Hurricane Irma expected to batter, boost Florida’s economy

Casey Logan
The News-Press
A giant tree at the entrance of Case Ybel Resort  blocked the road. Sanibel Island came through Hurricane Irma far better than was expected. They have trees down, now power and some flooding, but residents say that's better than the 15 feet of water the island was supposed to get.

Lisa Torres feels powerless, same as her Fort Myers duplex apartment.

She’s stuck, unsure whether she still has a job after Hurricane Irma barreled through Sunday.

Torres is worried about paying the bills, including the rent on the place in the working-class Pine Manor neighborhood that she shares with her two children.

Across Florida, millions of workers have lost wages because they weren’t able to work, and tens of thousands of businesses lost sales. Irma crushed hotels in the Keys and shattered signs and storefronts on both coasts. Some places were only bruised. 

For more coverage of Hurricane Irma and the storm's aftermath visit: news-press.com/hurricane.

Houses in Cudjoe Key show damage Wednesday, Sept. 13, 2017, days after hurricane Irma ripped through the Florida Keys.

Although many fishing boats in the Keys are expected to lose months of business, for example, other businesses may be up and running more quickly.

Christopher Westley, director of FGCU’s Regional Economic Research Institute, said Irma’s impact on the economy was devastating but no one yet knows the total costs.

“There were just too many businesses that were closed, people who left their jobs,” he said.

And there could be a silver lining – many businesses should be able to repair and reopen before season. But some of the earliest snowbirds, who often arrive in October, may delay their arrivals, hurting sales.

Also, experts say a shortage of construction workers will delay recovery, along with government bureaucracy and slow-moving or overtaxed insurance adjusters.

Feeling the pressure
 

Hurricane Irma: Cleanup underway to repair damages to The Dock at Crayton Cove after storm

Many businesses are struggling to get staff back in place and make repairs. Some are not close to reopening. Vin DePasquale, owner of The Dock at Crayton Cove on Naples Bay, said he expects his restaurant to be shuttered for seven weeks because of the extent of damage. His story is repeated across Florida.

In the long run, however, Southwest Florida’s seasonal economy will likely work to the region’s advantage.

“The hurricane might not be as damaging as it might be elsewhere because seasonal workers are about to ramp up their presence in the economy in about eight weeks and I see nothing to indicate that’s not going to happen again,” Westley said.

The Naples Beach Hotel & Golf Club is closed through next week, because crews are repairing damage to the Naples hotel following Hurricane Irma, Sept. 15, 2017.

While Collier County is expected to have a longer recovery time because it took the brunt of Irma’s assault in the region, places like Marco Island and Naples still have a couple of months to prepare for the start of season, when snowbirds and tourists flock to the area in search of warmer weather.

“By then much of the recovery there should be completed, but not completely,” Westley said. “Fifth Avenue will be Fifth Avenue by November.”

Organizer Vin DePasquale smiles while talking with friends Saturday, May 14, 2016 at Crayton Cove in Naples, Fla. The 40th, and presumably final Great Dock Canoe Race, concluded with a disco theme   ' because it started in 1977   'titled 'The Last Dance.' Hundreds showed up and dozens competed in themed, amateur, VIP and pro categories. Kim Kelsey and Anita Allen won the pro event with a time of 20:48 and 18:48 adjusted for a two minute handicap, since they were a mixed sex team. Best overall time was from father son tandem Peter Jenks, 60, and Casey Jenks, 31. (Corey Perrine/Staff)

DePasquale evacuated the area for a week. Upon returning, he surveyed the damage and estimated it will take six weeks to repair.

While insurance will help cover the cost of rebuilding, he doesn't have a policy for business interruption so he’ll have to eat those losses. His more than 75 employees will also take a hit.

More:Hurricane Irma: Lee County roads crews make progress with traffic lights and clearing roads

"If there is any blessing in this it’s that it happened in the slowest time of the year, as far as the business is concerned," he said. “It’s going to be hard on everyone.”

DePasquale said he'll reach out to other restaurants to see if his employees can find temporary jobs with them while he rebuilds.

The poolside chickee hut at the Quality Inn & Suites Golf Resort in Golden Gate was destroyed by Hurricane Irma.

He's not concerned the storm will put a damper on season, especially considering how fast the city is cleaning up.

“It won't be long before we'll all be back,” he said. “So if people are still looking for the charm of Naples, it will be here.”

Post-storm boom

Consumer spending is expected to shift, at least for a time, as priorities change after a hurricane.

Westley provided an example: “So as before you were thinking about going to Bonefish Grill for dinner or you were thinking about buying a gym membership, now those things are set aside because you value replacing the screens on your porch or you value clearing the tree from your front yard.”

The economist expects the region’s workforce, particularly those in construction and service sectors such as roofers, landscape service workers and others, will see a significant positive impact.

“Those firms are going to receive a boon,” he said.

