TOM BEARDEN: The Army Corps of Engineers continues to work on strengthening the levees that failed after Hurricane Katrina, flooding 80 percent of the city. Over the past three weeks thousands of tons of fill material have been dumped to seal the huge gaps that developed. They've also driven massive metal barriers across the canal's channel but the whole system is still fragile.
BRIG. GEN. WILLIAM GRISOLI: Well the system has been weakened from the storm that we just had. And what we want to make sure we have is we're able to repair and protect from a tidal flow or a tidal influx or heavy rains.
TOM BEARDEN: Brigadier General William Grisoli is the deputy commander of the project. He says Hurricane Rita's path will determine whether the levees will hold.
BRIG. GEN. WILLIAM GRISOLI: What we're anticipating now, we feel we might have some flooding. That's why we advised the city and the parishes about the reoccupation. We were concerned about that. So we saw there might be some flooding based on either three inches of rain in six hours or six inches of rain.
TOM BEARDEN: Does the possibility exist that that 80 percent of New Orleans that flooded once before will flood again?
BRIG. GEN. WILLIAM GRISOLI: There is a possibility depending on the storm and how close it gets to us.
TOM BEARDEN: This past weekend New Orleans' mayor Ray Nagin announced the timetable for reopening parts of the city and invited business owners and some residents to come back and start cleaning up. But federal officials questioned the wisdom of that, giving the state of the levees and the impending Hurricane Rita and the invitation was withdrawn.
SPOKESPERSON: Can I take your arm?
MAN: Yes, okay.
TOM BEARDEN: In the French Quarter, authorities were still removing people who had ignored the Mayor Nagin's original evacuation order three weeks ago.
SPOKESMAN: Just get right in the car over here.
TOM BEARDEN: Contradictory messages from local and federal authorities didn't stop Billy Spain from starting to clean up his water-damaged restaurant in the French Quarter. But he's nervous about Hurricane Rita too.
BILLY SPAIN: Very concerned. Very concerned. I'm watching it today, listening to it on the radio. And they tell us we've got to go; we're going to have to go. It would be devastating to New Orleans if this happened again, but we'll pick up the pieces just like we did for Katrina and we'll move on. We have to. This is our home. You know, we love New Orleans. There's no other place I'd like to live but New Orleans.
TOM BEARDEN: Spain's restaurant, The Star Steak and Lobster House, employed 35 people. He says he can complete repairs in about a week if he gets help getting the materials to do the job.
BILLY SPAIN: We have water. It's not drinkable but it's good for, you know, cleaning and done whatever we're doing. You know, there's myself and one other employee here. That's basically it. And all of our employees are scattered everywhere. So we hope to hear from 'em. We hope to get 'em back. He got a little roof damage, flooded in the kitchen, flooded in the dining room. Basically we have to rip everything out and start all over. Hopefully we can do that. I really hope that, you know, they don't forget about the small business people. It's very important that the small businesses stay here.
TOM BEARDEN: Jim Sugarman is the general manager of the House of Blues, a large bar, restaurant and concert hall just down the street. It employed 350 people before the storm.
JIM SUGARMAN: We did have some leaks in the ceiling. But really because we didn't take on any floodwater, the damage is very, very minor, some wind damage and just a little bit of water damage.
TOM BEARDEN: The building was practically undamaged, its ornate decoration and folk art collection completely intact.
JIM SUGARMAN: So we've got air conditioning and lights.
TOM BEARDEN: But Sugarman says there aren't any customers now. He doesn't know when they might come back.
JIM SUGARMAN: Our business is very much dependent on tourism and convention business. And our concert business is 80 percent local. And the locals aren't coming back anytime soon so unless there's some sort of huge public relations effort to get business into New Orleans, we're going to struggle.
TOM BEARDEN: How crucial is the functioning of the French Quarter to the economy of New Orleans?
JIM SUGARMAN: Oh, it's critical. I think someone said that it's the engine that runs the economy of the city. I think that's very true. It's the perfect place for the Phoenix to rise from the ashes so we're lucky that the French Quarter was left intact. We'll build from here.
TOM BEARDEN: Every businessperson we talked to was confident that New Orleans' vital tourist economy would rebound. They just don't know when.
JIM LEHRER: Jim Sugarman flew to Los Angeles on business today. He said he was confident Rita would miss New Orleans. But Billy Spain is planning to leave if the hurricane comes within 100 miles.