Almost nothing has changed in downtown Fair Bluff since Hurricane Matthew sent the Lumber River out of its banks and three feet deep into the businesses that lined Main Street last October.
A few of the century-old buildings have been emptied out, but dried river mud coats the warped floors and black mold laces the walls. Ruined paint cans and brushes sit on the shelves at Ellis Meares & Son True Value, and in a shop where former mayor Randy Britt once sold women’s Sunday dresses, the chrome racks stand empty. With power still out to most of downtown, even the clock on the post outside what used to be Elvington Pharmacy is frozen in time.
“I do worry about the future of Fair Bluff,” said Micheal Green, who had MikeMike’s Computers at 1122 Main St. before the flood and has been unable to reopen. “I worry about it a lot.”
State and local officials are worried about Fair Bluff too, along with other towns and business districts in Eastern North Carolina that were hit hard by flooding from Hurricane Matthew at perhaps the most vulnerable time in their civic lives. Much of rural Eastern North Carolina had suffered huge losses when manufacturing jobs left the state in the 1980s and ’90s. That was followed by the devastation of Hurricane Floyd in 1999 and, starting in 2007, the Great Recession.
Then along came Hurricane Matthew, which damaged more than 19,000 businesses in the state and caused indirect losses at tens of thousands more, disproportionately hammering those in poor, rural, largely minority communities, according to a state report. Besides the physical damage the storm did to businesses – wrecking buildings, destroying inventory and equipment – Matthew took away potential customers when it displaced residents by flooding their houses as well.
Hurricane Matthew compounded the pressure already facing some of these communities and created circumstances that now challenge their very existence.
Patrick Woodie, president of The Rural Center
Fair Bluff, about 125 miles south of Raleigh near the South Carolina border, had 526 housing units in the 2010 census. Matthew severely damaged 109 homes, forcing residents to scatter.
Without a deliberate effort to bring back the people, businesses and institutions that made them up, at least a half-dozen towns or business districts struck by Matthew are at risk of fading away, rural advocates say.
“Hurricane Matthew compounded the pressure already facing some of these communities and created circumstances that now challenge their very existence,” said Patrick Woodie, president of The Rural Center, a private nonprofit that works to promote sound economic strategy in the state’s 80 rural counties. “Our hope is that our local leaders, in concert with regional and state partners, will focus their recovery efforts on preserving the unique character of our state’s small towns while actively seeking new opportunities for economic growth. It is in the best interests of our state to lift up all the people who call North Carolina’s small towns home.”
Bringing hurricane-damaged businesses back to life, and encouraging new ones to come into a flood-ravaged community, will require innovative economic development programs, advocates say, because existing programs have not worked for this disaster.
Few businesses approved for aid
With any disaster, the first priority of public aid is housing. The Federal Emergency Management Agency, which leads the response, has several programs to help uninsured and under-insured residents get into safe, sanitary housing, including grants that can pay for temporary shelter at hotels and minor repairs to homes. Homeowners can apply for low-interest loans from the federal Small Business Administration to make major repairs, and those who don’t qualify for loans sometimes are able to get grants or help from charitable groups such as churches that provide free labor and, in some cases, donated building materials.
Business owners have fewer places to turn for help and historically, none of those provide it for free.
Micheal Green, 41, learned that as he waited for the water to recede at MikeMike’s Computers after the storm. Green was born and raised in Fair Bluff, left to work for a while in Chicago, then returned to his Columbus County hometown to be close to his mom and other family. He started MikeMike’s in 2011 as a sideline to his state job. He left that job to run the computer repair shop once he had enough work, which came from neighbors and from customers as far away as Myrtle Beach.
Green rented his space on Main Street. He had no insurance on the business. If he had had any, it would not have been flood insurance; residents who have lived in Fair Bluff decades longer than Green say the Lumber River had flooded the town’s streets before, but never the buildings.
Green learned of the flooding through a friend’s pictures on Facebook, and immediately headed downtown to see what was happening.
“I waded through water about up to my waist,” he said. By then, about $50,000 worth of computers and other office equipment was floating around his shop. He saved his diplomas off the wall, and little else.
Dun & Bradstreet, an economic development and business research company, studied damage assessments from Hurricane Matthew and told the state Department of Commerce that 60 percent of the businesses most affected by the storm are retail and service industries, and that small, independently owned businesses in rural communities were disproportionately affected. Many were uninsured and lacked the capital it would take to rebuild.
So business owners are left to borrow from private investors or banks, if those will lend to them, or the SBA or nonprofits.
19,000 N.C. businesses were damaged or destroyed by Hurricane Matthew
60% of N.C. businesses affected by Hurricane Matthew are service and retail trades.
