By John Cavallone and Joseph A. Pacello

On Jan. 23, the Empire State Development Corporation (ESDC) announced the World Trade Center Business Recovery Grant Program. The program is designed to provide assistance to certain businesses that suffered economic losses resulting from the events of Sept. 11, 2001. Depending on their specific location and annual revenues, businesses located downtown can receive up to $300,000 in grant assistance.

Eligibility Requirements

A business is eligible for the program if it meets the following criteria:

• It is a for-profit business entity, or a not-for-profit organization as defined in the Internal Revenue Code, and is not involved in religious or political activities; and
  
• It maintained an office in the Eligible Area (discussed below) as of Sept. 11, 2001, and continues or intends to resume its operations in New York City; and
  
• It employs fewer than 500 full-time permanent employees; and
  
• Its revenues and/or expenses were derived from operations in the Eligible Area and it had at least one full-time permanent employee that worked at its office in the Eligible Area.

The Eligible Area referred to above is the entire area of downtown Manhattan below 14th Street. Within this area there are four separately defined areas that determine the maximum available grants.

Grant Amounts

The maximum grant amounts are based on two factors: (i) annual gross revenues and (ii) location within the Eligible Area. Following is a summary of the grant amounts available to for-profit entities:

• Eligible businesses located in the 14th Street—Houston Street area: the lesser of 0.8 percent of annual gross revenues for the fiscal year ending prior to Sept. 11, 2001, or $50,000.
  
• Eligible businesses located in the Houston Street—Canal Street area: the lesser of 1.2 percent of annual gross revenues for the fiscal year ending prior to Sept. 11, 2001, or $100,000.
  
• Eligible businesses located in the south of Canal Street area: the lesser of 2 percent of annual gross revenues for the fiscal year ending prior to Sept. 11, 2001, or $150,000.
  
• Eligible businesses located in the Restricted Zone (area bounded by Chambers Street, Broadway and Rector Street): the lesser of 4 percent of annual gross revenues for the fiscal year ending prior to Sept. 11, 2001, or $300,000.

Application

Eligible businesses must file an application form, containing an estimate of their “Eligible Economic Loss” (as defined in the grant application), reduced by insurance payments and/or other government grants received, to arrive at “Net Eligible Economic Loss.” Applicants must also submit the following documentation:

• A photocopy of the business’ federal tax return for the most recent fiscal year ending before Sept. 11, 2001, as well as its New York City tax return for the same period if the business had multiple locations;
  
• A copy of the lease, deed or permit for its business premises within the Eligible Area as of Sept. 11, 2001;
  
• A copy of its current lease if it relocated from its prior location to a new location within New York City;
  
• A completed Form 8821, authorizing the ESDC to access tax information from the Internal Revenue Service;
  
• If the premises were leased, copies of both sides of rent checks, or receipts for cash payments of rent, for July, August and September 2001;
  
• A copy of the utility bill for the premises from either July, August or September 2001; and
  
• A voided check imprinted with the name of the eligible business (grants will be paid via electronic transfers).

Applications will be accepted through Dec. 31, 2002, and processed in order of receipt.

Note that grant applications are subject to audit, and grant funds are subject to recapture in the event that the recipient fails to resume its operations in New York City within one year, or relocates out of New York City within three years. Also, if an applicant subsequently receives insurance proceeds and/or additional government grants that exceed those estimated on their application, the applicant may be required to repay a portion of the grant.

For further information on this and other ESDC programs, go to www.newyorkbiz.com.