Irene: Schoharie business near limit of resources after flood

PHOTOGRAPHER: Edward Munger Jr.

While some businesses have simply shut down in the face of disaster, a local business owner has been keeping 27 employees on the payroll while trying to recover from $2 million in flood damage.

But Harva Co. President Susan K. McGiver isn’t sure how long the family business — operating for 62 years — can keep it up.

It’s not for lack of trying.

Despite a complete halt to revenue-generating production Aug. 28, the Schoharie-based plastics fabricator offered workers continued employment if they agreed to help muck out the 30,000-square-foot facility.

At the same time, the company was juggling the need for new equipment and finding usable space to get production back up and running.

The company has applied for every form of help that’s been made available but, in 78 days, nothing has come through.

Flooding from Tropical Storm Irene forced the business to find another spot for its lathes and machining operations, so it brought equipment to a building at 2922 state Route 7 in Howes Cave and some production has resumed.

But that facility didn’t have sufficient power; installation took about five weeks; and it still needs a heating and cooling system and bathrooms. All of these costs must be covered by Harva.

So far, McGiver said the company purchased several used machines in Pennsylvania. One replaces an $80,000 saw — they found a hand-cranked unit and sent an employee to pick it up in his truck.

Thousands of dollars have been spent on new electrical service, $50,000 for a service to dry out the old facility and $20,000 in electrician costs. Meanwhile, Harva has continued to make about $16,000 in weekly payroll.

“We need some kind of financial help,” McGiver said Monday.

She said the business hasn’t been without any help — the Schoharie Teachers Association helped replace insulation on the first floor of the facility once it was gutted.

“They really helped us tremendously,” McGiver said.

The company recently got word back from the U.S. Small Business Administration, but its offer of help sounded like more bad news than good. The company could stay afloat with a $500,000 loan, and the SBA responded with an offer of more han $1 million. But there were more strings attached to it than McGiver is comfortable with.

The SBA is offering the loan on several conditions.

To get the loan, there would be a lien placed on the facility, on all the company’s equipment and on McGiver’s house — another flooded structure next door to the Harva Co. on Fair Street.

The company would have only 16 years to pay off the loan and, in year five, it would be expected to add an amount equaling 10 percent of net profits to its monthly payments.

The Harva Co. wasn’t inside what FEMA considers a flood zone, so it wasn’t able to purchase flood insurance. And, not surprisingly, the company’s regular insurance policies aren’t covering a thing.

“Everything we thought we might possibly get some help with we have applied for,” said McGiver, who spent 37 days in a hotel and is now situated in an apartment while her home is repaired.

She said she’s hoping to stave off layoffs, but time is growing short.

“This little company has bent over backwards to keep our employees working,” McGiver said.