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Katrina cleanup offers lessons for Sandy-slammed companies

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As New Jersey economic development officials devise strategies to restore the state’s hard-hit economy after Hurricane Sandy, they’ll hear a consistent message from the Gulf Coast.


“New Jersey doesn’t have to start from scratch,” said Lee Youngblood, communications director for the disaster recovery division of the Mississippi Development Authority. “All they have to do is look to Katrina states as a model, because Katrina, as a disaster, was so far beyond what had been experienced in the country before.”

Youngblood said his agency — which has been in charge of $5.4 billion in federal Community Development Block Grant funding approved after Katrina struck in 2005 — is eager to share the lessons it learned in the ongoing rebuilding effort.

For instance, he said, “we learned quickly that while (federal) government money is important, the best way to oversee that government money is with a private-sector management model within the state.”

John Mabry, chief operating officer of the division, said the CDBG program was deemed the best and most flexible vehicle to get rebuilding money to states, but said the program came with cumbersome regulations that had to be waived to have a maximum impact. He urged New Jersey to ask for similar waivers if it gets CDBG money.

Mabry also said New Jersey should consider using a large portion of any grant money for revolving loan programs administered through local community-based development organizations.

The advantage of using community groups to funnel the money is that when the money is repaid, it can be used for any contractually allowed purpose. If the money is lent and repaid to the state, it’s still considered “federal” money, and must be spent according to tighter restrictions, Mabry said.

Mississippi’s revolving loan program was given a mere $50 million.

“The lesson learned here that people in New Jersey should maybe hear is that we probably should have done more than that,” Youngblood said.

Another piece of advice is to set up small business assistance centers to help small businesses navigate the types of assistance available. Youngblood said small businesses need the most direction, since larger businesses generally have plans for major disasters.

Still, Mabry said his agency also worked with large businesses, in one case forming a housing program for displaced workers of a large employer. The down payment assistance program was jointly funded by the state and the employer.

E-mail to: jaredk@njbiz.com

On Twitter: @jaredkaltwasser

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