Federal aid for 9-11 recovery plentiful, but N.Y. waiting for check

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Airline security overlooks potentially disastrous loophole By Greg Barrett Skies could be safer for $1 billion By Greg Barrett Study: Ground zero workers still dealing with demons By Greg Barrett Federal aid for 9-11 recovery plentiful, but N.Y. waiting for checks By John Mahachek

Looking back. Moving ahead. Two years after terrorist attacks stunned the nation and changed the world, a six-day series by The Journal News considers the impact on the past, the present and the future. (Opens in new window)

Coming later today From WUSA-TV in Washington, D.C.: Watch streaming video of events commemorating the 9-11 terrorist attacks.

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By JOHN MACHACEK | GNS

NEW YORK — Two years after terrorists toppled the World Trade Center towers, Shelley Spector is finally seeing tangible signs of recovery sprouting at ground zero.

An owner of a small public relations firm near the trade center site, Spector lost clients since the Sept. 11 attacks as big corporations cut back on her services during a deepening recession. But last month, she got word that she has been approved for a federally funded business recovery grant. The money, less than $20,000, is enough to cover her unpaid telephone bills and help her stay in lower Manhattan.

“I’m feeling very good finally,” said Spector, who’s also starting to get calls about new business. “I think we have turned the corner. If you had asked me a couple of months ago, you would have heard a different story.”

Spector is just one of thousands of people starting to feel the impact of federal recovery efforts. So far, the federal government and philanthropic groups have provided about $29 billion in recovery aid to New York City, far surpassing aid in any previous U.S. disaster, according to a recent Ford Foundation report. That money includes about $5.8 billion from federal and private sources for compensation of families of World Trade Center victims.

The Ford report found that some government agencies distributed more money in response to 9-11 than they had in all previous disasters combined.

Much of the original $21 billion that President Bush and Congress approved in federal aid for New York recovery and rebuilding has been already allocated for specific needs, such as encouraging people and businesses to stay in or come back to Lower Manhattan. But only one-fourth or less of the federal aid actually has been received by the city and state at this point, according to various studies.

While more federal assistance is beginning to reach individuals and businesses still suffering financially from 9-11, pleas for greater help for the poor and public service jobs for the unemployed are clashing with state and city proposals. These plans include large-scale transportation projects, - such as a long-sought rail line connecting Lower Manhattan with John F. Kennedy Airport in Queens - and other long-term economic development initiatives in neighborhoods near ground zero.

“While some may have expected the federal aid for the 9-11 recovery to come in one large check, that was never the intention,” said Molly Wasow Park of the New York City Independent Budget Office, which has analyzed the aid distribution. “Most of these projects will take years to complete, so it will be many years before the full aid package is accounted for.”

Even when all the federal aid and private insurance payments have been received, New York may still be $20 billion to $30 billion short in covering all of the 9-11 losses, according to studies by a leading business group and New York City Comptroller William C. Thompson. But further requests for federal aid won’t be made until more of the current assistance is spent and changing needs are assessed, say state officials and key New York members of Congress.

Rebuilding under way

Money already being spent, though, has made ground zero more than just a deep pit. Concrete layers of a temporary transit station rise to ground level at one corner of the 16-acre trade center site. The station for commuter trains from New Jersey is slated to open in November and bring back tens of thousands of riders who could trigger further help for a still-sluggish lower Manhattan economy. About $4.55 billion has been proposed for the WTC station, other new or upgraded transit hubs in lower Manhattan, rail access to JFK airport, commuter ferries and street improvements near ground zero.

Another $7 million is proposed for promoting tourism, especially in Chinatown, which suffered significant economic damage from the 9-11 tragedy and the recession because garment factories and other businesses had little or no cash reserves to weather the storm.

Battery Park City, a sprawling, upscale apartment complex near the trade center site on the west side of lower Manhattan, is nearly full thanks to federal rent and mortgage subsidies and additional reductions offered by building owners. Its occupancy rate dropped to 44 percent after the attacks but is now 97 percent - 2 percentage points higher than it was on the morning before Sept. 11.

The Empire State Development Corp., a state-controlled agency, says it has dispersed more than $536 million through 21,174 grants to more than 15,000 small businesses. About $333 million is allocated for big corporations under another program to keep them in lower Manhattan, according to the city comptroller.

Office buildings around ground zero are in various stages of repair, reconstruction or awaiting resolution of insurance disputes over redevelopment. But there is a consensus on a master plan for rebuilding ground zero with the world’s tallest building - Freedom Tower - anchored by other skyscrapers, museums and a performing arts center. A groundbreaking is expected in the summer of 2004 under a fast-track timetable set by New York Gov. George Pataki.

“No one would have imagined that we would have come this far,” said Kevin Rampe, president of the Lower Manhattan Development Corp., a state-controlled and federally financed agency overseeing the redevelopment. “I think the word is out that lower Manhattan is all about the future and now is the time to get in because with the investments that we are making in transportation infrastructure and with what we are doing on this site, this will be the place for the future.”

Asking for more

Still, poor people in the Lower East Side tenements and public housing projects say they are being shut out of financial assistance for rent and health problems stemming from 9-11, while state and city officials ponder how to use the last $1.2 billion in uncommitted funds. Those residents who live in eligible neighborhoods are protesting long delays in getting aid while others want the boundaries for eligibility expanded. They are especially angry about a recent decision by the federal housing department to provide community development block grant funds for a combination of upscale and middle-income housing, which they can’t afford to buy.

“What makes an egg fry on my head is that they have already allocated $50 million to build luxury housing with money that was meant for the neighborhood,” said Tina Lah, one of about 50 people who gathered recently at a Lower East Side community center to plan a rally against recovery aid policies.

Cho Cheong Fung, a 49-year-old unemployed garment worker, agrees.

“They show more concern for people with money,” said Cho, one of many Chinatown residents who have fallen behind on rent and other bills while waiting more than nine months for decisions on federal aid controlled by the Lower Manhattan development agency. “I’m not really clear about their regulations. They haven’t finished distributing aid to us and now they are shutting down the program.”

The agency is closing its residential grant offices now that the June 14 application deadline has passed. But officials say they have approved $172 million in grants from more than 38,000 applications. Members of Congress from New York City recently urged HUD that “more affluent residents should not be aided at the expense of New Yorkers who are struggling the most.”

“We are working very hard to work with the communities and to address their needs and concerns, but we won’t be able to solve every problem,” Rampe said. “It is a matter of setting priorities. How do you take $1 billion and divide it in a way at the highest and best use so you can address all those needs?”

Sen. Charles Schumer, D-N.Y., who helped negotiate the federal aid package with the Bush administration, said he is satisfied with the way the aid has been allocated and distributed despite the criticism.

“There will be a few changes that have to be made. But we never thought the money would solve all needs,” Schumer said. You know you get it both ways. People say spend it more quickly, but don’t waste it. Those two commands are often contradictory. I think it is working pretty well.”  

© 2003, Gannett News Service