dora Saravia, had just invested in a large, $72,000 truck, the payments on which continue, while their insurance company still hasn’t reimbursed them for any damages.
Sosa said he was told by a counselor at the SBA’s Springfield offices that only the Thatcher family, as owners of the plaza, would qualify for the SBA loans to rebuild at the site.
SBA spokesmen who talked to the Gazette said that doesn’t sound accurate to them.
Sosa said he doesn’t blame the local and state officials who tried to help the small businesses in the wake of the fire. He also said his family continues to explore opportunities to start a new restaurant some day and noted that he is thankful to the area’s residents and local organizations who donated to the fire relief fund.
“I don’t know how to say thank you,” Sosa said. “Thank you sounds too simple.”
Property for sale
Diana Thatcher of Colrain, whose husband, Justin Thatcher, managed the plaza and whose in-laws own it, said this week that her family did not seek the SBA loan assistance, nor were they included in the fire relief efforts that were targeted to the local business owners.
“There were a lot of coordinated relief efforts directed to the insured and uninsured,” Diana Thatcher said. “For some reason, the leadership involved in that didn’t seem to recognize or acknowledge that it was my in-laws’ family business that was gone as well.”
“We weren’t very much involved in the recovery effort,” she added.
Thatcher attributes the difficulties some of the small business owners are experiencing with starting anew to working with a bureaucracy.
She said Justin Thatcher and his father, David Thatcher, who owns the property, are “true believers in the entrepreneurial spirit and the American dream.”
“They weren’t into red tape and hurdles to start a business,” she said. “They weren’t demanding a business plan the size of a phone book.”
In a new development related to the property, the Thatchers had the 1-acre parcel at 206 Russell St. listed on the market Thursday for $685,000. The property’s sale is being handled by real estate agent Patricia Patenaude of the Jones Group — with one exception. The Thatchers have opened the door to allow any of the former business owners, individually or collectively, who leased space with them to negotiate with them directly if they are interested in buying the property.
“That’s something we’d like to get out to the business owners,” Thatcher said. “If anyone is able to, I think that is the outcome we would most like to see.”
Others have reopened
Some business owners at the plaza have fared better than others. At least three businesses, Greggory’s Pastry Shop, Hadley Dry Cleaners and the Chinese Kung Fu Wu Shu Academy, have reopened at a nearby plaza on Route 9. At an interview at his shop this week, Hak Jang, owner of the dry cleaners, said he is still trying to rebuild his clientele and was grateful for the local support he’s received.
Other shopkeepers are working with clients from their homes and just trying to make ends meet, such as Joe Cox, co-owner of the burned-down Mohawk Revenge tattoo parlor. Cox, the father of a young child, said he struggled mightily over the winter when he learned he could not qualify for home-heating assistance even though he lost his business and income and had no insurance. He said he chose not to apply for the SBA loans because it seemed like an ordeal.
“I just figured if the state wanted to help people out, there should be less bureaucracy in it,” Cox said. “The state helps people out that take advantage of it. If you’re in the middle class, you’re screwed. I have a 2-year-old and we couldn’t even get fuel assistance.”
Disappointed with the local job market and taxes and rents that he says are too high, Cox said he’s leaving Massachusetts for Florida.
“If you work hard you get stiffed and you’re on your own,” he said. “We’re moving out of state. We’ll take our investments somewhere else.”
Dan Crowley can be reached at email@example.com.