Feds declare economic disasters for Swan Lake, McKinley fires
Small business owners who can show that they lost customers because of the Swan Lake Fire on the Kenai Peninsula can now get low-interest federal loans to help them recover.
The U.S. Small Business Administration declared the Kenai Peninsula and surrounding areas an “economic injury zone” due to the widespread Swan Lake Fire this summer. The fire, which started June 5 and burned more than 167,000 acres, threatened the Sterling Highway in August and burned across the Kenai National Wildlife Refuge between Sterling and Cooper Landing.
Though firefighters controlled fire activity through the early summer and scaled back operations in July, a windstorm and exceptionally hot, dry conditions in mid-August caused the fire to flare again, crossing the Sterling Highway and threatening Cooper Landing with evacuation.
Alaska’s exceptionally hot and dry summer saw a number of fires start and burn in areas they have not burned in the past. Because of the lack of rain on the Kenai Peninsula, the Swan Lake Fire was able to burn through alpine territory across the Mystery Hills and down into the popular Resurrection Pass Trail area.
In East Anchorage, a brush fire in a wooded area in early July prompted a hasty response and evacuation orders among nearby residents. Hot, dry conditions with risks of high wind prompted forestry officials to declare a complete burn ban across the Kenai Peninsula for several weeks in August. A pair of destructive fires dubbed Deshka and McKinley also sprung up in the Matanuska-Susitna Borough, burning dozens of properties from Talkeetna to Willow.
Cooper Landing and Sterling are usually major destinations throughout the fall and summer for tourists, with plentiful hiking, fishing and camping opportunities. This summer, because of the difficulty of transportation and the heavy wildfire smoke, many visitors cancelled their trips, leaving business owners to swallow the shortfall.
Though the Kenai Peninsula Borough’s sales tax figures for the third fiscal quarter have not yet been published, some small business owners estimated between a 5 and 20 percent revenue loss, said Cliff Cochran, Kenai Peninsula Center Director for the Alaska Small Business Development Center.
The western peninsula was affected as well, with tourists from Anchorage not wanting to risk getting stuck if the fire closed the highway and the air quality significantly impacted by smoke.
“In-state tourists from Anchorage and the Mat-Su Valley saw videos circulating on social media of the fire billowing over the highway, causing many of them to cancel trips down to the peninsula,” Cochran said in an email. “B&B and lodge owners complained that this occurred even when the fire was not anywhere near the highway and there was great weather with mountain views on the peninsula.”
Air quality and threats of evacuation kept many tourists away from Cooper Landing, which depends heavily on the seasonal income from May to October. Firefighters and other personnel stationed in Cooper Landing buffered the impact some, but when they left, revenues dropped further as residents looked to conserve income after a poor summer, Cochran said.
In some cases, small businesses reported their revenues down between 20 to 30 percent in September and October.
The Kenai Peninsula Borough Assembly appealed to Gov. Michael J. Dunleavy, who sent a request for a disaster declaration to the Small Business Administration on Oct. 2. About a week later, on Oct. 8, the agency granted the declaration for the Swan Lake Fire.
The disaster declaration makes low-interest federal loans available for small businesses affected by the fire. Small business owners on the Kenai Peninsula and in the adjacent areas — including Kodiak, the Municipality of Anchorage, the Mat-Su Borough, and the Lake and Peninsula Borough — can apply for assistance.
Business owners in the affected area don’t have to show property damage, only economic injury, said Kevin Wynne, the public information officer for the SBA’s Office of Disaster Assistance in the West Field Operations Center.
The interest rates are set at 4 percent for small businesses and 2.75 percent for private nonprofits. The loan funds can be used as working capital but not to replace lost revenue, Wynne said. All of the loans are worked out on a case-by-case basis as people apply.
“(The rates) make recovery very affordable for small businesses,” he said. “One of the great things about the loans is they get a five-month deferral. They’re going to be low payments anyway, but (business owners) can spend all their resources in getting back up in running.”
The Swan Lake Fire wasn’t the only disaster declared for Alaska’s summer. North of Anchorage, the McKinley Wildland Fire burned only 3,288 acres but caused much more property damage than the Swan Lake Fire. Ignited on Aug. 17, the fire had damaged 52 homes, three businesses and 84 outbuildings by the following night and threatened the Parks Highway, leading to road closures and traffic control.
The SBA also declared a disaster for the McKinley Fire, though the conditions are a little different because buildings were damaged. In that area, homeowners are eligible for loans to help pay for repairs in addition to the small businesses in the area; in the Swan Lake Fire area, only small businesses are eligible.
Homeowners can borrow up to $200,000 to replace or repair damaged real estate and up to $40,000 for damaged personal property. To date, the SBA has approved three homeowner loans for a total of $479,000 in the McKinley Fire area, Wynne said.
The loans have a deadline, though. For homeowners in the McKinley Fire area, that’s Dec. 2. Small business owners in the McKinley Fire area have until July 1, 2020, and until July 8, 2020 in the Swan Lake Fire area. That’s in part because business owners have to get their paperwork in order, including tax documents and profit and loss statements, and that can take time, Wynne said.
Small business owners can apply for loans online at the SBA’s website.
“It’s generally as quickly as possible that they can apply,” he said. “Generally, for businesses, it’s within 21 days. The loan officer will call them and work with them to get the loan approved.”
Elizabeth Earl can be reached at [email protected].