Help may soon be on the way for the dozens of Luzerne County businesses damaged by early September flooding.
A state authority is considering a proposal to allocate $4 million in tax revenue from slot machine play the Mohegan Sun at Pocono Downs casino to provide low-interest loans for those businesses.
The application, presented to the Commonwealth Financing Authority at its meeting Thursday in Harrisburg, asks for about a third of the $12 million local share of slots revenue designated under state law to be used for projects in communities in counties that host a casino. The proposal calls for the $4 million to be sent to Scranton-based non-profit lending agency Metro Action, which would serve as the fiscal agent for the Luzerne County Business Recovery Loan Program. The dozens of Luzerne County businesses affected by the flooding could apply for up to a $100,000 loan with an interest rate of 1 percent for five years.
MetroAction would work in conjunction with the Greater Wilkes-Barre Industrial Fund and CAN DO of Hazleton to provide loan origination through direct outreach to affected businesses.
The seven-member state authority needs to unanimously approve any allocation from the local share of a casino’s slots revenue.
Steve Kratz, a spokesman for the authority, said had a vote been taken Thursday, the proposal likely would have failed because some members wanted more answers before agreeing to it. The authority could meet later next week to vote on the matter, he said.
At least two area legislators support the idea.
State Rep. Mike Carroll, D-Avoca, said, “I firmly believe the use of these funds to provide financial assistance to businesses adversely impacted by the recent flooding is a wise and prudent use of this locally driven financial resource.”
State Sen. John Yudichak, D-Plymouth Township, said he was “hopeful that we can have an affirmative vote on Nov. 10th and deliver this much needed relief to our region’s struggling businesses.”
His hometown was the one that filed the funding application on behalf of all municipalities.
Gale Conrad, Plymouth Township Board of Supervisors chairwoman, said businesses on the township’s Main Street have been closed for two months since the flooding.
“They have no income,” she said. “And the only help available to them are high-interest loans. We need this program and we need it now.”
A 1 percent loan of $100,000 would be welcome to many businesses, but for companies such as Milazzo Industries in Jenkins Township, much more is needed.
Joe Milazzo, a principal with the company that manufactures ice melting products like Qik Joe, said his company’s damage has been estimated at $9 million. He has already laid off 40 workers.
“Ultimately, any help would be necessary for us to continue,” Milazzo said. “But $100,000 would mean about two weeks of payroll.”
Milazzo said he needs to purchase manufacturing machinery and equipment and he needs those employees back to work to survive.
“A lot of businesses are in the same situation as us – no work, employees laid off,” Milazzo said. “If nothing is done soon and we start losing companies, what will it mean to our local economy?”
The project narrative spells out the pressing need for help.
“In September, flooding damaged 184 Luzerne County small businesses resulting in millions of dollars in damage. Without financial assistance, many of these businesses will cease to exist. … Luzerne County cannot afford to lose these businesses nor the jobs that they create in our community. Many businesses have sought assistance through various federal agencies. However, most businesses have found that interest rates, approval criteria and turn-around time are too onerous.”
Something is needed, said Larry Newman, a vice president with the Greater Wilkes-Barre Chamber of Business and Industry.
“It is clear they need assistance now. And they need assistance that carries with it terms that are as flexible as possible to meet the needs of different kinds of businesses that find themselves in different kinds of circumstances,” he said.