Hurricane Harvey – Business Recovery

from a Local Perspective

GEDP is a private, non-profit 501(c)(6)

organization that is membership based

Supporting Business and Community

JeffreySjostrom

President

October11,2017

1) Disaster Preparedness

2) Business Recovery Tools

3) Lessons Learned

Business Recovery

from a Local Perspective

The list of damages and problems included:

Approximately 75 to 80 percent of the 2,500

businesses experienced severe damage

Water levels greater than nine feet and mold

in the historic “Strand” district

Significant damage to the Port of Galveston,

major cultural facilities, and UTMB campus

80 percent of residences had flood damage;

one out of five units have been condemned

Only 60 percent of the city’s population had

returned six weeks after the storm

Significant labor shortages for most of the

local businesses that re-opened.



Hurricane Ike Impact: Hurricane Ike struck the

southeast coast of Texas on September 13, 2008 as

a Category 2 storm causing an estimated damage of

over $30 billion to the state with direct impacts to 29

Texan communities. Although the water quickly

receded in Galveston, there was considerable

recovery and rebuilding to be accomplished on the

island.

Ø Galveston Preparedness 2005:

v Hurricane Recovery Task Force (City and Business); Disaster Recovery Guide;

Resource entity outreach

Ø Events:

v Hurricane Katrina & Hurricane Rita

(2005)

; Hurricane Ike

(2008)

; National

Banking & Housing Collapse

(2008)

; Deepwater Horizon oil spill

(2010)

Ø IEDC:

v December 2009 IEDC Small Business Recovery Workshop; 2010 IEDC

recommendations for federal response (RestoreYourEconomy.org)

Ø Recovery Plans:

v Disaster Mitigation Plans; City Monthly Emergency Operations Meetings

(during Hurricane Season); Public Meetings on Preparedness

Disaster Preparedness: 2005 - 2010

“…economic trends in effect prior to Hurricane

Katrina – intensified after the storm…”

Brent Warr, Gulfport MS - 2006

Ø Damage Assessment - Inventory of Business

Conditions

Ø Financial Resources - Available Workforce

Ø Networking - Doing Business after the event

Ø Planning - Marketing – Business Climate

Ø Psychological Impacts:

Marathon not a Sprint

Business Recovery

Tools

Ø Galveston Business Recovery Fund

ThisprogramwasdevelopedincooperationwiththeHGAC[501(c)(3)].

ThisFundprovidedalowinterest(5%),mid-term(upto10years)loan

forviablebusinessesontheislandpriortoIkewhohavecommittedto

reopeningonthisisland.Fundingwascreatedthroughcorporateand

charitablecontributions.AdministrationofthisFundcoordinatedbythe

GEDPandtheHGAC..(competitionwithsocialservices)

Ø Hurricane Ike Recovery Loans

Gapfinancingthroughalowinterest(5%)singlepaynote,shortterm

(180days)loan.

BetweenSeptember13

andDecember31

of2008–ourlocalbanks

reinvestedover$45milliondollarsbackintotheGalvestonbusiness

community.



GEDP Disaster Recovery Tools

Forinformationon

thisloanprogram

calltheGEDPand

wewillassistin

workingwithyou

andyourlocal

lendersto

implementthis

program.



Ø Regional Revolving Loan Fund (RLF)

HGACadministeredthroughU.S.DepartmentofCommerce–EconomicDevelopment

Administration(EDA).



Ø CDBG DR Small Business Loans

$2.5MillionallocatedthroughHUD/CDBGDisasterRecoveryfunding–Non-Housing.

Approvedas“forgivable”loanprogramin2011forimplementation.64loansapprovedwith

averageloansizeof$35,000.CreditunderwritingperformedbyHoustonBusiness

Development,Inc.(arms-length).



Ø EDA Disaster - Public Works Grants

EconomicDevelopmentAdministration(AustinRegionalOffice)tothePortofGalveston

(Maritime)andTheUniversityofTexasMedicalBranchatGalveston(Emerging

Technology)..



Ø Other:

CDBGAllocationProcess(H-GAC);BusinessNetworking/Contracting;Planning,Planning

andmorePlanning…

GEDP Disaster Recovery Tools

Recovery Program Experience:

Ø Role of Economic Development Organization

ü Local Governments have 3 Priorities {P3}: Public Works (infrastructure); Public Health and Safety;

Public Relations

ü Economic Development pivotal role to support business rebuilding and recovery

Ø Gap Financing – Working Capital

ü The period between event and insurance or other financial resources for Business Recovery

ü Local Response is the most direct and effective in short term

Ø Recovery Resources

ü Understand the Funding Flow/Process Timeline (approval does not mean “funded”)

ü Priority is for Local Government’s and Social Services

ü Business Recovery is NOT a Major Component (80/20) – Stafford Act, CDBG SOP

ü Planning and Administration Expenditures are significant

Ø Planning

Ø Can be overwhelming and never-ending

Ø Challenge is to tie financial resources to the recommendations in the Plans

Ø 5 – year Anniversary planning (focus)

Lessons Learned

GEDP Experience:

Ø Organizational Capacity

ü Membership revenue loss; Operations (8 Offices between 2008 and 2015); expectations for service

irrespective of current events; Contingency Plans for disaster environment (offices, equipment,

technology, PR; etc…)

Ø Financial Resource Utilization

ü CDBG DR – Business Loan Program: UNDERSTAND National Objectives (LMI; slum and blight; urgent

need); Realistic expectations; Federal – State coordination

ü SBA – Housing 80% - Business 20%; Credit Elsewhere/Income Eligibility; pre-disaster underwriting in

post disaster environment

ü EDA – public infrastructure to support economic development

ü Small Business challenges: Sole Proprietors; Grants not Loans; Loan Application capacity

Ø Preparedness Planning

ü If you were significantly impacted do NOT hesitate to ask for help from allies

ü If you were not significantly impacted – start NOW to communicate with your business community

about the need for Disaster Preparedness Planning for future events and opportunities that may be

available as a result of the storm

Ø PATIENCE

ü help to set realistic expectations, be prepared for multiple events

Lessons Learned

FOR ADDITIONAL INFORMATION ,

CONTACT :

=============================

GALVESTON ECONOMIC

DEVELOPMENT PARTNERSHIP

409-770-0216

1700 Strand – UTMB Customs House