Keith Pfefferle paused for a moment while cleaning out his flooded Metairie home damaged by Hurricane Katrina and leaned against the pale yellow front door vividly marked with orange spray paint indicating that no bodies were found in the house.
Pfefferle, who lives with his parents, lost everything on the first floor of their 1940s brown brick house to the storm. He also lost his entire business, which he started completely on his own.
“At first I was real discouraged,” Pfefferle said. “At night when you want to go home, you can’t.”
Pfefferle, an outgoing, 23-year-old businessman known to his friends as “Pfefferle the Entrepreneur,” started Pfefferle’s Lawn Care at 18 when he decided investing in a mutual fund was a better alternative than paying his fraternity dues at LSU. Pfefferle left LSU after a semester and started his business in New Orleans. Pfefferle also got involved in the real estate business, renovating houses and renting rooms.
Pfefferle said he is now putting his landscape company on hold until he has the financial stability to invest in the lost machinery and to accumulate another steady clientele base.
Hurricane Katrina sank Pfefferle’s business and left his future uncertain.
Evacuees who fled the hurricane have spread out around Louisiana and the United States, taking many small businesses with them. Displaced businesses means fewer jobs for Louisiana workers, contributing to one of the highest unemployment rates the state has ever seen. The combination puts Louisiana’s economy – largely dependent on small businesses – on shaky ground, and has state officials scrambling to keep businesses in state.
STAYING ALIVE
Longtime New Orleans residents like Pfefferle who want to rebuild their businesses in New Orleans face a test of self-sufficiency. Pfefferle’s lawn care business is dead. The grass and shrubbery of Pfefferle’s clients’ houses in the Lakeview area of New Orleans – which made up 90 percent of his $50,000 annual income – suffocated under 10 to 12 feet of salt water and sludge.
Pfefferle’s real estate business is also gone. Three of the five houses he renovated and rented to tenants have significant water damage. He can’t find his renters and the payments they owe him. Pfefferle estimates he has lost at least $6,000 in rent, and said he has not even begun to assess the houses’ damage with his insurance company.
With other states offering lucrative job and housing offers to evacuees, Pfefferle, like many other small business owners who have lost almost everything, is braving the economic losses and hopes to eventually move back home. Pfefferle and his family lived in a trailer in Hammond immediately after the hurricane, and now rent a house in Gretna on the West Bank. Pfefferle commutes to New Orleans daily to clean out his house and work for others whose homes were waterlogged in the storm.
 
A STATE’S STRUGGLE
The New Orleans Times-Picayune reported on Oct. 28 that 138,026 New Orleans area households have filed change-of-address forms. More than 31,000 households in the New Orleans area have requested their mail be sent to or near Houston.
Cities such as Houston jumped at the chance to house displaced businesses. Texas Gov. Rick Perry signed a proclamation on Sept. 2 announcing a temporary housing emergency in the state and suspended tax collection on state and local hotel and motel taxes for Hurricane Katrina victims as incentives for them to stay. Volunteers at Houston’s Astrodome helped match evacuees with jobs, and some Houston real estate brokers are offering lower rates so businesses can relocate.
Louisiana is fighting this pull. The state’s recovery is dependent on businesses and jobs remaining in the state. State officials have set up online job databases and job hotlines, and government relief agencies are providing aid to get businesses running again.
Louisiana Gov. Kathleen Blanco acknowledged the important role small businesses play in Louisiana’s economy in her statement to the U.S. Senate Finance Committee on Sept. 28. Blanco told the committee the hurricanes displaced 71,000 firms, which make up about 41 percent of Louisiana’s business economy. A little more than one-third of the businesses were located in hurricane-ravaged parishes.
Pfefferle said he is still waiting for his share of government aid from Federal Emergency Management Agency and disaster loan assistance from the U.S. Small Business Administration’s Office of Disaster Assistance to come in the mail.
“You can file for unemployment,” Pfefferle said. “A lot of places are hiring, but what I have known for the past five years is what I learned working on my own. I grew up working for my uncle and helping him with his real estate business, and I cut my first lawn when I was 13.”
Blanco said 42 percent of small firms – those making less than $500,000 annually – were harmed.
“They are family businesses – without deep pockets,” Blanco said.
Louisiana’s unemployment rate has also skyrocketed to 11.5 percent, according to latest reports from the Louisiana Department of Labor. The Stone & McCarthy Research Associates in New York estimated Sept. 29 that 279,000 people claimed unemployment related to Hurricane Katrina, and estimated that about another 100,000 claims would be filed. More than 600,000 people worked in the New Orleans area before Hurricane Katrina hit the city.
 
