Flood keeps builders busy
FARGO - It's been said that war is bad business, but what about a war on water? Local economists and those in the food and lodging industries say it's difficult to gauge the economic impacts of the Red River Valley's spring flood fight, now in it...
FARGO - It's been said that war is bad business, but what about a war on water?
Local economists and those in the food and lodging industries say it's difficult to gauge the economic impacts of the Red River Valley's spring flood fight, now in its third consecutive year.
The Forum was unable to find any official studies of how much business is gained by people coming to town to help fight the flood or lost by locals spending their time sandbagging instead of shopping and dining out, not to mention those who can't get to town because of flooded roads.
But there's at least one measureable impact: the amount of money paid to contractors near and far to build levees and make other flood preparations.
As of last week, the U.S. Army Corps of Engineers had awarded nearly $8.7 million in contracts for levee work in the 2011 flood fight, most of it in the Red River Valley.
The city of Fargo has awarded nearly $11.5 million in contracts for levee construction, levee restoration and demolition of buyout homes. More than
$9.3 million of that work went to Fargo-Moorhead-area contractors, including about $5.1 million to Master Construction and
$2.4 million to Industrial Builders, according to a list provided by the city's finance office.
Paul Diederich, president of Industrial Builders, said the emergency flood work is disruptive to the company's regular jobs, "but when it's a matter of life-and-death urgency or whether a home's going to sustain water or not, that's what we do.
"From an economic standpoint, many of my employees are getting a lot of hours, a lot of overtime hours, and obviously that's good pay for them," he said. "They wouldn't be getting those kind of hours were it not an emergency situation."
The influx of workers from government agencies such as the corps and Federal Emergency Management Agency also has an impact on local businesses.
Corps spokeswoman Shannon Bauer estimated the 50 or so corps workers who deployed to the F-M area for the flood fight contributed about $5,600 per day to the local economy in terms of hotel stays and spending on food.
"We eat a lot," Bauer joked.
However, homeowners who don't dine out during the flood fight seem to offset the extra out-of-towners, said Fargo businessman Randy Thorson, whose restaurants include JL Beers and Old Broadway.
"Sales are comparable to years when we don't have floods," he said.
The 2009 flood hurt sales because of a city order to close nonessential businesses, but this year's flood fight had little impact, Thorson said.
"It seemed like a non-event because the city had done such a good job, and we didn't have any effect on business at all," he said.
Cole Carley, president of the Fargo-Moorhead Convention & Visitors Bureau, said virtually all of the metro area's hotel rooms were booked for two solid months during the 1997 flood. Government workers, insurance adjusters and others descended on the city and filled rooms.
"It was just a major influx of folks," he said.
However, since then, businesses haven't seen the same spike during major floods, he said.
"Since '97, there's been so much good preparation that it's less of an 'Oh God, here it comes' type of thing," he said.
Still, he said, businesses pick up some flood-related customers such as corps and FEMA workers, Red Cross staff and National Guard members.
"Our sense is that it adds a few rooms, but I don't think it's huge, and I don't think that we really have lost anything," he said.
Diederich, for one, would like to see a return to business as usual.
"To be honest with you, it's nice to have an extra infusion of work, but it's not nice, the inconvenience it causes for everybody," he said. "I'd much rather have the scheduled work."
Readers can reach Forum reporter Mike Nowatzki at (701) 241-5528