Little money for Ferguson, scene of rare U.S. suburban riots

Reuters News
|
Posted: Dec 05, 2014 2:47 PM

By Edward McAllister and David Greising

(Reuters) - Sonya Roberts' liquor store in Ferguson, Missouri was vandalized during rioting in August and November, and with no government aid available, she is relying on Internet crowd-funding and a credit union loan to keep afloat.

"I don’t know if I am going to survive past the end of the month," said Roberts, 46, whose insurance does not cover the $37,000 worth of damage to her store on West Florissant Avenue. The roadway was the main thoroughfare for looting and arson after a grand jury last week decided not to charge a white police officer in the shooting of a black teenager.

In Ferguson, more than 50 businesses were damaged, 19 severely, according to city records. Where business once thrived, police tape flaps in the wind. Dozens of storefronts are boarded up, while others lie gutted by fire. Many residents said they were staying away from the badly hit areas.

Roberts and other Ferguson business owners are caught in a fiscal void: a dearth of local, state and federal support for the first U.S. suburb in a generation to experience racial rioting. Until now, Cicero, Illinois was possibly the only U.S. suburb to see such unrest, in 1951 after an African American family moved into the white town on Chicago's western border.

Neighborhoods in other major U.S. cities have recovered after race riots. Los Angeles, Chicago, Baltimore and New York all tapped political and fiscal resources for help after unrest in the 1960s, as did Los Angeles after the Rodney King riots in 1992. But there is no clear template for Ferguson and the neighboring communities of Dellwood and Jennings as tiny municipalities in search of recovery.

"Places like this have no fiscal or political capacity to go after state and federal funding," said Colin Gordon, a history professor at the University of Iowa and author of "Mapping Decline: St. Louis and the Fate of the American City." Ferguson has little experience obtaining government aid, he said, and could lose business to surrounding cities that were not hit.  

Certainly more money could come in over time, but early indications are not promising.

A state commission established just days before the grand jury's decision, was charged with addressing the city's social and racial problems, not its economic needs. Funding by St. Louis-area banks and business groups has made it possible for Democratic Missouri Governor Jay Nixon to make $625,000 in Small Business Administration loans available, but there are no outright grants.

"We don't want a loan. I don't want to go into more debt," said Buffi Blanchard, 44, a hairdresser at Clip Appeal on West Florissant whose windows were smashed and low white ceiling and linoleum floors were charred by firebombs.

INSURANCE CLAIMS

It is not clear how much the violence has cost firms in terms of lost business and damage to property. The Missouri Department of Insurance, which is helping businesses make claims, said the total number of claims reported between Aug. 10 and Sept. 3, after an initial spate of riots, was less than 30, coming to less than $250,000. But it does not have updated figures for last week's riots, which were much more destructive.

The federal government has programs to ease financial distress in cities with more than 50,000 people, ranging from stabilizing economically stricken neighborhoods to disaster recovery assistance. But as a city of 21,000 people, Ferguson is too small to qualify.

Any money available under the programs administered by the U.S. Department of Housing and Urban Development would first need to go through the state of Missouri.

The state has not helped much so far.

Nixon canceled a plan to call a special legislative session on compensating Ferguson for the cost of policing the riots after Republican legislators argued there was no need to spend on security beyond the amount in the existing state budget.

Disaster aid from the Federal Emergency Management Agency will not be forthcoming, the state was told in August, because such emergency aid does not cover acts of civil unrest, Nixon's spokesman, Scott Holste said.

The State Emergency Management Agency plans to assist the small business administration in determining what loans will be required for the 55 Ferguson businesses that were affected last week, but no funds have been earmarked for the city directly, said Ferguson City spokesman Jim Small. 

In the meantime, Ferguson businesses wary of state-sponsored loans, have resorted to donations from strangers. The fundraising website GoFundMe has raised about $450,000 for businesses in Ferguson.

One of the first businesses to seek funding this way, and the biggest single beneficiary, Natalie’s Cakes and More, received $268,000 from 8,260 donors, according to its GoFundMe page.

The rioting in Ferguson, just north of St. Louis, caps a period of financial decline, made even worse by natural disasters. Tornadoes hit the small city of roughly 9,000 homes in 2011 and 2013. Its most recent budget, published in June, describes its recovery from the recession as "glacial" .

Sales tax receipts, the largest revenue source, fell to $5.9 million in the 2013 fiscal year, ended June 30, down 21 percent from the recent high of $7 million in fiscal 2006. Citywide revenues in fiscal 2014 are forecast to slip to $18.6 million, down 4 percent from the previous year.

State Senator Regina Walsh has called for loan forgiveness plans for small businesses affected by the riots.

"The challenges are economic. These people do not need financial burden, they need help," Walsh said in an interview. "The big chains will be ok, but it is the small ones that will struggle."

(Reporting By Edward McAllister in Ferguson and David Greising in Chicago, editing by Ross Colvin)