Change of plans: SBA now offers heating system loans to Cedar Rapids businesses

The U.S. Small Business Administration has changed its mind on providing loans to replace heating systems in Cedar Rapids properties affected by the flooding of Alliant Energy's downtown steam operation.

The SBA said Tuesday it will accept disaster loan applications from Alliant customers that incurred additional costs for new heating sources.

That announcement reverses a previous opinion that the heating systems could not be replaced because they were not “damaged or destroyed” by the flooding.

In its new decision, the SBA relied on a section of its governing law that authorizes the agency to make disaster loans for losses caused “as a result of” a disaster.

Customers that want to apply for SBA loan assistance must be able to document that their heating source depended on the Alliant steam system.

SBA representatives will be available Sept. 9, 10 and 11 at 627 First Ave. SE to accept applications for new loans or applications to expand existing loans to cover the costs of installing new heating systems, SBA spokesman Keith McBride said.

The June 2008 flooding on the Cedar River overwhelmed Alliant Energy's Sixth Street Generating Station, a coal and gas-fired power plant that was used mainly to generate steam for downtown businesses.

About 200 downtown-area customers, most of them businesses, relied on the plant for steam to provide heat.

Unable to restore the plant immediately, Alliant installed temporary natural gas-fired steam boilers to provide heat last winter. The utility announced after an in-house study that it planned to rebuild the plant, but later the company discovered it could not get enough long-term service contracts with large industrial steam users to justify the cost of rebuilding.

Alliant plans to discontinue the temporary steam system on Dec. 1. Most customers are installing their own natural-gas fired steam or hot water boilers.