Cover Story

By Megan Hill

Contributing writer

Houston. Baton Rouge. Dallas. San Antonio. Memphis. Atlanta.

These popular destinations have absorbed most of the 300,000 households permanently displaced by Hurricane Katrina.

But don’t forget Mobile.

Some 9,000 people have moved to the port city permanently, according to U.S. Postal Service data. And the effects of this migration have been significant.

Mobile was a temporary destination for many – artists, patients, the University of New Orleans baseball team, Tulane University’s football team, the Times-Picayune, WVUE Fox Channel 8, boats seeking repairs and countless others.

Even though Bayou La Batre and Dauphin Island were slammed by the storm and many skewered County Commissioner Mike Dean for his recent comments that Katrina “really helped Mobile County,” it’s true that on a whole, Mobile looks to profit long-term.

While there are certainly local individuals for whom the hurricane was a very real disaster, the overall area economy wasn’t left wrecked and in need of one of those ubiquitous blue tarps. Real estate sales are up, apartments are full, the economy is strong and even Mobile’s most famous celebration reaped the benefits of a devastated Gulf Coast.

The real estate boom

While the quick rash of home sales immediately following Hurricane Katrina is largely over, realtors and builders in Mobile are projecting long-term impacts across the area.

Jeffrey H. Newman, chief executive of the Mobile Area Association of Realtors, said Mobile’s median-level homes went fast just following the disaster.

“We found a slight bump in the weeks immediately following Katrina,” he said. Mobile has seen a strong real estate market in recent years, but in 2005 the number of homes sold increased dramatically. Homes sold jumped from 4,697 in 2004 to 5,587 in 2005, or a 19 percent increase.

“A good bit can be attributed to the hurricane. It definitely had an impact,” Newman said.

Most of the homes bought were small-to-medium-sized in the Theodore and Tillman’s Corner area, where median home prices made purchases attractive to Gulf Coast refugees.

“A lot of that had to do with people not having insurance by then, so it was easier to buy a smaller home,” Newman said.

Mobile was a popular place to move to for two reasons. First, its sheer proximity to the damaged areas made it an obvious choice.

“Mobile is the closest large town that was not very adversely affected,” Newman said. But he added that a big reason is that housing here is enticing because the median price for a home in the Mobile area – $125,000 – is 68 percent of the national median price.

“Our housing is very affordable,” he said, especially compared to areas like New Orleans.

For those who weren’t able or weren’t ready for anything permanent in Mobile, home and apartment rentals provided a good alternative to purchasing.

“There are virtually no vacancies as far as rental homes go,” said Newman. He said the influx of contractors and FEMA workers contributed to the gobbling up of rentals.

“Everything was pretty much immediately swallowed, between insurance adjusters, FEMA adjusters and displaced individuals,” said Ellen Maxime, vice president of property management at Delaney Development, a Mobile property management company. Delaney has over 2,000 apartments, 97 percent of which are occupied, not including holdings not yet taken by tenants.

“If we have any vacancies at all, we probably already have people waiting to move in,” Maxime said.

These apartments were already pretty full before the hurricane hit, so there weren’t a lot available, Maxime said. Many people are living in apartments that are smaller than what they prefer, but they had to take what they could get.

“People were not able to be choosy. If there was something to be had, they took it,” she said. Most of these people probably came from Mississippi and are commuting to jobs at home.

Newman believes Mobile will feel the effects of the real estate boom for two or three years down the road.

“We think it’s going to bring on a big boom in new construction because there’s such a demand,” he said. “We think houses will appreciate faster because our inventory of available houses is going down. That little bump in sales of lower-price-range houses has taken a lot of them out of the market. There is a lot of money coming into the area, so sales will continue at a real brisk pace.”

Opportunities for the port

Mobile’s port suffered $34 million in damage, but its resilience and quick recovery are likely to make it more attractive down the line. The Port of Mobile was operating at full capacity before the storm, so it wasn’t able to pick up much additional business, said James K. Lyons, chief executive of the Alabama State Port Authority. He said they’ve had to turn down more business than they’ve picked up.

Lyons was hesitant to call Katrina beneficial to the port as a whole.

“Overall, we do not view the storm as beneficial. We gained little business, but I am not sure that the gains will offset the uninsured losses or the tremendous amount of effort and personal time that it is taking to deal with the aftermath,” he said.

But the city’s port may still gain somewhat in the long run from the storm, Lyons said.

The port was up and running within ten days after the storm hit and this may help in the future.

“Our infrastructure is pretty hearty and thus more reliable,” Lyons said. “In today’s shipping world, reliability is very important. We were handling cargo within a few days of the storm and almost at full speed within two weeks.”

Three major chiller-freeze warehouses in New Orleans, Gulfport and Pascagoula were wiped out by Katrina, so Mobile picked up 30 percent more traffic in frozen poultry.

Long term, the benefits will not come in extra business but in reputation, said Lyons.

“Any long-range gains would accrue with the knowledge that our infrastructure is more resilient and that we can get back in operation faster.”

Mardi Gras: a bigger party

A bigger Mardi Gras for Mobile was prophesized across the country, as both hotel shortages and a scaled-down show in New Orleans caused Mobile to expect more revelers.

