Sean Callebs and Jason Morris
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.