Westerly - More than 10 weeks after Superstorm Sandy turned Misquamicut Beach into a crumpled mess of sand, water and debris, business owners are making progress toward their goal of bringing the popular summer spot back to life in time for Memorial Day weekend.

But they say they haven't been helped along by insurance companies, which have balked at immediate payouts, including money to compensate for the loss of business.

"The real problem is not the storm; the real problem is people - insurance companies and banks," said Deborah Stebenne, who has owned the distinctive pink-sided Seashell Motel on Winnapaug Road for the past eight years. "Nobody's got any money yet."

The only money handed out to help business owners has come from the Greater Westerly-Pawcatuck Chamber of Commerce, which has raised $157,000 in private donations, with a goal of upping the ante to $400,000 in the next few weeks. The chamber started raising money 24 hours after the storm barreled through Misquamicut in late October, putting out collection jars and selling T-shirts and hoodies with the slogan "Bring Back the Beach."

So far, the community has purchased $22,000 worth of items to support the cause.

"These are small mom-and-pop, family-run, sometimes third-generation businesses," Lisa Konicki, executive director of the chamber, said. "These are real people that make up our community."

Business owners are grateful for the help. Without the chamber's support - and the leadership of Konicki - some of them said they weren't sure how they could have started to rebuild.

"She's an amazing person," said Steve Daggett, son of Doug Daggett, co-owner of Sandy's Lighthouse restaurant and bar at the corner of Atlantic Avenue and Winnapaug Road.

All up and down Atlantic Avenue, the main drag in Misquamicut, owners of properties were scrambling to try to get their businesses ready in time for the lucrative summer season. But the Daggetts, who said their 300-seat establishment was inundated with 6 feet of water in Sandy's wake, weren't sure they would be ready, estimating a June 1 reopening.

"It's changed a lot of lives," Steve Daggett said of the storm.

At the nearby 24-room Andrea Hotel, a year-round lodging establishment right on the Atlantic Ocean, storm damage recently led owners to make the heart-rending decision to demolish the more than a century-old building. While this will mean that the hotel will not be open for a year or two, the owners plan to set up an outdoor dining area during the summer, said Michelle Pinto, hotel manager and member of the Colucci family that has operated the business since 1946.

In the past, she said, the restaurant's seafood-heavy menu has accounted for about 80 percent of the Andrea's business - though the hotel is still key, since many guests choose to eat in the 200-seat dining area.

"It's important that we're still here," Pinto said.

As workers emptied the building last week, setting aside some key pieces such as a stained-glass window while donating other items to groups ranging from Big Brothers/Big Sisters to Habitat for Humanity, Pinto said the owners have decided to rebuild to meet the latest building codes. She said the new hotel will try to retain some of the charm of the old Andrea - including its distinctive fireplace - while perhaps adding amenities such as a banquet space.

At the Atlantic Beach Casino Resort down the road, the main concerns have been replacing electrical systems and getting approvals for a new septic system.

"It's a lot of work," said Barbara Stillman, who operates the timeshare business. "But we're really very strong people. We will see this beach open one way or another."

Streamlined permitting

Caswell Cooke, president of the Misquamicut Business Association and a town councilor, said more than 1,000 volunteers from Serve Rhode Island spent the first eight weeks after Superstorm Sandy cleaning up about 200 properties. Cooke said the progress made so far has encouraged Misquamicut to go ahead with its annual Spring Festival, which with music, amusements and vendors attracts about 15,000 to the beach the second weekend in May.

"Everyone on the beach will be open for the season," Cooke said. "They're all shooting for May."

The outpouring of support from the public has been overwhelming, he said. Misquamicut's Facebook fan base, for instance, has risen from 8,000 before the storm to more than 11,000.

Still, big improvement projects remain, Cooke said, including repairing the drainage system along parts of Atlantic Avenue, the dredging of Weekapaug Pond, the rebuilding of sand dunes and the possible raising of the roadbed on Misquamicut's main drag.

One of the big projects is sifting through mountains of sand to remove the debris. A large machine doing that work has left pyramids of sand along the beach. Sometime in March, the sand will have to be returned to the beach and smoothed over.

Cooke said the state has been a big help in getting Misquamicut back on its feet. For instance, the Department of Environmental Management and the Coastal Resources Management Council worked together to streamline the permitting process for those planning to rebuild in Misquamicut, and even made site visits to the area to help owners get moving quickly.

Establishments totally wiped out in Sandy's rage - Sam's Snack Bar and Little Mermaid's restaurant - are applying for permits to set up mobile versions of their businesses that would be placed where wooden structures previously stood, Cooke said. The town is also considering portable trailers for Wuskenau Beach, a town-owned beach, that would replace changing rooms and bathrooms destroyed by the storm.

"I don't know of anyone that's not rebuilding," Cooke said. "Everyone's moving forward." This includes the estimated 400 rental cottages in the Misquamicut vicinity that were affected by Superstorm Sandy, Cooke said. He said that volunteers cleaned out about 150 homes in the area that had been damaged by the storm.

Konicki, the chamber president, said business owners are operating under the so-called "50 percent rule," which requires structures to be torn down if the loss represents at half or more of the value of the property. In those cases, she said, owners will have to rebuild to current code, which is more expensive and could result in having to move structures farther back from the beach.

But, Konicki said, visitors to Misquamicut this summer should see few changes, with the exception of a small ice cream shop that had decided not to reopen even before the storm.

"Businesses will be open, restaurants will be open," she said. "We are working around the clock to ensure that."

But Stebenne, owner of the year-round, 10-room Seashell Motel, where the ground floor was under 4 feet of water after the storm, said she has been disheartened by the response of her insurance company and bank.

She has hired a public adjuster to fight the insurance company, which she said denied there had been any storm damage. It also has denied her any payments for loss of income as she makes repairs to the hotel, she said.

Meanwhile, she said, her bank has warned her not to miss a mortgage payment.

"I'm relying on credit cards right now to make it through," Stebenne said. "They could put me and other people out of business."

But through it all, she said, Konicki and the chamber have been a lifesaver, handing her a check for $4,000, which represents a mortgage payment on the motel.

"I couldn't believe it when she called me," Stebenne said. "I cried, it was so nice."

l.howard@theday.com