Midsize companies fall through cracks for flood aid

Businesses are too small for state help; loans just make dent
By Michael Cass • THE TENNESSEAN • July 16, 2010

The Flood of 2010 put Mid-South Wire Co. in a tough position.

Too big for a small-business disaster loan that would make much of a difference, not big enough for the relief offered by the state, the low-carbon wire mill will have to borrow every dollar for a rebuilding project estimated at up to $15 million.

"If you're an ice cream shop or a barbershop, it's a godsend what FEMA can do," said John T. Johnson Jr., the company's president. "We're not that, and we're not Gaylord. We don't employ 2,000 people. We don't get that kind of attention. We're the odd man out.

"It's been a hard, expensive, frustrating road to recovery — with no help from anybody yet."

Too big for a small-business disaster loan that would make much of a difference, not big enough for the relief offered by the state, the low-carbon wire mill will have to borrow every dollar for a rebuilding project estimated at up to $15 million.

"If you're an ice cream shop or a barbershop, it's a godsend what FEMA can do," said John T. Johnson Jr., the company's president. "We're not that, and we're not Gaylord. We don't employ 2,000 people. We don't get that kind of attention. We're the odd man out.

"It's been a hard, expensive, frustrating road to recovery — with no help from anybody yet."

Too big for a small-business disaster loan that would make much of a difference, not big enough for the relief offered by the state, the low-carbon wire mill will have to borrow every dollar for a rebuilding project estimated at up to $15 million.

"If you're an ice cream shop or a barbershop, it's a godsend what FEMA can do," said John T. Johnson Jr., the company's president. "We're not that, and we're not Gaylord. We don't employ 2,000 people. We don't get that kind of attention. We're the odd man out.

"It's been a hard, expensive, frustrating road to recovery — with no help from anybody yet."

Companies such as Mid-South Wire are in what they and their advocates call "the doughnut hole." Federal aid won't cover much of their costs, and a state sales tax exemption program approved by the General Assembly only applies to companies such as Gaylord Entertainment Co. that will invest at least $50 million in rebuilding.

The legislature did agree to let any property owner get a reduction of his or her tax assessment for the entire time the property is damaged. Prorated reductions also are available for the personalty tax, which applies to equipment that must be replaced.

But an attempt to create a sales tax exemption on new equipment fell short; only the largest companies received that. A proposal offering franchise and excise tax credits also was defeated.

"Companies that are moving here get incentives," said David Stansell, president of Stansell Electric, founded in 1940. "We've been here forever. With 180 employees, that's not an insignificant player, and we've been here so long. A little break in a situation like this would be nice."

'Gaps' exist

Stansell Electric's out-of-pocket costs will exceed $1 million after insurance kicks in, Stansell said. Like Mid-South Wire, the company will turn to its bank to finance its rebuilding.

Ralph Schulz, president and CEO of the Nashville Area Chamber of Commerce, said some companies are struggling mightily to bridge the gulf between insurance coverage and actual needs.