$68M for Small Business in Louisiana

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FOR IMMEDIATE RELEASE:
March 14, 2007

MEDIA CONTACT:
Natalie WyethLouisiana Recovery Authority
(225) 342-1790
natalie.wyeth@la.gov
LRA Announces Plans to Push Additional $68 Million to Small Businesses
Board Also Approves $20 Million in Aid for Fisheries

BATON ROUGE, La. (March 14, 2007) – The Louisiana Recovery Authority (LRA) board of directors today approved a plan to push an additional $68 million in Community Development Block Grants (CDBG) funds to small businesses trying to recover from hurricanes Katrina and Rita. More than 81,000 businesses were initially affected by the storms, while more than 18,000 are still out of business.

“Perhaps no sector suffered more than the small businesses that are the underpinning of Louisiana’s economy,” said Governor Blanco. “Many small businesses that survived the storms have been hanging on by a shoestring – or even less. They struggle on a daily basis with reduced operating capital, higher insurance and expenses, and the reduced cash flow that is a byproduct of an eroded customer base. This plan is a smart transaction that moves funding from a program that has been underutilized, to a program where the need is great,” said Governor Blanco.
The proposal will increase the available funding to the Small Firm Loan and Grant program from $143 million to $211 million to allow additional businesses to access important low-cost financing in the form of loans and grants. The funding transfer was designed to allow businesses with great need that were excluded from the first round of the loan and grant program due to insufficient funds.

“This remarkably popular, badly needed program has been met with great success,” said LRA Economic and Workforce Development Chairman Matt Stuller. “These grants are the difference between survival and failure. It’s an important shot in the arm and provides business owners with an opportunity for success.”

To date, the Small Firm Loan and Grant program has received more than 5,600 grant applications and more than 1,000 loan applications. Should the amendment not require changes resulting from the public comment period, the LRA Board agreed to move the proposal directly to the Governor and the Louisiana Legislature for their review and approval. Should they pass the plan, it would move to the US Department of Housing and Urban Development (HUD) for final approval.

Before the morning session concluded, the board voted for final approval on a program to allocate $20 million in CDBG funds to help restore the fishing industry by investing in fisheries infrastructure and providing aid directly to fishermen. The aid package, developed with input from the fishing industry, will be available for repairing, improving, acquiring, and/or constructing infrastructure, returning fishing boats to service and providing funds for loans and grants to fishermen.

The plan recommends allocating $15 million to improve and expand infrastructure critical to the commercial and recreational fisheries industries, including docks, icehouses, boat launches, processing and shipping facilities, boats and other infrastructure. It also recommends $5 million to provide direct aid to fishermen through the existing Small Firm Loan and Grant program.
“We are going to cover the fishing industry,” said LRA Board Member Rene Cross. “Its unique place in our culture and its role in our economy cannot be denied. It is our hope that this program will take care of the problems that exist there.”

It is estimated that the fishing industry lost $582 million in damage and lost revenues following the hurricanes. The vast majority of that damage was sustained by privately-owned equipment and infrastructure, which are not eligible for the Federal Emergency Management Agency’s (FEMA) Public Assistance. The measure now moves to the Louisiana Legislature and HUD for final approval.

During the afternoon session, the board heard an update from the state’s Office of Community Development (OCD) and the state’s contractor, ICF International, on the Road Home homeowner assistance program.

Board members pressed OCD and ICF to continue their efforts to streamline the program, increase the number of closings and improve resolution for homeowners dissatisfied with their award calculations.

As of today, the program has received more than 115,000 applications and held close to 87,000 in-person appointments. More than 40,000 benefit option letters have been sent to homeowners with grants averaging close to $81,000 and totaling $3.87 billion in benefits. Out of the more than 23,000 homeowners that have returned their award letters, nearly 20,000 have chosen to stay and rebuild in Louisiana.

Before adjourning, the board heard from the state’s new Superintendent of Education Paul Pastorek who outlined his commitment to building a world class education system in New Orleans.

“I will not be able to do this alone,” said Pastorek. “I need every resource I can get – from parents and communities to nonprofit organizations – to make this vision a reality.”

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