New Orleans Businesses Struggle to Rebuild
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SINGING: Well, way down yonder in New Orleans in the land of the dreamy scenes there’s a garden of Eden you know what I mean…
TOM BEARDEN: The song may call New Orleans an “Eden,” but one would be hard pressed to find many business owners who would use that word to describe the economy these days. The music’s cheerful, but there’s only the wait staff to listen to it at the recently reopened Gazebo Cafe in the famous French market.
And even then, the band has to compete with the noise of a construction crane across the street, delivering new drywall to a gutted business. At the other end of the building, the Gazebo owner’s father’s restaurant is still closed.
Flooding ruined the kitchen in John Tsatsoulis’ Market Cafe, and he’s in the process of installing $200,000 worth of new equipment, including a truckload of pieces for a new walk-in freezer.
JOHN TSATSOULIS: We came back, like, the 20th. They allow us to come back around the 20th of September, and I cannot tell you what — how was it here. I mean, everything stinks, you know, everything.
So me and my kids, and a couple of my workers, we start cleaning out all this nasty food with the masks and everything else, you know, and then we found that out all the freezers and refrigerators were contaminated because the food stayed there too long, you know, and everything stinks, so we decided to change all the equipment.
TOM BEARDEN: The money comes from his savings because almost none of the damage was insured. Tsatsoulis spends a lot of time on the phone, trying to keep in touch with his former employees. They’re scattered all over the South and Tsatsoulis hopes he can persuade them to come back.
JOHN TSATSOULIS: These people are having trouble finding a house. They don’t have no place to stay. Some of them, they found jobs up there. They have children; they’re going to school, and they don’t know if they come here if they find a school or a place to stay. So this is also a big challenge for me.
TOM BEARDEN: The other problem is that there are precious few tourists on the streets. If they’re not here spending money, there’s no income for the businesses, workers or tax base for the city. The normally crowded sidewalks are dormant and the carriages are running empty.
Many businesses say they’re doing about 20 percent of what they normally do this time of year. The city of New Orleans owns the 300-year-old French Market complex and leases space to a variety of tourist-oriented businesses.
Charles Napoli is the president of the board of directors. He agrees that housing is the key to economic recovery.
CHARLES NAPOLI: Unless we get people back into trailers or some temporary homes so that they can make a decision on whether they are going to rebuild destroyed homes or not, is a big part of the city coming back.
TOM BEARDEN: Anthony Patton sits on an economic development commission that is studying how to revitalize the economy.
ANTHONY PATTON: Our business community now is in triage. I mean, we need to absolutely put the IV in these guys, those businesses that are still alive.
TOM BEARDEN: He is particularly critical of the federal Small Business Administration, which grants low interest loans.
ANTHONY PATTON: The federal government has been acting very slowly in this process. It is happening at the demise of the business community. The SBA process has been, quite frankly, a nightmare for many of our businesses.
The SBA created what is called the SBA Go Loan. And I was real excited about it because the purpose of that was it had a maximum of only $150,000. But it was meant to — it was created so that it could be a fast injection of capital into these businesses to keep them alive.
And now we’re finding that the Go Loan is taking as long as the disaster loan. So, frankly, I am a business owner. I have applied for both of those, and I have not received any at this time.
TOM BEARDEN: Mark Randel is a public affairs officer with the SBA.
MARK RANDEL: We are doing the best we can with what we have. We have increased the staff from about 800 before the disaster to over 4,000 currently. The first 90 days, we approved over $1 billion in loans. The next 30 days, we approved another billion, so that’s over $2 billion, and in the last 20, we hit $3 billion. So we’re on a good pace. We’re literally approving tens of millions of dollars each day in loans.
TOM BEARDEN: The city’s industrial center could also use a transfusion of capital. In East New Orleans, the Meyers family is trying to get their four warehouses cleaned up and back in operation.
PATRICK MEYERS: When I came in the first morning after the storm, there was a 120-foot by 12-foot hole in the roof of our facility and it damaged all the product; everything got wet and fell into our offices here. We still have packaging material in here and some food products, and due to the holes in the roof and the condition of the building everything was condemned in this facility.
TOM BEARDEN: Patrick Meyers says everything has to be thrown away, even empty glass food containers, because of the risk of contamination. He also has worries that go beyond the immediate cleanup.
PATRICK MEYERS: The bad news is we lost half of our customers due to the storm. We have one customer locally down here, Domino Sugar, that is staying with us, thank God. And we anticipate being back in operation in this building here in about two weeks. We plan on putting product in here, if everything goes good and the inspections go good. So we are keeping our fingers crossed.
TOM BEARDEN: Patton says a lot of small businesses will have to deal with a dramatically different city in the near future.
ANTHONY PATTON: The estimate is that about 50 percent of the city will come back. So you have a whole different market dynamic that you’re going to have to look at. If your business was structured on the old population, the old demographics, you now have to address that with your new business, you know, planning and processing so that you could move forward.
TOM BEARDEN: Michael Tran is already thinking about restructuring his business. He owns a meat market and grocery store in a residential neighborhood not far from downtown. Tran has spent weeks cleaning up the place and removing meat that spoiled when the electricity went off.
MICHAEL TRAN: If I open up again, it wouldn’t be the same type of business. I would probably just cater to mostly like construction workers, selling hot food, and, you know, like cigarettes and maybe a little bit of alcohol, and that is about it.
TOM BEARDEN: But like many New Orleans business owners, Tran can’t do much of anything until he gets a check from his insurance company.
MICHAEL TRAN: The first guy came out in mid-October, and he told me that he was going to get it taken care of in a week. Then, like a little over a month later, someone called and said that he could not finish the claim so they had to expedite the claim and they had to send somebody out there, which took another month.
So someone came out toward the end of December and they finished it up and she called me and she told me that everything was done and I should be receiving my check, and that was probably like over two weeks ago, and still I haven’t received anything.
TOM BEARDEN: Back at the French Market, John Tsatsoulis is doing what all businessmen do: Counting up his costs and wondering whether he’ll have enough customers to cover them.
JOHN TSATSOULIS: Actually, I was ready to retire. You know. But right now I guess I have to stay to help my children, you know, and I am going to stay as long as it takes. And I don’t see me retiring very soon, you know.
TOM BEARDEN: Most of the business owners we talked to say they are hanging on by their financial fingernails, hoping that the city, state and federal governments can find a way to bring people back to the crescent city to live, to work and to play — because without all three, New Orleans commerce cannot recover.