SBA hit over loan response for Gulf

Development specialists from the Gulf Coast region yesterday said the response from the Small Business Administration in granting loans to small enterprises in the area has been woefully inadequate and will require federal legislation to force the agency to act in a timely fashion.

Of the more than 15,000 loan applications submitted to the SBA in the past 90 days, “only 773” have been processed, said Walter Isaacson, president of the Aspen Institute, an international-development policy and leadership think tank.

“The SBA has not been good, effective or creative. It has not pushed hard enough. It is not treating this as an emergency operation, and they need to,” Mr. Isaacson said. “We need the emergency disaster loan program to be juiced up to save the businesses that will die soon without loan money.”

The issue was touted as a top priority of the International Economic Development Council, which bills itself as “the world’s largest professional organization for economic development practitioners” with more than 4,500 members across the United States, as well as Canada, Europe, Australia, New Zealand, and other nations.

The group, which yesterday reviewed a draft action plan to rebuild the region during a forum hosted by the U.S. Chamber of Commerce, said it is looking for about $200 million in guaranteed loans to help businesses survive for the next six to 12 months.

Gulf Coast developers looking at the devastation agreed on five key priorities that all five states — Florida, Louisiana, Mississippi, Alabama and Texas — said were necessary for a successful recovery.

One provision in the legislative package calls on Congress to develop a grant program similar to the one used to rebuild New York after the September 11 terrorist attacks and “bridge” grants to aid people and businesses while victims await insurance payments from policies on their properties.

“We need Gulf opportunity zones, tax-exempt bonds, 9/11-style Liberty bonds and industrial-revenue bonds in the amount of $6 [billion] to $8 billion over the next 10 years,” said Mr. Isaacson, a former chairman and CEO of CNN and managing editor of Time magazine.

He said the state of Louisiana’s original predicted price tag of $250 billion for recovery was a mistake that scared congressmen away.

The plan also calls for a comprehensive hurricane-protection package to protect new properties to be built in populated and economically productive areas from Category 5 storms. Altering building codes and repairing the levees against such storms would be the primary focus, he said.

Mike Oliver, Louisiana’s secretary of economic development, said the states are considering removing the moratorium on off-shore drilling in the Outer Continental Shelf and altering the formula for oil and gas royalties so the Gulf states could generate about $20 billion in revenue over the next five to 10 years.

More funding from the Department of Housing and Urban Development was also a major priority. The group also called for additional tax relief in areas most devastated by the storms.