Granite City residents offered loans after city’s insurance provider denies flood claims

Oct. 17--GRANITE CITY -- The best chance Granite City residents will get at financial relief from damages caused by August's flash flooding, officials say, may come in the form of low-interest federal loans offered by the U.S. Small Business Administration since the city's insurance provider denied all of their claims.

That rain flooded streets, homes and businesses in Granite City leaving many residents dealing with severe damage and an abundance of questions.

Granite City was recently notified by Gov. J.B. Pritzker of approval of a disaster declaration from the Small Business Administration (SBA), meaning relief is coming for those residents who suffered the worst of the sudden downpour of 9 inches of rain over a 3-hour period in mid-August in the form of "disaster loans."

Thomas McGee, the city's insurance provider, reportedly denied all claims filed by residents and businesses stemming from those floods.

Cathy Hamilton, Granite City economic development director, said city officials are investigating the possibility of appealing that decision on behalf of its citizens. In the meantime, she said, the SBA loans are welcomed news.

"We are one of the only communities who have received a (disaster) declaration," Hamilton said, noting that some cities affected by springtime flooding from the Mississippi haven't received a declaration.

Madison County Emergency Management Agency Director Tony Falconio said the loans are a way for residents to rebound from the strain of out-of-pocket repairs.

"I really hope that residents and businesses take advantage of it," Falconio said. "That's the bottom line for me."

Homeowners, renters, business owners and nonprofit organizations are eligible for SBA's disaster loans and funds from those loans can go toward homeowners and renters' repair costs and replacing damaged or destroyed personal property.

Residents in unincorporated Madison County, Pontoon Beach or Madison who were affected by the flooding may also be eligible for these loans.

Homeowners are eligible for loans of up to $200,000 to repair or replace damaged or destroyed real estate and loans up to $40,000 to repair or replaced damaged or destroyed personal property.

Businesses and nonprofits can borrow up to $2 million toward repairing or replacing real estate, machinery and equipment, inventory and other business assets damaged or destroyed by the flash flooding.

Interest rates on the loans can be as low as 4 percent for businesses, 2.75 percent for nonprofits and 1.75 percent for homeowners and renters. Those loans can be paid off over a maximum of 30 years. Rates and loan terms are based on each applicant's financial situation.

According to the SBA, the loans have been made available in response to a letter from Pritzker requesting a disaster declaration from the agency.

Applications for physical property damage are due by Dec. 9, 2019, and economic injury application are due by July 10, 2020.

In September, Falconio and loss verification teams with the SBA toured the worst-affected areas of Granite City in an effort to gain approval from the agency for the loans.

Falconio said those seekings loans don't need to make an appointment and that consultation takes roughly 30 minutes.

Hamilton added that while the loans aren't the best option for every resident, for the time being, it may be the only help residents can get. The city was denied FEMA or IEMA funds due to the lack of wide-spread severity.

"People don't always want to take on more loans and that's something we can understand," she said.

But some residents took to social media Wednesday to say the loans weren't enough help. Hamilton says it's their only option.

Others have called for the city to take more responsibility, due to Granite City's aging sewer system.

Those consultations are being held in town's city hall Monday through Friday from 9 a.m. to 6 p.m. and on Saturday, Oct. 19 and Oct. 26, from 10 a.m. to 2 p.m. until Oct. 30.

Hamilton said as of mid-afternoon Wednesday, the first day the consultations were offered, 25 residents had met with SBA officers.

"The word loan sort of scares people away a bit, but this is a way for people to recoup some funds and I hope people at least come in and take advantage of that," Falconio said.

Hamilton said critical needs are a focus as winter approaches. She said the city is looking to make sure residents have what they need as the weather gets colder and has encouraged people to call the mayor's office directly if they need assistance with heating.

BEHIND OUR REPORTING

Here's why we did this story

A "freak" storm dumped 9 inches of rain on Granite City on Aug. 12, flooding homes and businesses. The BND is bringing this information to residents in an effort to keep them informed about the damage to their city and what is being done about it.

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