Report: Cedar Rapids businesses took $25 million hit during 2016 flood

Feb. 17--CEDAR RAPIDS -- The 2016 flood caused a total loss of $25.7 million to the private sector in Cedar Rapids signaling a much broader impact than previously reported public costs and limited physical damage would suggest, according to a 2016 Flood Recovery Report due out next week.

The report captures the unseen impact on area businesses, said Jasmine Almoayed, Cedar Rapids economic development manager. Businesses lost sales revenue from being closed, while incurring costs for salaries, renting flood protection equipment and lost inventory, she said.

"The reason why we did this was to have a better understanding of what the economic losses, the economic impact is when we have one of these flood events, beyond what the city spends," Almoayed said. "There's this whole other story that is out there of unreported losses."

Almoayed and colleague Dave Connelly, an economic development specialist, presented an early review of the report to the Cedar Rapids City Council on Tuesday in advance of publication.

The 2016 flood saw the Cedar River crest at 21.9 feet on Sept. 27, making it the second highest crest on record in the city.

"The physical damages were actually a pretty small part of the total," Almoayed told the council. "It was really more about loss of production, loss of payroll. That sort of thing,"

Cedar Rapids officials had estimated $10 million in public spending connected to a rapid and largely successful flood prevention effort and isolated damages to property and infrastructure.

The report captured 141 survey responses, including 34 major employers. Large employers experienced $19.8 million in losses, while small businesses sustained $4.2 million in losses. Lost sales and productivity were the highest costs, followed by the cost of flood mitigation efforts.

Several major employers opted not to report losses, due to confidentiality restrictions, so the real loss is likely much higher, officials said.

"If I were to characterize the scale of unreported losses, I'd say in the millions of dollars," Connelly said. "We had a number of major employers who declined to report costs or declined to report costs in specific categories."

The report also includes the results of the Jobs and Small Business Recovery Fund, which city and business leaders established to help offset losses for businesses. The program generated $255,658 from public and private sources.

More than 100 application were submitted for assistance, of which 44 have been funded, another 41 were approved for funding and 16 were withdrawn or ineligible. To date, $155,605 has been distributed.

Bill Rieckhoff, owner of Great American Popcorn Co., 1121 Third St. SE, said his company received a grant covering about one-third of his losses.

"It was very meaningful to our business," he said. "It did not cover the total extent of our losses, but it really helped out because when we had to go dark for two weeks all the revenue shut off. You still have rent and insurance and lots of expenses, in addition to real expenses of moving out and moving back and everything else."

The report helps paint a better picture of the impact and threat to Cedar Rapids when floods occur, Almoayed said, adding it also shows the need for a permanent flood protection system in the city.

"This is why it is important to get permanent flood protection in," she said. "How long am I going to deal with this before I say I am not going to do business in Cedar Rapids. Iowa?"

Cedar Rapids officials have estimated it will cost $630 million to construct a permanent flood control system. To date, a payment formula has $269 million coming from the state through sales tax rebates over 20 years, $130 million in local investment, and $70 million to $80 million in federal aid, which was authorized in 2014 but never allocated. That leaves a gap of between $151 million to $161 million.

City Council member Justin Shields reiterated the need to shake loose federal aid for a Cedar Rapids flood control system.

"We keep stacking up the moneys lost in the community," Shields said. "No one gains from it. Everyone losses, even the federal government, even the state government."

l Comments: (319) 339-3177; [email protected]

Your next Business articles

Changes planned to sell-by dates on food ...

Judge blocks Cigna from scuttling $48 bi ...

Coca-Cola fans fret as company revamps l ...

___

(c)2017 The Gazette (Cedar Rapids, Iowa)

Visit The Gazette (Cedar Rapids, Iowa) at thegazette.com

Distributed by Tribune Content Agency, LLC.