Love of Sea Has Meant Much Damage for Russian Businesses

Brighton Beach after Hurricane Sandy. (Photo via Flickr, Creative Commons License)

On November 24, two days after Thanksgiving, and a day after Black Friday, America celebrates Small Business Saturday.

On that day, the media calls upon everyone in the country to help small businesses by shopping at small local stores, groceries, coffee shops, boutiques, etc. and ignore big supermarkets, malls, and famous “brand” stores.

Russian businesses in New York faced the day with mixed feelings of bitterness and hope, pain and faith in the future. It had been almost a month after Hurricane Sandy, and many companies established by immigrants from the former Soviet Union had reopened and returned to business, but it’s still far from a full recovery.

Everyone has Advice

“It’s hard to imagine the level of damage our businesses have suffered,” said Alec Teytel, president of the Bensonhurst Business Club. “First of all, many of them are located in the areas worst hit by the hurricane – all because we, Russians, love to live and work close to the ocean. Secondly, local owners usually rent their spaces instead of buying them. That’s why they didn’t bother buying flood insurance. Equipment and appliances were not insured for many as well… So, our businesses are going to take a while to recover…”

Teytel added that many business associations and non-profit organizations offer advice about ways to recover. However, there are not many willing to provide the needed financial assistance.

Banks, in particular, are hesitant to give businesses relief (offering loans on favorable terms, for example), because they can’t predict when a particular business will bounce back (if it will at all), and pay back the money.

Healthy companies and business associations (like chambers of commerce) are able to raise funds to help small companies on the brink of bankruptcy, but not for bigger organizations, such as restaurants, as they need hundreds of thousands of dollars.

Plenty of Hurdles

Ari Kagan, the Democratic Leader for the 45th State Assembly District, agrees with Teytel. In his opinion, everyone suffered losses in the Russian neighborhoods in Brooklyn – from stores and restaurants to travel agencies, whose buses ended under water during the hurricane.

The recovery process is slow and has many hurdles: damaged appliances, spoiled goods, flooded or wet facilities, gas and electricity problems…

“Many business owners complain about insufficient help from some politicians,” says Kagan, and from insurance companies, which do whatever it takes not to pay businesses. “Of course, this is natural for the insurance industry, but you have to keep in mind it’s an emergency situation…”

According to Kagan, banks don’t play nice either. If a businessman has an unpaid loan, he cannot apply for a new one, or, if he can, not for a low-interest loan.

Landlords, for most part, are not helping either. They require that the rent be paid on time and the full amount. Plus, many businesses were looted after the hurricane. In addition, revenues are falling as most of their clients are locals, who are busy repairing their own properties, and don’t have money to spend.

If You Want it Done Right, do it Yourself

Despite all the hardships, many Russian businesses are getting back on track. So on Tuesday, November 20, Cherry Hill Market, a popular Russian grocery store, reopened its doors. On November 22, the legendary restaurant National in Brighton, had an official Thanksgiving Day celebration.

In the words of Yelena Makhnin, executive director of the Brighton Beach Business Improvement District, in “the capitol of Russian America,” 80% of the businesses are up and running. “Brighton comes alive,” Yelena says. “Of course, not everyone has been able to recover, especially restaurants, whose kitchens were in basements, which got flooded, and some areas still have no electricity. However, we are looking forward with optimism.”

Unfortunately, the optimism is mixed with disappointment, caused by different government and private organizations, not rushing to offer a hand to the victims. As Makhnin sorrowfully pointed out, many Brighton Beach businessmen came to the conclusion that no one would help you but yourself.

“All politicians of any level like to repeat that small businesses – are the core, the backbone of America, however, in hard times nobody is willing to support this ‘core,'” says Yelena. “Nobody provides real financial help, businesses in emergencies are not offered grants, only loans, which are hard to get, as credit story, income level, and other factors still hold the process back. Quickly, many businessmen came to the conclusion that government is not a mother, but a stepmother.”

Big Brother Comes to Help?

In response to such sentiments, a meeting was held on November 21. On that day, the Federal Emergency Management Agency (FEMA), the U.S. Small Business Administration (SBA) and the Department of Small Business Services of New York spoke to local businessmen. Among the attendees were Congressman Hakeem Jeffries, the main organizer, Michael Nelson, Chairman of the New York City Council’s Waterfront Committee, and other politicians.

The goal of the meeting was to support Brighton Beach businesses, and, in particular, provide business owners with information about the steps needed to receive financial help from the federal and city agencies.

It turned out that the City of New York together with the leaders of famous Goldman Sachs bank allocated $10 million in emergency loans for businesses victims of Hurricane Sandy. Through this program, directed by NYC Business Solutions and New York Business Development Corporation (NYBDC), victims can obtain loans of up to $25,000. The first six months of the loan is interest-free, followed by two years at a 1 percent interest rate.

For more information you can call 311, and ask about “NYC Business Emergency Loan,” or go online to the site nyc.gov/contactnycbiz.

In order to receive help from the federal government, it’s necessary to be registered with FEMA first, said representatives from FEMA and SBA, Kenneth Higginbotham and Andre Ledgister. To register, call 1-800-621-FEMA (1-800-621-3362), or go to www.disasterassistance.gov. Another option is to go to one of the Disaster Recovery Centers, sponsored by the agency. The nearest one to Brighton Beach is located inside of the Jewish Community Center Shorefront Y.

After registering, you can apply for loans from the Small Business Administration. Economic Injury Disaster Loan are available for up to $2 million for 30 years with a 4 percent interest rate. Makhnin, who attended the meeting, specified that SBA makes all decisions on loans individually, and that’s why it’s impossible to give the same advice to everyone.

“That’s why I don’t advise business people to seek information from lawyers, accountants, and so on,” added Makhnin. “You need to address representatives from SBA directly, the same way that FEMA representatives listen to anyone at the Disaster Recovery Center at Shorefront Y. If a businessperson doesn’t speak English well, this is not a problem, he will be helped through a translator. And only after that, if you still have questions about documents that you need to bring with you to SBA, you can seek the help of a lawyer.”

At the end, Makhnin expressed confidence that Russian businesses will overcome any obstacle on their road to recovery, and will continue to please the community with their successes. “We have millions of problems, but we aren’t crying and complaining, we are working,” she said. “Come visit us!”

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