Ike's Economic Impact Could Total $16 Billion

Shrimpers and oystermen lost their boats to the muck. Tourist areas on the coast that should be bustling at the start of convention season are flattened. Lingering power outages are keeping offices empty and restaurants closed from Texas through the Midwest.

It will take months or more to tally Hurricane Ike's financial toll, but one thing is clear: Almost nobody in its path escaped unscathed.

"Every industry has been impacted by this storm," said Jeff Sjostrom, president of the Galveston Economic Development Partnership.

The storm carried hurricane-force winds as far north as Kentucky — which suffered its widest power outage in history — and driving rain clear into New England. More than 500,000 people remained without power Friday in Kentucky and Ohio; schools in Louisville, Ky., were to open Monday after Ike closed them for a week.

Risk Management Assessment Inc., which quantifies risks for insurance companies, estimated Ike's impact would land in the low end of the $6 billion to $16 billion in insured losses that the firm initially predicted.

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In Texas, power has been restored to more than half the customers who lost electricity during the storm. The fuel industry reports that more than 75 percent of retail stations have resumed operations and nearly 100 percent of terminals were operating, Gov. Rick Perry said.

"I urge Texans to stay where they are as local leaders work around the clock to bring necessary utilities back online," Perry said.

In Houston, where the booming energy industry has kept the nation's fourth-largest city economically stable in a nationwide slump, the outlook was downright positive. The city's port survived with minimal damage, and the Gulf of Mexico's oil and gas production barely took a dent.

"I'd rather be in Houston right now than Wall Street," said Leo Linbeck III, a Rice University professor.

Ike crashed ashore last weekend near the mouth of Galveston Bay, which produces about 15 million pounds of seafood each year. Shrimpers and oystermen there will practically have to start over. Even those who can salvage their trawlers will have to cope with the carpet of debris Ike dumped on the floor of the Gulf of Mexico.

Seafood wholesalers were hit hard, too. Ike destroyed the docks owned by Prestige Oysters Inc., one of the biggest harvesters in the Gulf, and slid its shrimp houses off their slabs. Owner Lisa Halili is wondering what to do with an arriving flock of immigrant fishermen who hold work visas but not jobs.

More than half the oysters sold in the eastern U.S. come from Louisiana and Texas. But Ike killed oyster reefs with waves of shocking saltwater, and officials say Ike's march through Galveston Bay will be catastrophic to an industry that generates more than $100 million annually.

"This storm, nobody realizes, has totally wiped out the industry," Halili said. "You can't buy an oyster reef."

Representatives of Louisiana's $2.6 billion seafood industry are asking the state's congressional delegation for federal relief. Early estimates indicate the industry sustained up to $300 million in economic losses to Hurricanes Gustav and Ike.

Cattle ranchers lost entire herds in some Texas counties, and animals not among the 4,000 killed right away may still die from eating the grass or drinking water tainted by salt.

More than 11,000 workers have filed unemployment insurance claims in the wake of Ike, according to the Texas Workforce Commission.

The longer it takes to reopen schools and businesses, the greater the risk that Galveston's best workers will be snapped up by other areas.

Downtown on Galveston's historic Strand, Eddie Ferre, whose father owns Luigi's restaurant, said it will be December before they can gut their flooded restaurant and reopen. All their waiters moved to Dallas and Corpus Christi to find new jobs, he said.

Even if Luigi's could reopen sooner, Ferre's mother, Martha, wondered who would come. Their upper-tier clientele comes from the big beach houses on the hard-hit western end of the island.

In the short term, the area will benefit from the huge influx of government recovery spending and insurance money, said Galveston County Judge Jim Yarbrough, the county's highest-ranking elected official. But the recovery will be uneven.

"Property values are probably going to take a punch in the stomach," and many people will initially be afraid to rebuild, Yarbrough said.

Most of Galveston's workforce is stuck off the island, which will remain closed to residents for at least another week. The city decided its water, sewer and electrical infrastructure was too badly damaged to support its population of nearly 60,000.

At the same time, out-of-state recovery crews stream onto the island every day, snapping up business that local companies need to stay afloat.

"Why can't we get our own people here?" asked Patricia Bolton-Legg, who runs Competitive Electric with her husband. "We get all of these out-of-towners here. They're going to take our business."

Ike slammed Galveston in the midst of a nearly decade-long economic renaissance. About $2.5 billion of new construction was under way when Ike swamped the narrow island, Sjostrom said. About 80 percent of the island's structures are still standing, so Galveston will not be starting from scratch.

Mayor Lyda Ann Thomas said she is optimistic that crowds could pack the city's downtown again as soon as late October.

"We've had a lot of storms here," she said. "People will come back."

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