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August 27th, 2009
04:24 PM ET

After the Storm: New Orleans' economic rebirth

Sean Callebs and Jason Morris
CNN

While much of the nation struggles mightily to claw its way out of the punishing recession, New Orleans' rebirth is taking shape and bucking the national trend of an economic downturn. Visitors here will notice a steady flow of commercial and residential construction that is becoming a daily part of the city's life. In many ways, the billions of dollars that poured into New Orleans in the aftermath of Katrina is providing a huge economic buffer.

We all know the horrible statistics from when Hurricane Katrina nearly wiped New Orleans off the face of the map. More than 1800 lives were lost, 80 percent of the city was left under water, and the devastation left an estimated $100 billion in damage.

For the locals, the recession was the storm, and the stimulus was the influx of billions of dollars of federal and private money that continues to pour in and provide an economic buffer. This American city suffered a dramatic blow. After Katrina, close to 80,000 homes had to be rebuilt, attracting legions of construction workers and contractors. The effort helped to create jobs, and keep the city's unemployment rate at about 7.2 percent, while the national average dipped to around 9 percent. And even though the value of houses has plummeted nationwide, home prices in New Orleans have actually increased by about 1.1percent from 2008 to 2009.

"There's a significant amount of federal spending that is still going on here that is related to the flood catastrophe. And in many ways the city is benefiting from that, and propping us up. We're against the downward ties of the macro economy," says Sean Cummings, a life long New Orleanian, local developer, and hotel owner.

Jazz-trumpet great Irvin Mayfield just opened a jazz club in the Royal Sonesta hotel in the heart of the French Quarter, but he knows that even though many parts of the city seem "normal," there is still a tremendous amount of work to do.

Mayfield is a Commissioner for the New Orleans Redevelopment Association, and he has played a large part in working with the city to rebuild homes and businesses. "The passion is about us investing in ourselves and city, and redevelopment is just another word for self investment in citizens. And I think that passion has always been important to New Orleans, we are trying to transport that passion of music and food to trying to rebuild our neighborhoods," Mayfield said. "New Orleans is a laboratory city, New Orleans is imaginative, and we are trying a lot of things and going to the drawing board."

The New Orleans economy has always been based on tourism and heavy industry but after Katrina, a number of tax breaks are giving entrepreneurs and investors incentives to move here and open up shop. Sean Cummings is a big part of that movement. To help his city come back, the local investor launched Startup New Orleans, one of many organizations that supports young businesses development.

His loft-style building in the business district is home to an upstart alternative energy company, a new online exchange for business receivables, and a start-up music licensing firm among many others. "There's a transformation going on here, it's a shift from a tourism and research based economy in the 20th century, to one that will be in the 21st century driven by artisans and entrepreneurs," said Cummings.

Another non-profit organization helping to re-invent the city is the Idea Village, who has a building called the I.P. (Intellectual Property) which serves as a hub for technology businesses and innovation.

Tim Williamson co-founded The Idea Village, “If you look at the people that have come since Katrina, there has been this influx of talent who has come to New Orleans, initially to help, but now they are here to stay and live and to grow new companies, Williamson said. ” This is a once in a lifetime opportunity to reinvent an American city. So with what’s going on in the country, and what’s going on in other economies, New Orleans is kind of counter-cyclical.”

Michael Hecht, President and CEO of Greater New Orleans, Inc., points out that as the rest of the country has been hit with the worst economic events since pre-depression, New Orleans continues to add new jobs and business. "Creative professionals can thrive in an environment like this, because we've got the culture, we've got the cheaper labor costs for businesses that want to hire programmers, and we've got world beating incentives now."

But of course not everything in New Orleans is perfect. New residents know about all of the lingering, deep-rooted problems with which locals have been dealing long before Katrina. The crime rate continues to increase, the education system is poor overall, and some parts of the city aren't even rebuilt. But many are convinced the positive gains outweigh these issues.

Nic Perkin is the President of The Receivables Exchange, one of the start-up companies that has taken advantage of the New Orleans global brand. "To have an operation like this would be literally five, six, seven times more to do in New York, or San Francisco. The quality of life that we have here, you can live exceptionally well for a start up salary."

Another big question is sustainability – and whether or not these new ventures will be able to transform the city in the long run. Also, will the economic bubble eventually burst for New Orleans when the federal and non-profit money dry up?

Irvin Mayfield knows that even though there's been a lot of progress, there is still a tremendous amount of work to do.

"I think a lot of people who see this will say look you guys have been at this for four years, why isn't this done already? And I think people really need to understand the volume of things that have been done, and are doing."

Program Note: Four years after Katrina, what is New Orleans like now? Some residents continue to face challenges as the Big Easy keeps trying to rebuild. Take a look at In Depth: After the Storm. And to learn about ways you can make a difference, visit Impact Your World.

soundoff (23 Responses)
  1. Jaci

    The State of Louisiana is responsible for Katrina damage along their coasts. For people to live below the sea level are asking for trouble. A temporary lifestyle is in order if you do. I love New Orleans and I'm so sorry Katrina happened.

