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Yet Another Beginning on Heartbreak Street


May 6, 2003
Copyright © 2003
THE NEW YORK TIMES. All rights reserved. 

THERE are some hardships that most small businesses face – a crumbling economy, cranky customers, sluggish suppliers, errant employees, annoying accountants and, of course, the Internal Revenue Service.

Then there are the problems that have afflicted a relatively small number of unlucky entrepreneurs, like losing their businesses because of terrorist attacks. That has happened to Olga Diaz – twice.

Ms. Diaz is a hairdresser who owned a beauty salon in the Marriott Hotel in the World Trade Center. It was completely destroyed on Sept. 11, 2001.

Her previous salon was on the 44th floor of Tower 1 in the trade center; terrorists bombed the parking garage of the complex in 1993. Though the damage from that attack was less physically devastating than the subsequent one, it was nearly as bad economically, Ms. Diaz said recently. For one, all her employees quit.

Now, located a block from ground zero, she has once again reopened Olga's Salon and Spa, using her innate persistence and new skills like applying for loans and grants.

"I was determined that no one was going to knock me down," she said. "Plus, what else was I going to do?"

While her case is extreme, Ms. Diaz's journey has been similar to those of hundreds of businesspeople in New York City who are still coping with the aftermath, financial and emotional, of Sept. 11. Indeed, the shock waves from the attack on the trade center are still being felt at small businesses nationwide, especially in industries like travel and tourism.

"Nationally, small businesses are generally cautious in today's business climate," said Marc M. Goloven, an economist with J. P. Morgan Chase, the Wall Street bank and securities company.

New York, he said, is not terribly different from the rest of the country, except that the local economy is still contracting. For example, the city's unemployment rate is still rising sharply – it just hit 8.8 percent, while the national unemployment rate increased slightly to 6 percent in April, from 5.8 percent in March.

Among the city's small businesses, Mr. Goloven said, the hardest hit have been those that cater to travelers and tourists and financial workers like stockbrokers, banking managers and insurance executives. All of those people were Ms. Diaz's major clients and had been so since she went into business in 1984. Born in Puerto Rico, she studied fashion in New York but relied on cutting hair to feed her family.

After a stint working at a barbershop in the trade center, she bought the salon on the 44th floor. The place was bustling. "A bar and restaurant on the same floor drew a lot of customers, and they had to pass by me," she said. Many became clients, and she eventually had seven employees.

That changed after the 1993 bombing, which killed six people and injured more than 1,000. "It really created a big problem for me, financially and emotionally," Ms. Diaz said.

Her employees, who had to walk down from the 44th floor in heavy smoke, were too traumatized to return to the salon. Tight security made it impossible for casual customers to walk in, and it discouraged even longtime clients.

Though the Port Authority of New York and New Jersey found Ms. Diaz a better location in the trade center, her lawyers missed a crucial lease deadline, she said, and in 1995 she ended up working out of her apartment.

Then, through a friend, she heard that the hotel, at 3 World Trade Center, might be willing to house a salon. After much persistence and phone calls, a $20,000 loan and all her credit cards, Ms. Diaz opened her salon there in 1996.

It was a tiny little corner, almost a closet, she said, adding that after her renovations, "A lot of people used to call it a jewel box."

Customers included hotel guests, workers from the two towers and people who came to the hotel for weddings and other events, she said. It was going well and everything was paid for, she added. Her only concern was whether the hotel would renew her lease.

Then, once again, terrorists struck, this time with more catastrophic results. None of Ms. Diaz's employees were killed, but many customers died, and she cannot talk of them without weeping.

When she heard of the early morning attack while visiting her mother in Florida, she said: "I went on my knees and I cried. I knew my clients didn't have a chance."

She lost not only her chairs, equipment and etched mirrors, but also her records, licenses and client lists. And she was displaced from her apartment for three months. (She lives in Battery Park City, near ground zero.)

"Despite everything," she said, "I started looking for a new place right away. I was on a mission to survive."

But finding a spot was hard and paying for it harder. Her insurance on the salon had lapsed while she looked for a new broker. The United States Small Business Administration turned down her loan application. (Fewer than half of those who applied were accepted.)

She eventually got a $25,000 grant from Seedco, a nonprofit assistance corporation in Manhattan, and a small but critical loan from the Brooklyn Economic Development Corporation. In August, she reopened her salon on the second floor of a building on Cortlandt Street near ground zero, in a space she found herself.

For the most part, Ms. Diaz is back to worrying about the things small-business owners worry about: that the signs on her building are so cluttered that passers-by will not see hers; that competition from less expensive nail places will put more pressure on manicure prices; that the poor economy will prompt more customers to pinch pennies.

There are still lingering 9/11 issues. One is that the grants she and others received have been declared taxable. And, of course, there is the possibility that not enough people will return to the wounded streets of Lower Manhattan to make her business a go. But she is optimistic. "Little by little, people are coming back," she said. "I see this thing as a long-term situation. I keep high hopes."

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