While it is encouraging to see so many local businesses reopening after Hurricane Harvey, many businesses have not – and will not – reopen their doors.
According to Andrew Cardenas, business recovery coordinator at the Lake Houston Area Chamber, 266 storefront businesses were affected by the flood. Cardenas says that hundreds more online and home-based businesses were also affected.
Of the storefront businesses, only 50 percent of businesses in the Lake Houston area have reopened to date. The chamber expects that number to rise to 82 percent of businesses likely to reopen at some point, although there is no set time frame by which they will be open for business.
There are multiple reasons why businesses are not reopening, said Cardenas. Many owners are sadly discovering that there is little to no help available. Several business owners spoke on the condition of anonymity.
First, FEMA support is not designed to help businesses. Instead, FEMA only serves as a clearinghouse to fast track businesses to the Small Business Administration (SBA) to apply for a loan. But many businesses say the SBA loans are not a good deal. They’re charging six percent interest, the same or near what owners’ original loans were set at, so it’s not helpful in many cases. Furthermore, SBA allows the loan to be paid off over 30 years, but that means a larger out-of-pocket interest payment.
“The government is basically profiting off our disaster,” said one frustrated business owner. Many of the provisions available to businesses after hurricanes Sandy and Katrina are not available to businesses today. Houston City Councilman Dave Martin and State Representative Dan Huberty have tried to help from the local and state government perspectives, but business owners say the federal government needs to step in and help. So far, that has not happened in a meaningful way.
Most businesses had comprehensive business insurance, but flood damage is not covered by those policies. Instead, businesses rely on the landlord to carry flood insurance. Some did, and some didn’t. Even if they did, the flood insurance only covers the structure and none of the contents owned by the business.
Small businesses really suffer in situations like this, Cardenas said. They don’t have the support that the larger corporate chains do. Furthermore, assets over five years old are depreciated, so many businesses are receiving pennies on the dollar for what they originally paid for items such as computers and other equipment.
“It’s nowhere near what we need to cover replacement value, so we’d be that much more in debt trying to pay for it all,” explained one business owner who has decided not to reopen.
Additionally, some owners are still carrying debt on their losses. Some have received local grants, like those offered by the Lake Houston Relief Committee for $10,000, and while they’re grateful, say that they have hundreds of thousands of dollars in losses, and there is just not a financial justification to reopen. Others say that dealing with the flood aftermath has been so traumatic, they just don’t have the wherewithal to do it, and fear that until the San Jacinto River dredging is done and the San Jacinto River Authority issues are dealt with, they have no guarantee that this won’t happen every time the area gets heavy rain.
Some businesses have decided to not have a storefront, instead relying on their online business. Two examples are Famous Footwear in the old H-E-B center and Payless Shoes in Humble. Verizon Wireless and New Balance in Humble have also made similar decisions.
Many businesses have decided to move to a new location or to expand at their current location. Gadget MD, once near Alspaugh’s, has moved to the new H-E-B complex near Torchy’s. Fabulous Things did not reopen, and VaVa Bloom moved across the street to expand their store. Kingwood Photo Lab moved from the Alspaugh center to 4003 Rustic Woods. Toys 'R' Us on U.S. 59 in Humble will reopen as a toy outlet location, the largest in North Houston.
Many, like Wild Birds Unlimited and Coco Crepes, Waffles and Coffee never even opened their doors before the floodwaters hit, but they’ve opened or are opening soon. The businesses say the H-E-B location is great, and the other larger business openings like Torchy’s, Mama Fu’s, Mod Pizza, Pholicious and Starbucks are key to attracting business to their stores.
Some businesses have not made a decision whether to reopen, or haven’t communicated with the chamber regarding their plans. Local Print Solutions will likely not reopen in their current location, and they’re contemplating whether they’ll reopen at all; they might expand their business into other areas.
There is no word on when Kelsey-Seybold in Town Center will reopen, and many Kingwood residents have also wondered about Kingwood Bagel and the McDonald’s in Town Center. The chamber and the owner have not been in touch, but Cardenas speculates that they’re probably looking at revenue and determining whether the area can continue to support two McDonald’s (there is another restaurant on Northpark Drive). Cardenas also commented that the Town Center McDonald’s used to be a Boston Market, so it does not fit the current McDonald’s footprint, and the owners might be considering a full-scale remodel to update the location per the national corporate standards.
Many businesses will be back, but it is a long and arduous process. La Madeleine will reopen in April. Ryan Fennell, branch manager of the Harris County Public Library Kingwood Branch, says the library will be back as soon as possible, but they have no specific opening date at this time.
“We’re working on it daily. The county is working on the building, and we’ve begun ordering books and collections,” Fennell said. He said that he is grateful to the Kingwood Community Center for providing space to have a pop-up library two days per week. They’ve been able to host children’s story time, accept returns and offer books for checkout. They’ve just started an adult program as well. Fennell says that days and times vary, because they’re sharing the center with other activities like voting now, but that interested parties can check the schedule at the Kingwood library website, hcpl.net/location/kingwood-branch-library.
Some Kings Harbor businesses like Capital Title are reopened. Businesses near the title company are in the 500-year flood plain, while restaurants like Sharky’s, Chimichurri’s, Zammitti’s and Raffa’s are not. The flood plain designation makes a big difference in how quickly insurance negotiations and claims are being handled. Some businesses, like Jennika’s, have decided not to reopen, but the chamber expects most to eventually be back.
Tony and Leslie Raffa desperately want to reopen their restaurant, but it is slow going. They explained that while their business had several insurance policies, it was the property manager that held the flood policy, and the process in very slow going. They are planning on opening in the spring, but it could be even later.
Hamblen Road businesses were devastated by Harvey floodwaters and most will not reopen. Most of these businesses were also affected by the Memorial Day flood as well as past floods, and the devastation of the multiple events has led to the tough decision to close their doors. However, stalwarts like El Rio Mexican restaurant and Legacy Fitness have reopened in other locations.
Finally, business owners say that just because they’ve reopened, it doesn’t mean that everything is necessarily fixed. Gnome Sweet Gnome co-owner Sally Kelly bought her share of the store in June, and it flooded in August. They lost almost everything. The two owners are putting personal money into rebuilding rather than taking out SBA loans. “Financially it’s tough. We went to the June Dallas market last year, bought items, then we flooded in August. The bills for those items came due. We had just thrown them all away, then we had to pay for them and then buy them all over again,” Kelly said.
Kelly remarked that their landlord had been instrumental in their quick reopening; she is grateful because she knows so many businesses that aren’t so lucky. Some landlords are still charging rent, even though the spaces are unusable.
Kelly said they are both incredibly exhausted, but glad to be back. The hard work continues and their families are still sacrificing because of their long hours still spent in the rebuilding and recovery process. Kelly says the community has been incredibly supportive.
“So many people came in to shop in November and December. Our holiday retail is so important for our store,” she said. The owners have recently returned from both the Atlanta and Dallas markets, and are excited to share their new inventory. Both owners are longtime Kingwood residents and raised their children here.
Kelly remarked, “We want people to think of our store as a hometown store they can come visit and just relax. It’s so important for our community to have places like that right now.”