    August 28, 2009 at 6:33 am |
  2. Joseph Edgecombe, Boston

    The City of New Orleans faces the challenge of making progressive strives on limited funds which may not meet the programmed goals of many of the plans which have been created and constructed as the means of planning the agenda and formula to regenerate and develop a new…New Orleans.
    Many victims of the Katrina Hurricane have felt left-out and left behind by the US government because of poor reaction and poor response technically and administratively. Repeating in a sense the issues of the civil rights movement some 40 years later.
    and Apprroximoaly 140 years after the civil war….

    Now the challenge of America in rebuilding new Orleans is also rebuilding confidence in our American government and American society.

    August 28, 2009 at 1:43 am |
  3. Joseph Edgecombe, Boston

    I was there producing a doc. in 2007, the is still much work to be done , but i am glad th see the progress,

    August 28, 2009 at 1:36 am |
  4. Charlotte T

    what happened to New Orleans when Katrina hit was a tragedy..but because of the recession, cities that where rebuilding themselves seemed like they would hit a dead end. however i am glad to see that during this recession there are jobs available and the road to recovery is in the clear. as you mentioned that the education system is poor overall, is there any possible way that some of the money given to rebuild the city would be given to the schools education program to create programs that would help those students? because i think that education should also be a priority.

    August 28, 2009 at 12:56 am |
  5. Tanesha Allen

    Everyone no the hurt and pain that New Orleans went through when Katrina hit. Thats why i'm so happy to her that there finally getting back on there feet. Also I would like to show love to everyone that was from New Orlean because I no its going to be emotional going back there and seeing your city destroyed. An going back and knowing that some people didnt make it out to see another day so don't take life for granted. I wish New Orleans the best wishes and i hope they are able to put it back together.

    August 28, 2009 at 12:29 am |
  6. ANDREA GASTON

    what can we do to help katrin victims and the families of the katrina victims

    August 28, 2009 at 12:01 am |
  7. Desiree

    Im very happy that New Orleans is being rebuilt. Has anyone even wondered about the suburbs of New Orleans? I am always hearing about the 9th ward and this new Musicians village. THere are still many people in Jefferson Parish who's lives are in a shamble and have tio live in unfinished homes from being ripped off by contractors.

    August 27, 2009 at 11:40 pm |
  8. Alex Caemmerer

    Anderson–I have recently published a book on New Orleans architecture–" Houses of New Orleans", by Alex Caemmerer, Schiffer Publishiing Co, a collection of 120 colored photos of 19th century domestic architecture, with emphasis on shotgun houses, I wanted to send a copy to you but I was unable to find an address where it could be sent and get to you. I want you to have a copy–either tell me where i could send one or go to Barnes and Noble or Arcadia Books in New Orleans. I know you would enjoy this book! Alex Caemmerer.

    August 27, 2009 at 11:03 pm |
  9. James

    Experts say the levees can not with-stand another cat4 hurricane. Why, and by what authority, are we using tax payer money to rebuild in the same area? How can you legally take my money and give it to someone that wants to live below sea level?

    August 27, 2009 at 10:58 pm |
  10. Annie Kate

    Anderson

    Glad you went back to NOLA today and will let us all know about how it is doing. I hope that someone will go back to Waveland and Bay St. Louis and Biloxi, etc. in Mississippi and let us know how things are going there or if they have been so overshadowed by NOLA that they haven't gotten the help they need. They took the brunt of the storm and sustained heavy damage and fatalities – I hope they aren't forgotten. I'm afraid from some of the comments on this post that they feel like they have been. Hope you can catch up with these folks too – especially Myrtle. Thanks for not forgetting.

    August 27, 2009 at 9:31 pm |
  11. Sue

    I recently spent one week in your fine city with a group of Catholic High School girls on a mission trip. I have traveled so many places in my life and am fortunate to have experienced many things. This experience BY FAR was my most life changing and fulfilling! Thank you for allowing us to be a part of your "rebirth" and welcoming us with open arms and smiling faces. The strength and resolve of the people of New Orleans is truly inspiring and unbelievable. We'll be back to help again next year.

    August 27, 2009 at 4:37 pm |
  12. Mary

    Please remember, these people were told to evacuate the city and too may stayed put, that's were the 1800 comes from.
    Also their mayor Nagin did nothing to help his own town, he let school buses sit parked in their lots.
    There has to be personal responsibily here to save yourself.
    I see Mr. Garvin J Turnage did the responsible thing and left his town.

    August 27, 2009 at 3:17 pm |
  13. VITA ZEMAITIS

    After Katrina 80 percent of New Orleans was under water. Restoring wetlands and repairing levees would seem to be first concern.
    Expanded drilling in the area has altered the bottom of the Gulf and the coastline. Energy bill in 2005, exempted many oil companies from environmental laws. Drilling companies should confirm to special restrictions and be assessed for damages in the area. Environmental energy laws should be enforced, even as Federal Funding is used for rebuilding.