“Naturally we were thrust into the spotlight because of Katrina and the shortened Mardi Gras season in New Orleans,” said Leon Maisel, president and CEO of Mobile Bay Convention and Visitor’s Bureau.

And indeed, a larger Mardi Gras was in the cards for Mobile. This year’s celebration reined in over 1 million people, up from last year’s estimate of 850,000 on the season, according to Maisel. Fat Tuesday specifically saw 244,000, up from 170,000 in 2005. Overall, that comes to a 19 percent increase for the season and a 44 percent increase on Mardi Gras Day, Maisel said.

The early signs of a bigger party were increased inquiries on the bureau’s Web site and more calls to its 800 number, said Maisel. And he says the larger crowd didn’t hurt Mobile’s claim to fame: its family-oriented Mardi Gras.

“Many of the bookings according to the hotels were families. We had our usual mix of adult visitors along with family visitors,” Maisel said.

And more people means more money for Mobile.

“It could boost our share 8 to 10 percent,” Maisel estimated. “It will boost the $400 million economic impact for sure.”

Long-term, Mobile looks to gain considerably from its center-stage spotlight at the Mardi Gras party.

“The positive result of the Katrina disaster is our higher profile as a major upper Gulf Coast destination,” said Maisel. “Mardi Gras is only a part of that picture. I do foresee us gaining market share in the convention, cruise and event business from our neighbors both east and west of Mobile Bay.”

The Mobile CVB marketed the city a little differently this year. Many local attractions were suffering and visitor numbers were down to places such as Bellingrath Gardens and the Exploreum. Usually, the attractions market themselves and do so locally. This time around, they partnered with the CVB and were marketed within a 150-200 mile radius, beginning in September and ending in March to boost numbers, said Harriet Sharer, communications coordinator at Mobile CVB.

“Not just a back-up plan”

And it worked. Not only did locals begin to act as tourists in their own city, but as early as October, more outside travelers were flocking to the Port City. Sharer said this resulted from a combination of the CVB’s marketing efforts, as well as people looking for alternatives to damaged Gulf Coast locations.

Sharer said it’s hard to connect conventions and the hurricane because these are booked in advance. But her office hopes traffic will pick up in that area, as well as with cruises.

While cruise lines wait for New Orleans to start accepting ships – it will reportedly do so beginning in October – Mobile hopes to pick up the slack.

“Our ship has sailed at capacity each time since coming here in October 2004. We hope that will show we do have the market to support more cruise ships in Mobile,” Sharer said.

She noted that being in the national media spotlight leading up to Mardi Gras as well as the bureau’s increased efforts to market Mobile as a viable tourist destination, will help the city in the long run.

“Mobile is not just a back-up plan,” Sharer said. She added that the health of the entire Gulf Coast is important for tourism in Mobile. “We see it as a Gulf Coast destination” where visitors will book two-week long excursions to the region, visiting New Orleans, Biloxi, Mobile and the beaches. Before the hurricane, people often overlooked Mobile. No longer. Mobile now has now gained the name recognition necessary to be a top destination, said Sharer.

“The hurricane created both some challenges and some opportunities for us,” she said. “We met them all face-on and have seen some encouraging results.”

Sharer recalled speaking with visitors from Oregon, New York and Philadelphia, who were impressed with Mardi Gras and with the city. They wanted to come to Mardi Gras, she said, but never considered Mobile until Katrina stunted the show in New Orleans. Now, they have a lasting good impression of Mobile.

“Many people I spoke with were impressed with how much there was to do in Mobile between parades – Exploreum, Ft. Conde, Carnival Museum, etc. – as well as being impressed by how clean our city was and how safe our Mardi Gras celebration is,” she said. “It’s (Hurricane Katrina) put us in such a spotlight and given us such recognition. That right there is priceless.”

A stronger economy

Overall, Mobile’s economy is strong. It’s on pace to out-perform the national economy in 2006, expecting to benefit from increased construction, higher sales tax revenues, low unemployment and more tourists.

Not all of this is due directly to Hurricane Katrina, though, said Dr. Semoon Chang, director for the Center for Business and Economic Research at the University of South Alabama.

“I would not attribute all to Katrina. Even before Katrina hit us, several large projects were in place for sound growth,” he said. He cited the construction of the RSA Tower, public school construction projects, the Choctaw Point Container Terminal and more. These projects will complement the benefits of Katrina.

Chang said he expects that the influx of recovery dollars, such as assistance from the federal government and the American Red Cross to continue for three years.

And while Mobile’s early sales tax increases have dropped off since they peaked in September, Chang predicts they will stay strong through August. And that’s saying a lot because the county’s tax revenue has made only minor gains, at best, in recent years.

“Katrina was such a massive storm, the impact will continue although the magnitude of the impact may decrease and fluctuate,” Chang said.

Many people in the area are still living in trailers, looking for jobs or otherwise living in Katrina’s aftermath. But the numbers show Mobile as a whole has built a stronger economy and spiced up its reputation as a bright spot along an otherwise devastated Gulf Coast. In the long run, that may turn prove to indeed be a golden lining on a very dark storm cloud.

Megan Hill is a contributing writer to Lagniappe. E-mail her at mahill@azalea.shc.edu

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