Ivan might be gone, but plenty of problems remain
Published: September 27,2004
Hurricane Ivan turned out to be not-so-terrible for Mississippi compared to the catastrophic damage in neighboring coastal areas of Alabama and Florida. But there were widespread impacts across the Magnolia State and the region from business closures caused by the evacuation, storm damage and the loss of electrical power.
And there have been continuing negative business impacts caused by the closure of major highway and rail transportation networks in Florida including Interstate 10 and sections of the CSX Transportation (CSXT) rail line.
After the September 16 hurricane came ashore near Gulf Shores, Ala., there was uncharacteristic silence along the normally busy CSXT rail line along the Mississippi Coast. Damage to the rail lines in Alabama and Florida meant that trains were stopped between New Orleans, La. and Tallahassee, Fla. Service was expected to be out for at two weeks following the storm.
A CSXT spokesperson said that the track that normally carries 30 trains per day was inspected throughout the affected area, with partial train operations resuming as tracks were cleared. Generators, chain saws and other equipment were staged throughout the area with private contractors assisting with restoration of CSXT lines.
Gary Sease, spokesman for CSXT, said remarkable progress was made over the weekend after the hurricane. Most of the railroad that was affected was operational again with the main challenge being the lack of commercial power available to operate signals.
The most significant damage was seen east of Pensacola where there were two wash-outs about three miles long each. There was also damage to eight small bridges. Sease said repairs would depend on how quickly materials could be transported to the work sites.
While there is a steep challenge to finish repairs, Sease said a lot of resources are being focused on the work. In the meantime, re-route options are being used to keep the trains running.
“The problem with re-route is that it adds miles,” Sease said. “It is not the shortest route. That adds time and cost, but is just something we will have to do until we can restore that line. We’re working very hard to get our railroad back into a state of normalcy. Please bear with us until we can do that.”
Having Interstate 10 closed affects a large range of businesses including Coast casinos, transportation companies and businesses such as hotels, restaurants and service stations along I-10 throughout Mississippi.
“Certainly this going to be a big concern for us,” said Southern District Highway Commissioner Wayne Brown. “One of the big money generators we have is traffic on I-10. The bridge out in Pensacola is certainly going to affect traffic on the Mississippi Gulf Coast. We are going to lose some income on Interstate 10.”
Decreased fuel sales along I-10 will take a bite out of income generated for the Mississippi Department of Transportation (MDOT). Brown said it isn’t known yet how long it will take to re-open I-10 in Pensacola. Unofficial word is that a 28-day contract has been let to open up at least two lanes of I-10 in Pensacola.
“If they do that, they’ll get my seal of approval,” Brown said. “You can fix something in a hurry if you are willing to spend what it takes. And there is so much involved here they are going to have to spend the money.”
When similar types of bridges are built in the future, the lessons from Ivan and the other hurricanes this year will be used to build bridges that can better survive a hurricane. Waves can exert forces of 600 pounds per square foot on a structure.
“In other words, a wave can lift a slab that is four-foot thick,” Brown said. “In the future, we will build higher so the structure will be above the anticipated surge action.”
The outage of the major east-west transportation network across the southern part of the U.S. has also led to discussion of the wisdom of considering building a new expressway north of I-10. Brown said what might be called Interstate 15 would make more sense than spending an estimated $600 million to widen I-10. Brown said by the time I-10 was widened, it would already be over capacity again. And then it would be prohibitively expensive to add yet another lane. He believes it makes more sense to build a new, limited-access interstate.
The loss of casino patrons from Alabama, Florida and Georgia is expected to cut into profits of casinos on the Mississippi Gulf Coast — and hence tax revenues. The Coast casinos generate about $386,000 per day in tax revenues.
The closure of I-10 is a big deal to Coast casinos, said Bernie Burkholder, president and CEO of Treasure Bay Casino.
“Now everyone is waking up and counting their blessings we were not hit,” Burkholder said. “But the fact of the matter is that a significant portion of our business was hit. Those people in Alabama and Florida were not only our customers, but those roads supply access to an even a larger base of customers farther to the east and north. So there are going to be impacts to Biloxi’s market. How significant and long range is yet to be determined. While these areas rebuild, people are going to be focusing their energies and any kind of spare time and budgets they have on rebuilding their communities, as well they should. But it is definitely going to have a negative impact on the business the Mississippi Gulf Coast has realized from the east.”
The casinos were closed for several days, and received little damage from the storm. But what could have happened by looking at the experience of Florida and Alabama causes grave concern in the casino industry.
“I really believe that the leadership in Mississippi needs to focus on adequately protecting not just the gaming industry, but the entire business/tourism community to the degree they can,” said Burkholder, who has been trying to get his casino to a more secure location in a man-made basin on land. “I believe there are significant measures that can be taken whether the boats are moored in place or allowed to move slightly from their present positions to protect the jobs and the tax revenues that the gaming industry produces for the state, counties and cities. I disagree with some of the political leadership that wants to do business as usual or status quo. And they choose to ignore this problem, and not protect the job and tax base of this industry.”
Burkholder believes a direct hit by a hurricane in Biloxi would have closed virtually all of the properties for some time period, and some casinos would have been closed for six to eight months. That would have had a tremendous impact not just on tax revenues, but jobs from the estimated 15,000 to 17,000 casino employees. There could be damaging ripple effects on everything from increased home mortgage foreclosures to employment that is indirectly linked to the casinos.
Other major industries on the Coast have taken precautions to minimize damage from hurricanes. For example, Chevron-Texaco Refinery in Pascagoula invested millions to build a hurricane dike around its facility after Hurricane Georges in 1998.
Steve Renfroe, public and government affairs manager for Chevron-Texaco in Mississippi, said the refinery didn’t flood with Ivan like it did with Georges.
“Since the wind was out of the north, we are thinking flooding would not have been an issue even without the dike,” Renfroe said. “There is no doubt that being on the western side of the storm benefited this area. We weathered the storm well.”
Renfroe said anytime a hurricane comes ashore, it is serious business. The refinery was shut down for a period of time after Ivan. But by Sunday after the storm, product was being shipped out of the refinery again.
The state’s largest private employer, Northrop Grumman, was also shut down for several days because of the hurricane. Dr. Philip A. Dur, president, Northrop Grumman Ship Systems, said Northrop Grumman Ship Systems operations on the Coast did not sustain any significant damage from Hurricane Ivan and all facilities returned to full production quickly after the storm.
“There will be minor schedule impacts to all shipbuilding programs due to the time it took to prepare for the storm and to return to full production,” said Dur.
Contact MBJ contributing writer Becky Gillette at firstname.lastname@example.org.
To sign up for Mississippi Business Daily Updates, click here.
Top Posts & Pages
- Ex-prison boss and businessman admit to bribery scheme
- ASA postmortem: industrial recruiting is a constant cycle of death and life
- MBJ Business Woman of the Year Top 10
- MARTIN WILLOUGHBY — Doug Dale’s self-awareness helps lift him to top of his game
- JOSH MABUS — Inbound marketing is fueled by wishful thinking
- (UPDATED — BREAKING NEWS) American Specialty Alloys won’t locate $1.2B mill in Mississippi
- Prison won’t interrupt ex-prison chief’s retirement cash flow
- Meet the MBJ's Businesswoman of the Year — Rosemary Smith, a business hotshot
- State’s Consumer Protection Act key to forcing S&P settlement on bogus bond ratings