Letter from the desk of Regina Lindsey (October 2017)

 

Following Hurricane Harvey’s landfall on Friday, Aug. 25, Southeast Texas faced unprecedented rainfall levels. While the Houston area saw an average of 43 inches of rain, an average of 54 inches fell on the Golden Triangle, with the majority falling on Port Arthur and Orange, as noted by the National Weather Service.

In response to this crisis, Southeast Texas saw members of the community, including business owners and our Chamber partners, use their resources and rise to the occasion to help others. For example, H-E-B provided mobile kitchens to serve food, and individual restaurants worked, even with limited resources, to feed first responders. Others, such as Classic Southeast Texas, served as distribution centers for water and supplies. Also, following the failure of the city’s water pumps, ExxonMobil, Tiger Industrial, and Echo electricians and engineers teamed up to offer a temporary solution that benefited the city’s 115,000 residents. ExxonMobil’s donations in the wake of Harvey totaled $9.5 million in addition to its provision of generators and wastewater management systems. Total Petrochemicals, Valero and Motiva also donated $250,000, $1 million and $500,000, respectively. Cheniere and Golden Pass made donation announcements as well aimed to bring relief to our area residents.

Despite these efforts, according to the Federal Emergency Management Agency (FEMA), 40 percent of local businesses do not open their doors following a natural disaster, as supply chain interruptions and unavailable employees make it difficult for business to run as usual.

Fortunately, the U.S. Small Businesses Administration (SBA) provides several loans to help business owners and individuals get back on their feet after natural disasters. The loans offered by the SBA operate on a maximum of 30-year terms. Other restrictions apply

• Business Loans, which are loans for “businesses of any size,” including private businesses and nonprofits, serve to replace lost inventory and machinery. They are limited to $2 million with interest rates as low as 3.305 percent for private businesses and 2.5 percent for nonprofits.

• Economic Injury Disaster Loans cover operational costs during recovery and are also limited to $2 million with interest rates as low as 3.305 percent for private businesses and 2.5 percent for nonprofits.

• Home Disaster Loans cover the costs to repair or replace personal property such as vehicles and real estate. Their limit is $240,000 in repairs and replacements, with interest rates as low as 1.75 percent. Under some conditions, the SBA may also be able to help in refinancing mortgages.

FEMA provides assistance for disaster-related medical, moving and storage, among other costs, after applications are processed and a FEMA inspector visits the applicant’s property. If eligible for a grant, FEMA may deposit however much money is to be received into the applicant’s bank account. However, applicants may also receive a letter detailing how they are to use their grant. For more information, websites such as disasterassistance.gov, the FEMA Disaster Recovery Center at 3871 Stagg Drive (inside the Gateway Shopping Center) and the SBA Business Recovery Center in the CICE at Lamar University (5091 Rolfe Christopher) help navigate the application and funding processes.

Harvey impacted residential areas in greater proportion when compared to public works and private businesses. In fact, according to estimates from Moody’s Analytics, homes and vehicles in Southeast Texas suffered damages worth nearly three times higher than those of businesses – in the range of $30 to $40 billion compared to $10 to $15 billion, respectively. A business disaster impact study performed by the Chamber showed similar results. In our area, 62 percent of respondents reported having no damage to their business, and 27 percent had only minor damage. On the other side, a majority of respondents mentioned having part of their labor force absent due to problems with their homes.

According to PNC Financial Services Group, however, a temporary influx of money through aid can boost hiring rates and the construction and retail industries after a natural disaster. This, paired with the fact that refineries can increase production to reach unmet quotas, may be the key to helping Southeast Texas bounce back despite the predicted economic hurdles to come.