Powers and Sons Construction awarded $1M to $2M loan, the largest among known Black firms in NW Indiana
By Erick Johnson
Some 531 businesses in Gary were recently awarded at least $56,519,207 in loans from the federal $669 billion Paycheck Protection Program, according to a Crusader analysis of data from the U.S. Department of Treasury on 13 Northwest Indiana cities.
Of that group, Gary had the fourth highest amount in total PPP loans based on minimum estimates. Powers and Sons Construction received a loan between $1 million to $2 million, the largest of any known Black-owned business in Northwest Indiana, the Crusader found.
Charter schools, construction firms, trucking companies, and health clinics are among the many Gary businesses that have received PPP loans since April. On July 5, they were among millions of loan recipients across the country whose names and company data were posted on a national database on the website of U.S. Department of Treasury.
The names of businesses that received PPP loans under $150,000 were not listed.
The database shows that nearly 84 percent or 447 of Gary’s 531 PPP recipients received loans under $150,000.
In Northwest Indiana, 6,218 businesses in 13 cities in Northwest Indiana, received at least $562,946,701, the Crusader found.
Among the 13 cities, Elkhart topped the list with 1,207 business receiving PPP loans. Together, those businesses received at least $164,038,305 in PPP loans.
Merrillville was the second highest with 776 business receiving at least $85,371,863 in PPP loans.
Next was Crown Point, the third highest, with 995 businesses receiving $70,378,298. After Gary, Hammond was fifth with 565 businesses receiving at least $47,600,000.
Rounding out the list was:
Schererville ($34,928,047),
Munster ($28,480,229),
Dyer ($20,730,916) ,
Hobart, ($18,777,022),
Saint John ($14,582,904),
East Chicago ($10,494,309),
Cedar Lake ($7,691,493) and
Whiting ($3,354,108).
Elkhart led the pack in every loan funding level. Some 890 businesses there received PPP loans under $150,000. About 158 loans were between $150,000 to $350,000; 122 were between $350,000 to $1 million; 25 were between $1 million to $2 million; nine PPP loans were between $2 million to $5 million and three were between $5 million to $10 million, the highest loan amount.
In Gary, 16 businesses received PPP loans between $1 million to $2 million, including the Drexel Foundation for Academic Excellence. Founded by former Gary Mayor Thomas V. Barnes, the foundation owns and operates the Thea Bowman Leadership Academies. Other recipients that were awarded similar loans include, HMD Trucking, DM Express and Powers and Sons, a respected, Black-owned construction firm that has operated in Gary for 53 years.
Spectacle Entertainment’s two Majestic Star Casino ships in Buffington Harbor received a $5 million to $10 million PPP loan, and one for $1 to $2 million.
In 2019, Spectacle Entertainment purchased Majestic Star Casino with plans to transform them into a $300 million land-based Hard Rock Casino entertainment complex that aims to open in 2021.
Other Gary businesses that received $5 million to $10 million PPP loans are the energy firm Consolidated Fabrication and Constructors, and Crown Coor, a successful subcontractor that designs and installs custom built walls and roofs for sports stadiums, office buildings, airports, hospitals and schools.
MGT Consulting of America, which manages the Gary School District, received a PPP loan between $2 to $5 million on April 8 through Valley National Bank. The Florida-based firm indicated on its application that it has 104 employees.
Some 30 businesses in Gary received PPP loans ranging from $350,000 to $1 million. Another 30 received PPP loans of $150,000 to $300,000 the database shows.
Some 447 Gary businesses are the majority of the city’s loan recipients. Though the names of the businesses are not listed, the exact amount of their loans are revealed as well other details. Twenty-six received PPP loans over $100,000.
Forty-two loans were between $50,000 to $100,000, and 379 were under $50,000. Seventeen businesses that received PPP loans under $150,000 were Black-owned, two were Hispanic-owned, three were Asian-owned and 14 were owned by whites. Some 410 businesses did not reveal the racial identity of their owners.
Sixty-four businesses that received PPP loans under $150,000 were owned by males and 13 were owned by females. The rest of the businesses did not reveal the gender of the owners.
About 189 of these loan recipients were approved in April. Approximately 166 recipients were approved in May and 92 were approved in June.
In addition to the 17 Gary businesses that said they were Black-owned, three businesses that received PPP loans higher than $150,000 are also Black-owned. They include Gary Pediatric and Family Dentistry and New Horizons Inc. Together with Powers and Sons Construction, they received $1.3 million in PPP loans.
By comparison, 29 businesses in Elkhart identified themselves as Black-owned. Together, they received $1,879,939.
Implemented by the U.S. Small Business Administration, PPP loans are part of the President Donald Trump CARES Act that provides economic relief to businesses across the country during the coronavirus pandemic. The low-interest PPP loans will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 60 percent of the forgiven amount must have been used for payroll).
Employers must complete an application process for the loan forgiveness which is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
Business owners were required to certify on the PPP application that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”
Collectively, the 531 Gary businesses that received PPP loans have 2,168 employees. But there are concerns that the companies will not use these loans to keep employees on the payroll.
This week, the Washington Post reported in its analysis of 4.9 million PPP loans that many companies reported to have “retained” far more workers than they employed. And for more than 875,000 borrowers, the data shows that zero jobs were supported or no information was listed at all.
The PPP and SBA will continue to accept applications until August 8.
