Westgate fire victims eligible to apply for low cost SBA loans

John Howell
Posted 4/9/15

Fred Wagner was wearing his blue SBA jacket yesterday morning at the Warwick Public Library.

It was casual attire, although it was hard not to miss the enameled pins that festooned the straps to …

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Westgate fire victims eligible to apply for low cost SBA loans

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Fred Wagner was wearing his blue SBA jacket yesterday morning at the Warwick Public Library.

It was casual attire, although it was hard not to miss the enameled pins that festooned the straps to his nametag. The pins were from states and municipalities across the country, all places where he had been sent to respond to a disaster.

Wagner, who is a field operations manager for Small Business Administration, could have dressed in a suit and tie and the two customer service representatives who accompanied him could have worn business attire. But Janice Byrd and Sheila Brown also wore the loose fitting blue jackets.

“We’re not scary,” said Wagner.

More than anything, Wagner wants the victims of the Westgate Condominium fire on March 11, which includes condo owners, the condo association and renters, to come by and chat. Those conversations could result in low-cost loans – with funds becoming available within weeks – of up to $200,000 for condo owners to replace their lost property and $40,000 for the replacement of personal property. As the association is considered a business, the SBA can make loans up to $2 million.

SBA Administrator Maria Contreras-Sweet announced Tuesday the loans are being made available in response to a letter from Gov. Gina M. Raimondo on March 31 requesting a disaster declaration by the SBA.

“The SBA is strongly committed to providing the people of Rhode Island with the most effective and customer-focused response possible to assist businesses of all sizes, homeowners and renters with federal disaster loans,” Contreras-Sweet said in a statement. “Getting businesses and communities up and running after a disaster is our highest priority at SBA.”

Wagner and his crew will be at the library through Thursday, April 16. But, as he explained yesterday, people needn’t visit the library if for some reason they can’t or choose not to. Loan information and applications can also be completed online.

The loan packages available under the program are attractive. According to SBA information officer Matthew Young, rates for 30-year home loans can be as low as 1.813 percent and 4 percent for businesses. But as Wagner made clear, these are not loans designed to replace existing debt or to upgrade a property.

“What we would loan is the uninsured loss,” he said.

As an example, if it cost a condo owner $100,000 to replace a unit and the owner received $70,000 in insurance payments, the loan would be for $30,000. There is a provision for loans to cover what is termed the “increased cost of compliance.” In the instance of Westgate, when rebuilt the condos will have to conform to today’s fire codes, which could add to the cost of the units. That added cost could be eligible for a loan.

Timing of the loans would appear to benefit victims of the fire that destroyed Building C of the Westgate complex and its 38 condos. An estimated 100 people were displaced by the fast-moving fire.

Firefighters were hampered in their efforts to battle the blaze by low water pressure. The state fire marshal has yet to release a report on the cause of the fire, which, according to the accounts of tenants, is believed to have started on the third floor when a work crew doing repairs used heaters to dry out the walls damaged by roof leaks. No one was injured in the fire that broke out in mid-morning.

In an interview about 10 days following the fire, William Herendeen, who lost his condo to the fire and is secretary of the condo association, said the association would move as quickly as possible to replace the building and the 38 units. He said plans are already being drafted and he was hopeful the condos would be built within a year. The building was insured for $12 million, he said.

Herendeen could not be reached yesterday, but he said last month he was working to get the disaster designation so as to make the low cost loans available.

According to a release at the request of the Rhode Island Emergency Management Agency (RIEMA), the SBA, in conjunction with the Warwick Emergency Management Agency, conducted a Preliminary Damage Assessment (PDA) of the site of the fire on March 24.

 “The purpose of the PDA was to ascertain eligibility for an SBA Administrative Agency Declaration,” said RIEMA Director Peter Gaynor. “The awarded declaration will allow the affected residents to apply for low-interest, long-term disaster loans that assist in physical loss and economic injury due to devastation.”  

“I am grateful to Fire Chief Edmund Armstrong, RIEMA, the SBA and the governor’s staff for working to make this funding available for those whose lives have been forever altered in some way by the fire,” Warwick Mayor Scott Avedisian said in a statement.

Wagner said that once applications are completed they would be submitted to the processing center in Buffalo, N.Y. and people “should have an answer in a matter of days.” SBA would produce closing documents, and the funds would become available after that. In the case of loans for rebuilding, Wagner said disbursements of the funds could be made in stages to meet the contractor’s schedule and not to incur added interest expenses.

“This is for those who need it,” Wagner said of the program. He said his team is at the library to “talk people through” the process of applying for the low interest loans.

The Disaster Loan Outreach Center at the library will be open for the following dates and times: today from 9 a.m. to 6 p.m.; Friday from 9 a.m. to 5 p.m.; Saturday from 9 a.m. to 1 p.m. and Monday, April 13 through Thursday, April 16 from 9 a.m. to 6 p.m.

For additional information on SBA disaster assistance, contact RIEMA at 946-9996 or visit the SBA’s website at www.sba.gov/disaster.

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