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More than $20 billion promised to New York, but the flow is slow
By Shannon McCaffrey, Associated Press
WASHINGTON — Soon after Sept. 11, President Bush promised New York City more than $20 billion in federal aid. A year later, only a fraction of that money has been spent.
Thousands of aid applications are sitting in government offices, while the cash flow has been slowed by red tape and a lack of consensus over how to rebuild the World Trade Center site.
Restrictive guidelines have prevented others from even qualifying for the money.
Garment workers in Chinatown say they have been neglected while large corporations have pocketed millions. Small businesses complain they have been overlooked. New Yorkers who applied for mortgage and rental assistance were initially turned away in large numbers.
"It's an outrage," said Duane Anzalone, whose family owned restaurant one block south of the World Trade Center went out of business after the attacks.
"I think the majority of the money that has been spent is getting to the wrong people. The people who need it most are getting the least."
While the largest charities have distributed 60 percent of the $2.4 billion in donations they have raised for Sept. 11, the federal government has handed out about 14 percent -- or roughly $3 billion -- of its $20.9 billion total.
One federal grant program administered by the state has 26,000 applications pending. Of the 35,000 loan application packets sent out by the Small Business Administration, there have been only about 5,000 recipients. A grant program for small businesses only began distributing funds in March.
The Federal Emergency Management Agency, which oversees $8.8 billion of New York's Sept. 11 aid, has drawn the most fire for being tightfisted.
An agency accustomed to dealing with floods, hurricanes and earthquakes seemed intent in the months after Sept. 11 on not becoming the huge barrel of Washington pork said by critics to pay first and ask questions later.
For the first time, the agency insisted that residents applying for mortgage and rental assistance prove their losses were a "direct result" of the attacks, which meant rejecting 70 percent of the initial applicants. Entities that did not fit neatly into FEMA guidelines -- such as private universities and New York's utilities -- struggled early on to secure help.
FEMA has since shown greater flexibility and is reviewing those rejected applications. Thousands more have been approved, but even so, thousands of applications are still pending.
"This was a very different kind of event for us," said Brad Gair, FEMA's New York City recovery officer. "We've been trying to look outside of the traditional ways of dealing with disasters."
Another factor that has slowed the money is the cleanup at Ground Zero, which cost billions of dollars less than initially expected.
FEMA has had to redirect that money -- much of it toward rebuilding and upgrading the city's transit system. Those projects will take years and some of them are dependent on finalizing plans to rebuild the 16-acre site.
Guidelines for qualifying have also been too restrictive in some cases. Garment workers in Chinatown have, for instance, been left out because many lacked the needed specific employment documentation to qualify for aid. Businesses and workers too far from Ground Zero have also failed to qualify for some aid like housing assistance and economic development grants.
Questions also surround a separate $7.7 billion pot of aid and tax breaks intended to recharge New York City's weakened economy.
Those funds include $5 billion in tax breaks and bonds for lower Manhattan and $2.7 billion in community development funds.
Only $374.5 million in that aid has been given to businesses so far and critics are skeptical that the money will keep businesses downtown. Already, some of the Trade Center's largest tenants have announced plans to relocate in midtown or to leave the city altogether.
Some of the money to the largest corporations has been likened to corporate welfare. A grant of $25 million to American Express raised eyebrows because the company had already said publicly it planned to stay in New York.
But state economic development officials said the aid given to the large corporations has kept 40,000 jobs in downtown New York.
Small businesses have perhaps been hit the hardest. State officials took until March to get that aid out the door. Business advocates say the money has not been enough to meet the needs.
An estimated 1,200 to 2,000 small business, including about 600 in the
twin towers, have been wiped out.