    August 27, 2009 at 2:31 pm |
  14. Lou

    Where can we find reliable projection figures for the time frame for when the Federal money will dry up for New Orleans ?

    August 27, 2009 at 2:03 pm |
  15. TK

    Thanks for the warm & fuzzy update on New Orleans... we are thankful that our city is still on the map and that funding has helped revived it but only one school has been rebuilt since Katrina. The only hospitals in operation are those run by the universities downtown. It's just that our very basics aren't even on the priority list, or so it seems. My old elementary school, Sherwood Forest, lonely waits for life, not sure if any its own infrastructure would be strong enough for the wait or would it just simply crumble away unnoticed. The neighborhood around there is still devastated with scars of Katrina. You can smell Katrina, taste it here. Even the schools that are in operation, like Einstein Elementary, doesn't meet basic conditions for our children. If there wasn't cars parked and kids around there, you would think it's been abandoned too. So yes, there is an economic rebirth on the other side of the city that hopefully will be contagious.

    August 27, 2009 at 2:00 pm |
  16. Su, Fort Lee, NJ

    Hi Anderson!
    Returning to New Orleans must be so emotional for you for many reasons...
    Did you have a chance to re-visit Francis T. Nicholls school? I wonder how the students are coping?

    August 27, 2009 at 1:21 pm |
  17. Garvin J Turnage

    On Aug 29 2005 my life and my hole family life changed .We lived in Waveland Ms. we left that Sun and took 8 to 9 hours to get to Panama City Beach Fl. were the road ended.Wen we went to Sleep that moring we were thanking that we would be home in a week or too that was 4 years ago.And in those days of Hurrican Katrina we ask questions and no one had a answer for the people of Mississippi, tell one day Mr.Anderson Cooper gave us that info that we so long waited for.Every one was gaveing info on New Orleans but not on Mississippi(Waveland were she hit .).We waited and Mr Cooper gave us that info,Thank you for that.Me and my family made it throu these 4 years very well puting our lives back toghter.Thank you Mr.A Copper

    August 27, 2009 at 1:02 pm |
  18. Chiana (Canada)

    After reading Anderson's book, I realized that New Orleans needed a lot more support from the government long before Katrina. Your city deserves a lot of financial support. It is certainly one of the top tourist destinations, and I am amazed that much more hasn't been done. There are a lot of us supporting your city and the many individuals that have helped to make it such a vibrant albeit underfunded city. Good luck with the rebuilding!

    August 27, 2009 at 12:34 pm |
  19. Mari

    Eighteen hundred ...... lived were lost. In the richest, most powerful nation on Earth! And here we are 4 years later, New Orleans is still limping towards recovery!

    Thanks George W. Bush! The buck stops with you, sir.

    August 27, 2009 at 12:32 pm |
  20. Linda

    I live in Biloxi, MS. I'm not trying to take away for the disaster of New Orleans, God knows that's why it got any attention. I am very distressed when the state of Mississippi is forgotten. The storm came ashore in Waveland MS and that town is no longer there. I haven't seen or heard the first thing about the recovery on our coast. Waveland is getting ready to have a ground breaking for their new city complex (Fire, Police, City Hall). We are rebuilding here and still struggling, please acknowledge us, we do feel like the "Forgotten Coast".

    Thank you

    August 27, 2009 at 12:11 pm |
  21. Jessica

    I finally visited New Orleans for the first time this past February. I was supposed to go the year Katrina happened. I can;t believe how much work still needs to be done!

    The most amazing thing about my trip was all of the people I met -despite enduring such a horrific event, they were so cheerful, friendly and eager to talk about their beloved city.

    You cannot truly understand what happened without visiting NOLA and touring, especially outside of the French Quarter.

    I look forward to many happy return trips to New Orleans! Thank you Anderson, for continuing to report on this story!

    August 27, 2009 at 12:10 pm |
  22. Tracy

    Anderson,

    I imagine this is going to be a very emotional return for you. I am so proud that you are once again being the voice that New Orleans needs. It took you in the first place to get the government to notice that they screwed up and were downright negligent to their own people. I was horrified to see how unprepared governments are when it comes to natural disasters. The people in that area have been through hell but also have proven that when they band together for something so important as restoring this area, that people really can "move mountains" They have shown so much courage and hope in the face of despair. I am sending my thoughts and prayers to everyone in that area as well as to those who were displaced and couldnt return.
    God Bless
    Tracy (Alberta Canada)

    August 27, 2009 at 12:06 pm |
  23. Melissa

    I live in New Orleans. The city is recovering. Slowly. Just three months ago, we began to have 24 hour restaurants again. Plants are finally growing back to what they were. And now you have to actually look to see the damage because its becoming less and less. But the city still needs help. The work isn't nearly done yet. Some portions of the city are still virtually abandoned, and some of the houses that are occupied probably shouldn't be due to the damage they suffered. Don't forget this city please, its not over yet by a long shot.

    August 27, 2009 at 9:58 am |