Floodwaters are just beginning to recede, but residents of this waterlogged region are being told not to despair: A flood of money is on its way.
Hundreds of millions of dollars are starting to flow into the region from insurance companies and federal aid programs. A building boom is sure to follow.
Leaders of other communities ravaged by natural disasters say the money is a chance for Grand Forks to come back stronger than ever.
“I can tell the residents of Grand Forks that they will recover,” said Mayor Joe Riley of Charleston, S.C., which was devastated by Hurricane Hugo in 1989. “They will recover completely, and it will happen more quickly than they think possible.”
Communities such as Charleston, Rapid City, S.D., and Homestead, Fla., all have dealt with the rebuilding issues now facing Grand Forks and East Grand Forks.
“I don’t see this as anything but a long-term plus,” said Jim Lynch, general manager of the Rydell’s car dealerships in Grand Forks. The community now has a chance to create a vision for its future and be a more business-friendly environment, he said.
“If it is handled right, we can be a thriving community and take advantage of opportunities that have slipped by us in the past.”
Before the Grand Forks area rebuilds, it has to have a community to build for, local leaders say. Residents will only come back if there are jobs available.
Local organizations that escaped direct damage are rallying to help their less fortunate peers.
A local institution has offered businesses office space. The Greater North Dakota Association also has established the Grand Forks Region Business Recovery Fund — one of several such funds already launched.
“We need to help business rebuild and thrive,” said Jack Carroll, chairman of the Grand Forks Chamber of Commerce. “We have some of those resources in place.”
In Homestead, an area of 134,000 about 20 miles south of Miami, 97 percent of the businesses were closed after Hurricane Andrew slammed the coast on Aug. 24, 1992.
“You have to get those folks back to work,” said Steve Cranman, executive director of the Perrine-Cutler Ridge Council in Florida, an economic development organization started after the hurricane to rebuild that area’s economy.
“Drawing unemployment isn’t the answer. Even if they are makeshift jobs, they are going to keep people there,” he said.
The Grand Forks region historically has had a low unemployment rate. That could change if people can’t return to their jobs.
But with the amount of work that needs to be done, “the employment opportunities will be plentiful,” said Larry Anderson, regional director for Job Service North Dakota. “It really depends on how many companies re-establish themselves and the workers they can use.”
Job Service already has applied for a $1 million dislocated worker grant, Anderson said. This will provide temporary jobs cleaning and repairing infrastructure.
Rebuilding entire communities will require a lot of workers. Local contractors don’t have the workers or the equipment to handle it all. Contractors across the nation will be lining up to work in the region.
Local companies aren’t worried about competition, said Jeff Wilson, general manager of Vilandre’s Heating, Air Conditioning and Plumbing in Grand Forks.
“We’ll need all the help we can get,” Wilson said. “There’s enough work to go around.”
The influx of millions in recovery money will provide an instant boost to local economies. The hottest items on store shelves will be building supplies, and local stores are trucking in extra supplies and adding employees.
At Menards Cashway Lumber in Grand Forks, 30 workers are being added to the staff of 150, said manager Jim Celius. “The main thing is to keep the freight coming in, and that means adding to the staff.”
After disasters, a building supply shortage often drives prices through the roof. Many regional or national companies have enough purchasing power to keep the trucks rolling, but smaller stores could be hurt if they have to rebuild or run low on materials.
The rush on supplies also can lead to price gouging. Although North Dakota and Grand Forks don’t have laws barring the practice, other communities may have them or have the authority to initiate them. In some cases, price gouging could fall under the state’s consumer fraud law.
In addition to building materials, big-ticket item sales of vehicles, appliances and furniture will have regional merchants smiling.
“There’s always the hot item,” Cranman said. “Following Hurricane Hugo, we saw what I call the `Jacuzzi effect,’ as a whole host of folks went out and bought them. (After Andrew) In Miami, they were selling cellular phones like crazy.”
Retailers who can get started the quickest will benefit the most. “Whoever was the first up and running made out like a bandit,” Cranman said.
And with all the money changing hands, scam artists are sure to be flocking to the city, taking advantage of stunned residents trying to return to some sense of normalcy.
“There’s always a bad person in the crowd to take advantage of others’ misfortune,” Riley said.
Much of the new money will be spent rebuilding homes or buying new ones.
Preliminary estimates show property damage at a whopping $775 million in Grand Forks/East Grand Forks alone.
But it’s too early to tell what the local housing market will look like. Grand Forks might alter the zoning in residential areas and FEMA has specific requirements for rebuilding after a disaster.
“There are a lot of unknowns,” said Tim Crary of Crary Homes and Real Estate. “We have had an awful lot of phone calls to see what we have available.”
Rapid City drastically changed its city’s look after 1972 flooding ravaged the community, killing 200. The city relocated about 14,000 properties out of the flood plain and turned it into recreational areas.
“That’s one of our city’s greatest assets now, a 5-mile park along Rapid Creek,” said Bonnie Hughes, Rapid City community development director who came to Rapid City right after the flood to work with the city’s planning department.
Rapid City’s case is similar to the situation in Grand Forks because city officials may decide to change the zoning of the city. If they do, that will create a building boom on the city’s outskirts.
Crary is one of the developers on the city’s edge. He’s already sold a home in the Johnson addition in south Grand Forks. He doesn’t expect housing prices to jump.
“I think prices will hold steady,” he said. “We still will probably need, now more than ever, those houses in the $90,000 to $110,000 price range.”
When the initial building boom is over, local economies can suffer a post-boom letdown. Having a long-term economic strategy in place allowed the Homestead area to bounce back, Cranman said.
“Everybody is going to be focusing on cleaning up, and what really needs to be thrown in the mix is long-term programs and long-term thinking,” he said.
The Florida Legislature played a role in the recovery. Lawmakers decided to capture the extra sales tax revenue generated by the building boom after the hurricane and direct that money — $600 million over five years — to local recovery efforts. Minnesota and North Dakota lawmakers may want to address those issues, he said.