More:Hurricane Irma update: Farmers assessing damage; U.S. Sugar reporting at least $20 million loss

After the storm passed, Torres’ employer – a fast-food restaurant in Cape Coral – started pressuring her to come to work, reminding her she wouldn’t be paid if she didn’t show up.

Torres responded, explaining she does not have power and has a child-care issue because schools are closed. Then the 33-year-old single mom learned Thursday afternoon that Lee County’s public schools will be closed for another week, introducing a longer-term child-care dilemma.

“I can’t leave my two kids alone in a hot box,” she wrote Thursday. “So I am going on one week of no work and running low on funds.”

Aerial photos show the damage left behind in Irma's wake Monday, Sept. 11, 2017, at the Holiday Manor neighborhood in Naples, Fla.

Torres, the assistant manager at her restaurant, was frustrated with her employer and still unsure Friday whether she has a job.

She left her apartment for a shelter before the storm because she lives in a mandatory evacuation zone. She communicated the information to her boss, who assured her it would be OK and that he would contact her with the next week’s schedule.

The tone of the communication, Torres said, changed after the hurricane had passed.

“So Tuesday I receive an email saying WHERE ARE YOU? YOU WILL NOT GET PAID SINCE YOU ARE NOT WORKING,” she wrote in a text message.

Several more attempts since Tuesday to reach the employer have proved fruitless.

“My job still hasn’t responded … So I take it as I’m fired and they don’t care what I am going thru (sic) … for my job to not even ask how I am or my family and not responding to my text is very disappointing!!”

More:Hurricane Irma update: In popular urban oases, trees appear hopelessly damaged, but will likely recover

Other workers seem to have fared better. South Seas Island Resort on Captiva, for example, employs more than 400 people this time of year.

Power returned to the resort Wednesday night, but there’s a lot of work to be done before the 300-acre property on nearly three miles of coastline can reopen Wednesday.

“We have 100, a little over 100 employees here, from managers to grounds crew to security, housekeeping, food and beverage people, getting things running,” said Verdell Ekberg, director of sales and marketing. “Pools, getting rooms ready, so on the 20th we open without a hitch. We have a pretty full squad here working their tails off.”

More:Hurricane Irma: Horticulture pickup starting, procedures set for Cape Coral, Lee County

Getting back to work

About 75 people live in employee housing this time of year, but the resort had to be evacuated before the storm and it took time for workers to return to assist with recovery. Anyone who needs additional time to take care of personal matters with their families or homes will get the time they need.

“Every employee has the opportunity to use their benefits, their vacation, their paid time off, they can use that as well as we get back to normal,” he said. “And payroll didn’t miss a beat.”

Ekberg does not think the hurricane will deter folks looking to stay there.

While South Seas prepares to reopen Wednesday, other hotel properties and leisure-dependent businesses further south face a longer road to recovery.

Golf courses and country clubs in the Naples area were hit hard. Some are starting to reopen, while managers of others say they’ll be closed indefinitely. That affects a variety of workers, from food and beverage managers and waiters to golf pros and golf cart handlers.

“Their maintenance people are going to be busy and crazy, but their clubhouse staff I think are going to be the ones that are going to be without a paycheck for a while,” said Jim Wall, spokesman for jobs-connector CareerSource Southwest Florida.

Without power, most of the resorts in the Naples area haven’t reopened to tourists, though many are still housing evacuees and first responders. Some have announced plans to reopen later this month, while others will take longer.

Gerald Sombright, Chef de Cuisine at the Ritz-Carlton on Marco Island, prepares oysters during the 2017 auction.

The two Ritz-Carlton hotels, for example, will remain shuttered until Oct. 1. Together they employ hundreds of workers.

“There is going to be some impact on employees not being able to work, particularly hourly employees, especially in food and beverage operations,” said JoNell Modys, a spokeswoman for the Naples, Marco Island Everglades Convention & Visitors Bureau.

Cindy Rohn owns Sharky’s, a casual, “family-style” restaurant on North Hutchinson Island, on the state’s east coast. It reopened Tuesday, one of the first restaurants to reopen on their part of the island.

As soon as it reopened, “we got slammed,” she said. “It was great.”

However, even the rush of business wasn’t enough to make up for the 3.5 days of lost business, plus the $1,000 cost to buy a generator and the $300-$400 cost of paying someone to board the windows up.

“It was definitely a loss,” she said.

Lisa White, deli manager at a Publix in St. Lucie County, is a salaried employee, so she did not lose income because of the hurricane. She did, however, work much harder to keep up with the demand for prepared food.

Her Publix reopened Monday. Between Monday and Tuesday, she estimates she cooked 600, eight-piece (5,600 hot wings and tenders) boxes of chicken.

Just after the store opened Monday, “we must have had at least 65 people … waiting in the chicken section just trying to get hot food,” she said.

White felt tired, but grateful.  

Construction takes time

Ken Simonson, chief economist of Associated General Contractors, a trade association in the nation’s construction industry, said it will take time for bigger projects to get done.

