Federal government approves loans for Gaylord, after major disaster declaration denied

LANSING — The U.S. Small Business Administration has declared a disaster for Gaylord, Otsego County and adjacent areas after a deadly May 20 tornado, and after U.S. President Joe Biden denied the state's request for a major disaster declaration there, Gov. Gretchen Whitmer announced Wednesday.

The rare EF-3 twister killed two people and injured 44, officials said. It destroyed homes and businesses, causing millions of dollars in property damage.

Whitmer said in a news release that the administrative declaration of a disaster by the SBA will make low-interest loans available to residents and businesses affected by the tornado.

Whitmer asked Biden for a major disaster declaration June 8. That request was denied July 2 by the Federal Emergency Management Agency, the Wednesday news release said. Major disaster declarations are at the president's discretion.

In an emailed statement, a FEMA spokesperson said that a review of all available information "determined that the damage from this event was not of such severity and magnitude as to be beyond the capabilities of the state, affected local governments, and voluntary agencies." Therefore, "we have determined that supplemental federal assistance is not necessary," the statement said.

More: Whitmer asks President Biden to declare disaster in Gaylord after recent tornado

More: Michiganders should take tornadoes more seriously after Gaylord, experts say

Whitmer said the SBA disaster declaration, announced Wednesday, is “an important step in getting the necessary support and resources to the Gaylord community,” adding: “It is clear this tornado had devastating impacts in Otsego County. These loans will allow people and businesses to begin rebuilding and will ensure the community continues to move forward.”

Bobby Leddy, a spokesman for Whitmer, said FEMA "signaled an appeal would be unsuccessful," so the community supported instead moving forward with an expedited request to the SBA "to help get funding to families and businesses in Gaylord as quickly as possible." Asked for a comment from Whitmer on Biden's denial of the major emergency declaration, Leddy said: "We are thankful the U.S. Small Business Administration approved the governor's request for this additional funding."

Asked why the governor's office did not announce the July 2 denial of a major disaster declaration sooner, Leddy said the office typically announces denials at the same time it announces appeals or alternative actions, such as the successful SBA application.

Whitmer was on the short list to be Biden's running mate in 2020 and served as a co-chair of both his presidential campaign and his inauguration. It has been not clear whether that would translate into increased influence for Michigan with the White House.

Gaylord Mayor Todd Sharrard said he was disappointed that the major disaster declaration was denied. His understanding was that appealing the denial would have held up the SBA loan funding, so state and local officials decided not to appeal.

"I don't think people are aware of it," Sharrard said of the denial. "We want people to be aware of it."

“Everyone who knows the Gaylord community knows that our people are strong and resilient in the face of challenges,” state Sen. Jim Stamas, R-Midland, said in the news release. “This declaration of additional available funds will go a long way toward easing the incredible burden that families and businesses have shouldered in the face of this disaster.”

The program provides low-interest loans for homeowners, renters, businesses of all sizes and private nonprofit organizations to repair or replace real estate, personal property, machinery and equipment, inventory, and business assets that were damaged or destroyed. The SBA tailors the repayment of each disaster loan to the borrower’s financial capability. This declaration covers Otsego County and all adjacent counties, including Antrim, Charlevoix, Cheboygan, Crawford, Kalkaska, Montmorency and Oscoda.

The SBA will establish a temporary Disaster Loan Outreach Center in the impacted area for one-on-one assistance. Loan applications also will be made available online or by mail. For additional information on low-interest SBA loans or the application process, visit DisasterLoanAssistance.sba.gov/ela/s.

“Businesses and private nonprofit organizations may borrow up to $2 million to repair or replace disaster-damaged or destroyed real estate, machinery and equipment, inventory, and other business assets,” said Laketa Henderson, SBA’s director for the district that includes Michigan.

A major disaster declaration would have made a wide range of relief available, including grants to eligible residents.

Biden declared a major disaster in southeast Michigan following severe storms, flooding and tornadoes in June 2021. Before that, former President Donald Trump declared a major disaster in the Midland area following severe flooding and dam failures in 2020.

Contact Paul Egan: 517-372-8660 or pegan@freepress.com. Follow him on Twitter @paulegan4. Read more on Michigan politics and sign up for our elections newsletter.

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This article originally appeared on Detroit Free Press: Biden rejects major disaster declaration for Gaylord but feds OK loans