Wednesday, March 03, 1999
Flood of money flows to Falmouth
Loan fund set up to fill gaps made when stores left
BY ANDREA TORTORA
The Cincinnati Enquirer
FALMOUTH Two years ago, Pendleton County business owners sat in a school gym wearing muddy rubber boots and work suits, asking officials from a dozen state and federal agencies what it would take to rebuild the region's economy after a devastating flood.
This week, managers of a new $500,000 federal revolving loan fund are getting ready to make the first of several offers of financial assistance.
The move is one of the best hopes of recovery so far, particularly in Falmouth, which was devastated by Licking River flooding that began March 1, 1997.
I certainly think people will take advantage of this, said Randy Bastin, owner of Randy's Clothing and Footwear in downtown Falmouth. We've got some new businesses coming to town, so it would be nice to help them.
When Mr. Bastin attended that post-flood meeting in 1997, his clothing store and the This N That Shop were nearly destroyed. To keep himself in business, Mr. Bastin consolidated the stores into one.
Falmouth saw a rapid decrease in population and tax revenue after the flood. Floodwaters caused $36.5 million in damage, with 200 homes destroyed and dozens more torn down because of structural damage. More than 1,500 of the city's 2,700 residents were displaced.
While millions of dollars in disaster aid was awarded to the area, in many instances, there was no rebuilding. People and businesses moved on.
The new money will establish a low-interest loan fund to allow businesses to reinvest and reopen.
We just redid the outside of my building, Mr. Bastin said. Things should stay good as long as we can keep the water away.
He is one of the success stories.
In all, 37 of 118 Pendleton County businesses affected by the flooding did not reopen or moved.
We just want to get some businesses back on their feet or start up some new ones to rejuvenate the area, said Jay Treft, management services specialist for the Northern Kentucky Area Development District, which is managing the loans. If we manage the program properly, the funds should continue to revolve and recycle over and over again until we can continue the program indefinitely.
More than 25 Falmouth businesses have inquired about the loan program. Just one has applied. Mr. Treft said the application is for a new type of business not currently in Falmouth.
Phillip Turner, vice chairman of the Industrial Development Authority, a county agency, said he is concerned about the small number of applicants.
There is half a million dollars out there we want to give away, but there are several hurdles, Mr. Turner said. If people don't mind going through the bureaucracy of the red tape for the loans, the interest rates are great.
Loans will be given at 4 percentage points below prime, never going below 4 percent. Loans must be repaid within 10 to 15 years, depending on what is purchased.
The good thing about the revolving loan fund is that it can help people who were not satisfied with federal flood recovery help, said Anthony Strong, Industrial Development Authority chairman.
It's really quite amazing, Mr. Strong said. As detrimental as the flood was, the amount of assistance that has come from the federal government has been impressive.
Steve Houchen reopened his shoe store six months after the flood wiped out 80 percent of his stock. He's in a new location now, but business isn't the same.
Things are slow, he said. We're not up to full speed. And the sales aren't as good as you'd like.
The revolving loan fund is an option Mr. Houchen might consider.
The loss of tax dollars has the Falmouth City Council considering a 1 percent payroll tax or $100,000 in budget cuts. In December, council approved a 1999 spending plan of about $550,000.
At the same time, more and more federal and state money is being used for recovery and beautification efforts.
The city won a $10,000 Main Street USA grant to redesign Shelby and Main streets. The county is now a Renaissance Kentucky Community at the bronze level, a designation that means the community is working toward downtown revitalization and his toric preservation, said Tami Vater, spokeswoman for the county's economic development office.
The county also applied to be a Kentucky Chamber of Commerce certified community and is developing small businesses through its own microenterprise program.
Started in 1998, the microenterprise program targets low-income entrepreneurs in an effort to bring new business and jobs to the county. The program is funded by a $50,000 Community Development Block Grant and a $250,000 revolving loan fund set up by the county's five banks.
Falmouth has a lot of opportunities, and we're starting to see some accomplishments for our efforts, Ms. Vater said. A lot of people are working together to bring the community to where it needs to be.
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