“This has had a tremendous regional impact, not just in Florida,” he said. “It really is too early to tell how much damage there is and how long it will take to restore basic infrastructure.”

Simonson has been encouraged, however, by the relative speed at which electrical service was being restored. Still, about 1.9 million utility customers remained without power in the state on Friday morning.

One thing he’d like people to understand as the recovery begins: “Actual construction takes a lot longer than people tend to expect.”

Part of the reason that’s the case is because of government bureaucracy. Although relief bills may quickly be passed by legislators, he said, much of it is earmarked for housing and overtime for emergency workers rather than for construction.

“Money for construction for public projects, whether schools or roads, water and sewer systems, that takes longer to pass and once it passes it takes time to get it to agencies to decide which projects get the funding and then awarded the contracts,” he said. “That public money tends to trickle out for construction.”

Recovery isn’t typically speedy either on private projects, where homeowners and business owners receive payments from insurance companies.

“That seldom covers the whole amount and there’s a deductible for hurricane losses,” he said.

On top of that, many people away from the coast do not carry flood insurance, meaning repairs to flood damage in many cases will have to come out-of-pocket.

“It’s often difficult or impossible for businesses and individuals to come up with enough money to do the reconstruction, particularly if they’ve lost their jobs and source of income in the interim,” he said. “A lot of construction or reconstruction, it’s delayed or doesn’t happen. And projects that would have happened without the storm sometimes get delayed or get cancelled outright.

Demand for labor remains a major issue that may also become greater.

“Contractors across the country are having trouble finding enough workers,” said Simonson, but there could be a benefit. “Because of this displacement and cancellation of deferral of projects, some people who would have been tied up on new construction will be available for this reconstruction.”

The national peak in construction employment was in 2006, then reached a low point in 2011. The hurricane could be a catalyst for workers looking to break into the industry by learning a trade.

“Companies are taking on people who don’t have the skill level they might have preferred,” he said.

Sean Snaith, director of the University of Central Florida’s Institute for Economic Competitiveness, is a little less confident about whether the hardest hit businesses will be able to snap back by season.

“In areas with significant damage, it’s going to be tough to rebuild in time in order to get things off without a hitch,” he said. “That could cause an issue and make it a little harder for the economy.”

That type of damage in this region is more prevalent in Collier County.

“If there’s a major reconstruction that needs to be done on a building or infrastructure that needs to be repaired or replaced, this could extend a month or two into the snowbird season,” he said.

Because of the scope of the damage, Snaith expects the cost from Hurricane Irma to easily surpass the $26 billion cost from Hurricane Andrew in 1992.

It’s possible, Snaith said, that the state could have a perception problem in the short term.

“Any time you have a natural disaster like this, you get at least a temporary falloff in visitation and for people outside the state and internationally, the geography is not as clear to them,” he said. “They see ‘Florida’ and ‘hurricane’ and they see these images and that sort of sticks in people’s minds.”

As those images fade, however, Florida will turn once again to its greatest assets, notably warm weather year-round, beaches and boating.

“The first Alberta clipper that makes its way into Canada, they’re going to be leaving for Fort Myers and Naples, you can bet that,” he said.

Building costs rising

Robert Dietz, chief economist of the National Association of Home Builders, said Florida’s building market has more demand than supply. Challenges include a lack of construction workers and a scarcity of buildable lots in some markets.

“The industry lost 1.5 million workers in the recession,” he said, speaking nationally. “We’ve gained back 700,000 since the low point. There’s a significant shortfall.”

That low point occurred in 2011. Hurricanes Harvey and Irma, he said, will cause construction delays.

“Single-family housing in Houston is quite large. There will be delays,” he said. “In Florida, about 10 percent of overall single-family construction, it too will be impacted due to delays. It’s going to have an impact on overall home building volume in the months ahead.”

Rebuilding or repairing will also be slowed by a lack of workers.

“More than 100,000 homes in Houston area will require 10,000 to 20,000 additional construction workers in that part of Texas,” he said. “Those workers will have to come from other parts of the Southeast. The scope and scale will be smaller in Florida.”

He expects prices on building materials to rise.

“We’re already hearing about increasing drywall prices, which is clearly an issue in replacing flood damage, PVC pipes, lumber,” he said.

As the business community gets back on its feet, it can take heart in the countless stories of Floridians coming together during this difficult time.

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That spirit revealed itself Wednesday in downtown Fort Myers, as King’s Kitchen owner Ozzie Morrobel reopened the restaurant with a skeleton crew.

“It was refreshing because people were thankful we were open,” he said. “I felt a sense of relief, really, for everyone. People were sharing their stories and asking everyone else, even strangers, how they were doing.”

Connect with reporter Casey Logan at clogan@news-press.com and on Twitter @caseylo. Laura Layden of the Naples Daily News and Lucas Daprile of Treasure Coast Newspapers contributed to this USA TODAY Network report.