New Orleans Public Radio
Most of Louisiana’s $1.6 billion dollars in federal flood recovery money has been dedicated to homeowners. But thousands of businesses also need financial help if they’re going to recover. According to the National Flood Insurance Program 40-percent of flooded business never reopen. Karen Henderson from WRKF looks at how Baton Rouge area businesses are recovering, nearly six months after the devastating flood.
Harry Mitchell surveys a commercial building in Baton Rouge with a potential client, taking notes. Mitchell owns Harry’s Painting Service. With so many people rebuilding after the August flood, he has more customers than he can handle. But just a few months ago he wondered if his business days were over. Mitchell operates his company out of his home, which flooded.
“For the first two three weeks we didn’t know which way to turn, what to do,” Mitchell says. “People were calling us because we’re a painting company, saying, ‘Hey we need your services, need you to come and remove sheet rock.’ I didn’t have a clue we didn’t have a computer, we didn’t have a printer.”
What he did have was flood insurance. But the claims process was slow. He needed other sources of funding to get back on his feet.
“We did have a savings, and thank God we did. We used our savings to take care of most of it.”
His local church also contributed.
“It was a trying time, it was a testing time, but you know God saw us through.”
Mitchell is still in the process of rebuilding but is well on his way. “After we finally got my home together I was able to go out and work of course it’s the busiest time it’s ever been because of being a painting company, sheetrock and finishing it was a big demand on our work,” he says.
Elsewhere in Baton Rouge, printers are running at Baton Rouge Press. Much of the massive warehouse still sits gutted, a visual reminder of the water that shut them down for months. Owner Pat Prather says they got four feet. It soaked presses and computers , and turned paper stock and orders ready to be shipped out into paper mache.
Prather says, “I called my insurance person immediately, ok what do we need to get going because our business has been interrupted because I bought business interruption insurance and she said, ‘Pat, it doesn’t cover you because you don’t have flood insurance.'”
Prather’s business isn’t in a flood plain and had never flooded before. She says her losses totaled more than a million dollars. To save her company she borrowed money from the bank. “The biggest challenge going in is knowing how much money you needed, what were the needs going to be,” she says. “I think I went back three or four times, no we have to have more money, this is costing more than we originally anticipated.”
Prather is rebuilding in phases. It’s been tough but she says her employees’ dedication helped her move forward. “They wondered, you know is she gonna try to bring it back. They were just worried, will we still have our jobs. I was the first one to get here that morning and when I saw them start arriving I knew that we could do it.”
Business is up and running, employees are working, but now she’s got debt to manage. Mitchell and Prather’s stories are familiar to Adam Knapp, President and CEO of the Baton Rouge Area Chamber of Commerce. Knapp says it’s hard know exactly how many businesses were affected by the flood because there’s been no official survey.
“The estimates we came up with early on was that the number was in the neighborhood of potentially 12-thousand businesses in the areas where there was water and inundation,” Knapp says. “The states’ estimates are little narrower than that come down to as many as 6-thousand businesses that are flooded in some way directly and so we’ve been using that number.”
The Louisiana Department of Economic Development estimates structural damages to businesses at $590 million, equipment losses at $260 million, and lost inventory of over $1.4 billion. So far, the federal government has approved $1.6 billion for statewide recovery — a fraction of what is needed.
“The vast majority of that is going to be for homeowners but they have committed to putting up about $52 million for business recovery assistance, technical assistance,” Knapp says. “Most of it is going to be small business grants and loans to try to help folks who got flooded to get some dollars so they can get back and running. ”
Louisiana State University Economist Dr. Jim Richardson says big businesses have an advantage. “I think the businesses that came back, like in the Juban Crossing or the national chains, they had a lot of financial support from outside the area and they could get back up if the company thought, ‘we have a big customer base here it’s going to come back.’”
The speed of community-wide recovery, Richardson says, will be key for the survival of small businesses. “There are some valuable small businesses that simply will say I cannot wait a year for my customers to get back I don’t have that type of staying power,” he says. “So they may say right now I might want to relocate or I might want to stay I need to find alternative employment opportunities.”
And every business that shuts down means less tax revenue for that community.
“If that business owns property, is paying property taxes, what’s happened to the assessed value? I know everything may go down by about 20-percent again and that’s a hit because school boards, parish governments all depend on those property taxes too,” Richardson says.
Governor John Bel Edwards plans to head back to Washington this month to seek more federal recovery aid. When he does, Pat Prather wants him to remember the value of small businesses.
“I want him to think about what a small business does, they employee all of these that maybe have loss. We had about five people that had water in their homes some had insurance some did not. We employ these people so we are as equal as in importance as the private property owner because we are the ones who employ them. “