43% of businesses affected by the storm are expected to have trouble meeting financial obligations within 12 months, according to Dun & Bradstreet
Nearly two-thirds of the business owners who applied for disaster recovery loans from the federal Small Business Administration were denied loans
445 business disaster loans have been give out by SBA in North Carolina since Hurricane Matthew
$29.5 million is the value of those loans
After a disaster, the SBA makes long-term, low-interest business loans to help make repairs, replace inventory and equipment and make other investments necessary to reopen. The SBA also makes loans to cover business income lost as a result of a disaster.
In North Carolina, the Rural Center, the Small Business and Technology Development Center and the Community College Small Business Center Network also came together after Hurricane Matthew to offer interest-free loans of up to $15,000 for terms of 90 or 180 days.
“That bridge loan saved me,” said Michael Pinkston, who applied for a loan from the SBA to rebuild his downtown Fayetteville business, The Climbing Place, but knew it could be weeks or months before he would see the money. The short-term loan, he said, gave him hope and enough money to begin cleaning up the mess left by several feet of water from Cross Creek.
Overall, however, business participation in the SBA and the bridge loan programs were low after Hurricane Matthew. Carol Chastang, spokeswoman for the SBA in Washington, said just 1,166 businesses in North Carolina applied for disaster loans, and only 445 were approved, for a total of $29.5 million.
Barry Ryan, senior director of programs for The Rural Center, said just 15 bridge loans were made.
“A lot of businesses have been through this before, with Hurricane Floyd,” Ryan said, and some of them had just recently paid off SBA loans they took out to rebuild from that storm. “A loan isn’t what they want. They’re looking for something they won’t have to pay back.”
Ryan and others who work with applicants say the approval rate for business disaster loans was so low because many business owners could not demonstrate an ability to repay, either because their businesses were not profitable enough before the storm, or because they had never kept financial documents that would prove they were.
The application period for the bridge loans, and for SBA loans for physical damage from the storm, has passed. The SBA will accept applications for SBA loans to cover economic losses from Matthew through mid-August.
More help possible
Last week, the Department of Commerce finished taking public comment on its draft plan for helping Eastern North Carolina recover from Hurricane Matthew. The plan cites “unmet needs” that remain after the initial response from the federal and state governments in what it calls the core aspects of recovery: housing, infrastructure and economic development. It approaches these as interconnected and says investment must be made in all three for a community to recover.
According to the report, as of March 15, the state had nearly $1.8 billion in unmet hurricane recovery needs in those segments. That includes $263 million needed by businesses affected by the storm.
Also last week, the same three organizations that offered bridge loans immediately after Hurricane Matthew announced the creation of a Small Business Recovery Fund. It will make low-interest loans to businesses affected by Hurricane Matthew, the wildfires that happened last fall in Western North Carolina, Tropical Storm Julia or Tropical Storm Hermine, both of which hit the state’s coastal communities in September. Low-interest loans will be available for up to $250,000 for terms of up to 10 years, and businesses may qualify for deferred payments or up to two years with no interest.
Businesses turned down for SBA loans are not disqualified for loans from the Small Business Recovery Fund.
Gavin Smith, a professor in the City and Regional Planning Department at UNC and director of the U.S. Department of Homeland Security’s Coastal Resilience Center of Excellence, will help six hard-hit North Carolina communities figure out the best way to recover from Hurricane Matthew over the next year to two years. Identifying sources of money that could be used to help businesses will be only part of making sure places like Seven Springs, Princeville, Windsor, Kinston, Lumberton and Fair Bluff thrive for another century.
A bigger challenge will be helping each community find an identity, a niche, an attraction – something that makes people want to come there to work, live and visit, Smith said.
In Fair Bluff, that might mean making better use of the Lumber River, the very force that nearly obliterated the downtown. Already, there is a wooden river walk in the town that goes out over the black water, but it’s underused.
Micheal Green would like to see it get more traffic. He’d like anything that would bring people back to downtown Fair Bluff. If his landlord would repair the building where Green had his business, he’d move back and start taking in gadgets to repair.
“I miss it,” he said. “For me, it’s about the community, about helping people, about knowing my neighbors and saying hello to them in the morning. We’re like a family. That’s what I miss.”
How to get help
The North Carolina Small Business Recovery Fund, announced last week, will provides low-interest loans to businesses affected by Hurricane Matthew, the western N.C. wildfires, Tropical Storm Julia or Tropical Storm Hermine. Loans of $5,000 to to $250,000 are available at low interest rates for terms of up to 10 years. Businesses may qualify for up to two years with no interest and/or deferred payments. The fund provides gap financing as a complement to Small Business Administration and other disaster recovery programs. An SBA turndown does not disqualify applicants for these funds.
The program is a partnership of the North Carolina Rural Economic Development Center, the Small Business and Technology Development Center and the Community College Small Business Center Network. To learn more or to apply, visit www.ncruralcenter.org/recovery or call the Rural Center at 919-250-4314.
For information about loans from the federal Small Business Administration, go to bit.ly/2bsWlqF.