SC Private Island Owners Association Received Federal Rescue Funds Amid Pandemic | Business
The group of owners of another private island near Charleston – Dewees Island – have accepted money from the federal bailout fund intended to help small businesses and nonprofits financially damaged by the coronavirus pandemic.
An email obtained by The Post and Courier shows that the Dewees Homeowners Association, North Charleston, received a loan of $ 218,315 from the Paycheck Protection Program of the US Small Business Administration.
The group is not the first local homeowner or homeowner association to operate the emergency loan program, to which Congress has allocated $ 649 billion.
Kiawah Island, south of Charleston, also received funding through its private community association, but then returned the money following the public outcry.
The Dewees association is eligible because of its association status. But he’s already facing the same public backlash as Kiawah.
Wendell Reilly, chairman of the group, said the association’s board and members will meet later this month to consider repaying the loan.
U.S. Representative Joe Cunningham, a Democrat from Charleston who represents South Carolina’s 1st Congressional District, called on landowners association leaders to do just that.
âP3 loans were designed to help small businesses stay afloat and keep paychecks for their employees, not for wealthy community associations with millions of dollars in reserve,â Cunningham said in a statement on ‘Dewees money.
“This money should be returned so that it can help struggling small businesses in our community get through this unprecedented health and economic crisis,” he added.
Cunningham isn’t the only one who thinks the loan is an inappropriate use of federal funding. Several of the Republican candidates vying for Cunningham’s seat this year are also opposed to the group’s use of the loan, which can be completely waived by the federal government if used to cover salary costs.
“I can’t imagine why the PPP funds should go to an association of owners, corporations or Ivy League schools because the funds were intended to help small businesses,” said Nancy Mace, a lawmaker. of the state running for the seat of Congress.
“It shows why Congress desperately needs an adult in the room with my financial expertise to identify issues like this before taxpayers are forced to pay millions, billions or even billions of billions of garbage. added Kathy Landing, a Mount Pleasant board member who is also competing for the Republican nomination.
Dewees is a secluded community just north of the Isle of Palms and can only be accessed by a private ferry. The real estate association, according to its most recent financial report, represents approximately 129 landowners on the 1,206-acre island.
News of the loan was included in an email sent to association members in May.
The post explained that David Dew, the association’s chief executive, applied for the loan in early April as small businesses across the country scrambled for federal funding. The group received the money in mid-May during the second round of funding for the loan program.
The association sent another email to islanders on Thursday after receiving questions from The Post and Courier. In it, Reilly explained why the association’s leadership chose to ask for the money in the first place.
He said the funds were needed as the island’s ferry service revenue declined in March and April, and spending increased due to safety precautions the group implemented in response to COVID-19 .
“With the support of the board of directors, the manager of the island requested relief through the PPP loan cancellation program because we were concerned at the time about the safety of our staff and the operation of the ferry from. the island, âReilly wrote. “We are a small business with less than 25 full-time employees, and the immediate financial impact of COVID-19 was real to us.”
The association generates most of its income from property, ferry and rental fees, according to its financial reports. Between September 2018 and September 2019, the group received approximately $ 1.9 million in revenue from these fees, but spent more than $ 2 million during the year on repairs, insurance and employee salaries.
During the same period, the real estate association also expanded its reserve fund, which is intended to finance projects on the island, from $ 2.1 million to $ 2.5 million.
The group did not say how much it lost due to the drop in the number of passengers on its ferry in March and April. But in the last fiscal year, the group raised $ 144,059 from this service.
Reilly pointed out that the group was unquestionably eligible for the federal loan, but suggested that he might choose to repay the loan in the near future. He also acknowledged that other small businesses may have suffered more from the pandemic.
âWe take seriously our responsibility as the beneficiary of the CARES Act relief and will consider the implications of conserving PPP funds in a thoughtful manner,â Reilly told The Post and Courier.
Taxpayers and members of the public have not been able to obtain a complete list of businesses, corporations and nonprofits that have received PPP loans at this point.
President Donald Trump’s administration has refused to release the names of the recipients, and it is in the process of being pursued by several media, including The New York Times, The Washington Post, and The Wall Street Journal for access to this information.
The US House also tried to pass a bill last week that would require the SBA to disclose these records. The effort was thwarted by 146 Republicans, including the entire Republican delegation from South Carolina, which voted to keep the information private.