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One year after Hurricane Katrina smashed into Louisiana and the Gulf Coast, washing away hundreds of communities and lives, FOXNews.com's Catherine Donaldson-Evans visits Slidell, La., to find out firsthand how one town is determined to rebuild. This is the third of her series of exclusive reports.

SLIDELL, La. — One year after Hurricane Katrina turned towns like Slidell into wastelands, small businesses that took a terrible beating here are still struggling to survive. Some, like the beloved old-fashioned ice cream shop and soda fountain in the city’s historic district, will never recover.

Old Town Slidell Soda Shop owner Frank Jackson stayed in his house next door on August 29, 2005 and rode out the monster storm. He watched the floodwaters — which covered the town in a massive, tsunami-like wave after Lake Pontchartrain overflowed — engulf the little company he and his wife built from scratch in 1988. He saw Katrina take down friends’ and neighbors’ businesses all around him.

“You just watch it go and move on,” said Jackson standing near the rusty old soda fountain in what’s left of his shop. “You watch your friends’ businesses go, and there’s nothing you can do about it. You figure life will be different.”

Video: Katrina survivors describe life in Slidell, La., after the disaster

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And it was different for Jackson and his wife, Carla — totally different. He knew almost right away that the quaint old Slidell Soda Shop was gone for good.

For almost two decades Frank and Carla Jackson, both 53, had poured their hearts and souls into their popular restaurant, which Frank characterizes as an “intense” but fun business.

They hosted about 4,000 birthday parties — Polaroid snapshots of the kids still line the walls — and served homemade ice cream, as well as standard fare like burgers, hotdogs and fountain sodas.

There were no weekends off, and their days were long. But because they ran it together, close to home, they were able to spend time together and with their children.

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After Katrina left, the water slowly drained and Frank got his wife and sister-in-law safely out of town. He then set to work hauling out the spoils of his shop. The 800 gallons of souring ice cream and other perishables were the first to go.

“The storm came and took it all, and I just put it out on the curb, little by little,” he said. “I put about $200,000 of junk out on the street.”

The original intact menus still hang above the interior destruction. A handwritten sign advertising dollar-off banana splits was also untouched by the six-foot floodwaters. Jars of multicolored candies line high shelves; an inflatable, grinning jellybean spins from a ceiling fan.

Around the corner from the broken-down old soda shop is another business that had to close down: Slidell Cleaners, a 77-year-old family venture owned by close friends of the Jacksons.

The upstairs apartment, where owners Eric and Mary DuBuisson lived for the 24 years they ran the cleaners, came out of Katrina unscathed. But the downstairs sustained immense damage – too much to keep it going after all the recovery they’d done since the 1995 flood a decade earlier.

“This time, we had six feet of water and it destroyed everything … clothes, equipment,” said Eric DuBuisson, 56. “It was a real heartbreaker. We knew really quickly that there was no point [in trying to rebuild].”

The decision not to reopen came about two days after Katrina hit, he said, when the DuBuissons realized it would have cost between a quarter-million and a half-million dollars to bring Slidell Cleaners back.

“When both of you work in the same business and it all ends in one day, it’s very scary,” said Mary DuBuisson, 52.

“We seriously were afraid of bankruptcy,” added her husband. “I didn’t know what we were going to do.”

On top of their problems getting back on their feet professionally, the DuBuissons also had to worry about where to live, as the lakefront house where they’d planned to retire was flooded by three feet of Katrina water.

For eight months, they bunked at a friend’s home, then moved to a trailer furnished by the Federal Emergency Management Agency (FEMA). They’ve finally been able to get into their still-unfinished house, where they’re sleeping on mattresses on the floor and working on replacing all the furniture.

Though they did evacuate ahead of the hurricane’s arrival in Slidell — leaving in a van with only a few items and driving to wherever they could find a hotel room, which was near Baton Rouge — the DuBuissons were willing to do whatever it took to return to the town that is their home.

“We didn’t want to leave the community [permanently],” said Eric, whose family has been in the city for seven generations.

But in the days right after the hurricane they weren't able to come back to Slidell. Even more terrifying, they couldn’t make contact with anyone, even their two grown children.

