City, businesses look past Katrina

Published 12:00 am Tuesday, January 2, 2007

Sam R. Hall / Times’ Publisher


When the remnants of Hurricane Katrina ripped through Alabama, little damage was left in its wake here.

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The true strain on the city came from attempting to serve the scores of evacuees, many of whom were left homeless and separated from family members.

“We have a lot of evacuees from a normal hurricane,” Mayor Cecil P. Williamson said. “What really caught us off guard was having them for so long.”

A normal hurricane evacuation will send coastal residents to the area for a matter of days, Williamson said, just long enough for the storm to pass and danger to clear. But this time, the devastation left little of home to which people could return.

“With the help of the church community, we were able to house them and meet some of their needs,” Williamson said. “Mostly, those other needs were just staying in touch with the people they needed to contact.”

The mayor said organizations like the Alabama Red Cross and local ministerial alliance – along with local businesses – provided a tremendous amount of support during last year’s crisis. It was a lesson in how to be prepared, and Williamson said the city will be better capable of meeting similar needs in the future.

“There is no way for any community to meet the demands of a natural disaster like Katrina,” said Jay Shows, director of the Demopolis Industrial Development Board, adding that he feels the city and its business community did the best they could.

The mayor said no plan has been put in writing to deal with another evacuation of this size, but she said conversations have taken place and efforts started.

One such effort came from the federal government with the issuance of GO Zone monies issued by Congress.

The Gulf Opportunity Zone Act of 2005 established tax incentives and bond provisions to support economic development in areas affected by Hurricane Katrina.

“It’s not free money,” Shows said, addressing one of the main misconceptions of the plan. “You still have to have a credit-worthy project.”

The plan includes 11 counties in Alabama, along with 20 parishes in Louisiana and 50 Mississippi counties.

Shows said the GO Zone incentives can save a borrower on the average of 1.5 to 2 percent on an interest rate compared to conventional financing.

Alternatively, Shows said an investor can seek to take advantage of the GO Zone’s accelerated depreciation program. By doing so, the business can take a depreciation of up to 50 percent of the businesses’ new capital investments.

Williamson said she believes the program will be a boost to the city.

“It’s going to create more businesses who create more jobs,” the mayor said.

The mayor said she hopes the grantors of the GO Zone incentives give first priority to the regions most effected by Hurricane Katrina. That said, she believes the federal government provided “more than enough money even for those areas in the greatest need.”

“If some other area is going to get that money, I want us competing for it as well,” she said.

Both Shows and Williamson said several people have inquired about the GO Zone initiatives, but both say they are skeptical of some of the projects being worthy of the incentives.

Shows said the main reason is that the projects must be valid projects with a strong financial base.

“[GO Zone incentives] will no make a bad project good,” Shows said. “It makes a good project just a little better.”

Shows, who came to his current position after retiring from hotel management, is an investor in a new motel here. His project is seeking GO Zone assistance.

But he said that investors in this area would be foolish to develop just for an emergency like Hurricane Katrina. He said the business model must be solid on its own merits.

Williamson said she believes the criteria set forth by the State of Alabama will help weed out unwarranted applications.

“These have to be real projects,” she said. “This money doesn’t go to just anyone.”