A COMMUNITY EFFORT
Areas around the state have shown resolve to hold onto Louisiana’s workforce and battered economy. Soon after Hurricane Katrina hit the Gulf Coast, the Lafayette Economic Development Authority threw together a job fair in two days so evacuees could find work as quickly as possible.
Adrienne Young, director of work force development for the Greater Lafayette Chamber of Commerce, said about 105 businesses from around Lafayette and about 80 evacuees participated in the job fair.
“There were a wide range of employers,” Young said. “Oil and gas-related companies were there, service industry jobs – specialized trades like electricians.”
Young said some companies created jobs to employ evacuees. The job fair also helped companies fill positions they weren’t previously able to fill. The Chamber of Commerce is continuing the job fair online, allowing companies to post job openings on the Chamber of Commerce’s Web site.
“[Louisiana’s workforce] is a precious commodity,” Young said. “These are trained Louisiana workers that we want to keep.”
Baton Rouge is hiring workers and fostering businesses, at least temporarily, until they can move back to their original homes and sites.
The Baton Rouge City-Parish Office of Workforce Investment Program hired 409 displaced workers to work for nonprofit public and private agencies involved in relief efforts, said Jacqueline Mims, director of human development services in East Baton Rouge Parish, in an e-mail. The program is part of a $62 million federal and state program to give evacuees a source of income. Workers make $9 an hour and can work up to 40 hours a week for eight to 10 weeks.
Workers will also be hired to deal with the increased amount of children entering school systems, Mims said.
“These persons are engaged in various work activities ranging from clerical functions to construction,” Mims said.
Though this work program may ease some evacuees’ financial troubles, it is only a temporary solution, said Howard Karger, social work professor at the University of Houston. Temporary work does not solve the overall unemployment problem.
“Nonprofits are useful and necessary in the short term but not a good long term solution,” Karger said.
Karger said working with nonprofits is not a stable form of employment.
“The Red Cross and [Federal Emergency Management Agency] come into an area, set up and leave,” Karger said. “They won’t be here for 30 years.”
 
REBUILDING
Though many native New Orleanians like Pfefferle have a deep love for their city and hope to return, business is business. Businesses, however loyal to their hometown, will not return to a barren state, said Rob Olshansky, associate head of the Department of Urban and Regional Planning at the University of Illinois at Urbana-Champaign.
“Business goes where it can make money,” Olshansky said. “Small businesses need a population to support them.”
In Blanco’s statement to the U.S. Senate Finance Committee, the governor asked Congress to consider a $10 billion Louisiana Business Development Fund so the state can take care of small businesses such as Pfefferle Lawncare. If passed, the fund will give grants to businesses that plan to return to areas affected by hurricanes Katrina and Rita as well as a $30 billion proposal to give Louisiana companies tax-exempt “Hurricane Recovery” bonds.
“Just as the nation knew that we must recreate the economic greatness of New York City after 9/11, the nation and the world need New Orleans and south Louisiana – I am not only asking you to approve this legislation because it is critically important to Louisiana. I seek your support because New Orleans and south Louisiana’s economic rebirth are vital to our nation,” Blanco said.
Olshansky suggested two strategies to draw businesses back in-state.
“Demand federal resources to support recovery of housing and jobs,” Olshansky said. “In particular, demand support for nearby temporary housing.”
Olshansky also suggested a short-term plan on a smaller scale that directs a segment of federal funding to short-term support for small businesses. Many businesses want to leave, Olshansky said, but many others want to stay and need financial aid until their customer base returns.
Though he needs a steady flow of income to get back on his feet, Pfefferle’s independence is hindering him. He found a job in Baton Rouge with a large construction company cleaning up hurricane debris, but he quit two days later because he missed interacting with clients in his beloved, now devastated, city.
Pfefferle said he has not looked for another job with a large company and does not plan to search for one through job services offered by the local and federal government.  
“I miss cutting grass all day in Lakeview and people honking at me because they know me,” Pfefferle said. “I felt like a small little peon in a big operation. No one notices you.”
Pfefferle acknowledges his stubbornness to stick with his business. He said he remains optimistic that his business will rebound from the hurricane, but he has adapted his business to a renovation service to help people remove rotting carpet, furniture and food from their flooded houses.
“I guess when you run your own business, that’s what you like to do,” Pfefferle said. “I enjoy what I do, and I get a different fulfillment working for myself. I learned real young to take care of myself.”
 
Contact Leslie Ziober at [email protected]