Finally, they reached their daughter. Soon afterwards, they got back in touch with their son.

Eric and Mary returned to survey the damage Katrina had caused four days after the hurricane. And what they saw was the unthinkable.

“The devastation was just massive,” said Eric. “Trees were down on top of houses. As we approached, my wife and I couldn’t speak to each other. It was a really bad feeling.”

“We were ill,” added Mary.

At the Cleaners, equipment had been thrown against the wall. Spools of thread had unraveled in a wild cobweb formation. Wedding dresses, school band uniforms and other clothes were covered in mud. Mold, mildew and swamp grass were everywhere.

But they refused to give up.

They plan to restore the old Slidell Cleaners building — where leaves still stick to the white painted walls, a layer of dried mud covers everything and the smell of mildew permeates the air.

And they’ve redirected their cleaning business and clientele to a new venture, a cleaners at the St. Tammany Association of Retarded Citizens (STARC), which needed the services and was looking to expand.

They were up and running in May.

“We’re excited about the future,” said Eric.

One local Katrina-stricken venue with a loyal customer following, the Southside Café, was heavily flooded, restored and then completely decimated when a hurricane-damaged air conditioner sparked, caught on fire and burned the place to the ground.

Somehow owners Dan and Sharon De Blanc lived through eight months of unemployment and homelessness, staying first on their boat, and then in an apartment while their flooded condo was restored.

In the meantime, they rebuilt the favorite Slidell hangout for a second time. The Southside Café reopened in May to an even more bustling crowd than before.

“I’ve never been that sick in my life, but it’s all good now,” said Dan De Blanc, 62. “We’ve got a big, brand new restaurant and our business has just been extraordinary. We love it. It’s not like work, and that makes a big difference.”

As the anniversary of the storm approaches, the Jacksons still don’t have one place they call home, and move between Georgia and Long Island, N.Y.

Frank Jackson continues to come back to Slidell to do contracting work and stay in touch with old friends, but his wife Carla can’t bring herself to return. She was too haunted by what she saw during the hurricane.

The worst point was when Katrina sent a wall of lake water over this small city.

“You couldn’t go out in the street or you would have been swept away,” Jackson said. “My wife was hysterical.”

He remembers the pitch-black after Katrina left the region without power for hundreds of miles around, and the dead calm and quiet in the wake of the storm. He remembers wading in waste-high debris-filled water, and knocking into things floating in it because he couldn’t see.

And he remembers riding bicycles with Carla through the flooded streets to a drier part of town.

Today, some of the paint on the Soda Shop's porch railing is peeling, and part of its tin roof is twisted and punctured. Mangled wrought iron chairs lie in a confused pile in the property’s adjacent overgrown yard.

With all that work lost in a single day, Frank, who has since returned to his former profession doing construction, has managed to stay matter-of-fact and optimistic about the whole ordeal, and the future.

“I’m not very materialistic. It’s not that big a deal to me,” he said. “I know it sounds ridiculous.”

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It helped that he’d already survived something much harder personally shortly before the hurricane. His daughter’s baby had been born extremely premature and her prognosis was bleak. The infant had just gotten out of the hospital and was still tiny and very fragile when Katrina hit. She had to be evacuated with her family.

But the little girl turned out just fine.

“She’s perfect,” her grandfather said, grinning and wiping his brow in the heat of his gutted shop. “God gave me the thing I was praying for. He swapped out with me. You realize what’s important.”

Part I: One Year After Katrina, Slidell, La. Shows Gulf Coast’s Determination to Rebuild

Part II: Katrina-Battered Slidell, La., Must Also Rebuild Arts Scene

Part IV: Slidell, La., Sheriff Fights to Keep Down Crime After Helping Town Survive Hurricane Katrina

Part V: Southeastern Louisiana's Ecology Slowly Returns

Part VI: Schools in Slidell, La. Get Back on Their Feet

Part VII: Katrina Survivors Still Struggling With Storm's Psychological Toll

Part VIII: Slidell, La. Looks Back One Year After Hurricane Katrina