WASHINGTON -- New York State said it expected to give grants to 240 small businesses worth a total of $37.5 million during the last quarter of 2013 when it launched a federally funded program to help fix buildings and property damaged by superstorm Sandy.
But in a recent report to HUD, the state said it made no grants in that quarter -- and that the $1.5 million it had spent went mainly for marketing and program costs.
At a Senate hearing Wednesday, Sen. Charles Schumer (D-N.Y.) raised concerns about the program to press Housing and Urban Development Secretary Shaun Donovan to ensure the funds get to small businesses, particularly those on Long Island.
"Now this is really disappointing, one of the areas where Sandy money has not worked very well," Schumer said.
"It's been over 18 months since Sandy, and I have heard from small-business owners who want these [grants] but are not getting them," he said.
Donovan, who oversees the federal government's Sandy recovery effort, said he is looking into what happened.
"I have been surprised at the limited number of businesses that have come in and applied for the program," he said.
Donovan said HUD made the grants flexible at the request of lawmakers, allowing "businesses to be eligible even if they hadn't applied for SBA loans or they have gotten an award from SBA but their circumstances have changed."
Donovan said it might be a marketing problem.
A spokesman for New York Rising, which administers most of the state's Sandy aid, did not return phone calls.
Schumer also pressed Donovan to approve HUD funding in the Sandy aid for the Bay Park sewage treatment plant outfall pipe and a system to remove nitrogen from the treated water, estimated to cost up to $750 million.
He also asked Donovan to help with a Nassau County plan to protect the Great South Bay, similar to Suffolk County's plan. Donovan said he would work with local officials.