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Big Easy's big struggle
Katrina closed key small shops

By Keith O'Brien, Globe Correspondent | June 11, 2006

Third in a series of occasional articles on post-Katrina New Orleans.

NEW ORLEANS -- The two cousins were as close as sisters. Their families followed each other from Saigon, Vietnam, to New York to Lancaster, Pa., and then south to New Orleans.

There, near a bend in the Mississippi River, Vy Banh and Carolyn Takacs-Snell grew up, watching their parents sell steaming bowls of pho, a brothy Vietnamese soup, at the family's restaurant, the Pho Tau Bay, which opened in 1982.

Over the years, one restaurant became four. A fifth was due to open early in September 2005 in downtown New Orleans. It was exactly what her family had hoped for when they fled Vietnam in 1975 , Banh said.

``It was the American dream."

Today, four of the family's five restaurants are closed. Two were flooded badly and have been gutted. One, across the street from the city's shuttered Charity Hospital, is up for sale.

Katrina did what time and even war could not. It separated the family, dividing it between those who are rebuilding in New Orleans and those who are starting over elsewhere.

In thousands of small and medium-size New Orleans businesses, decisions like this are being made every day. Even before Katrina, New Orleans was not a city of big corporations; it was a city of mom-and-pop groceries, family-owned barbecue joints, lawyers who hung out a shingle instead of joining a big firm, and bar owners who knew their customers by name.

Of the 22,000 businesses in Orleans Parish before the August storm , there were 21,000 with fewer than 99 employees, said the city's director of economic development, Don Hutchinson. This means that the future of many neighborhoods depends not on executives sitting in board rooms, but on true-blue New Orleanians who are pouring their life savings into dreams that others have given up for dead.

But more than nine months after the storm, about 2,000 businesses -- 10 percent of the city's pre-Katrina total -- are open, and many of these are struggling. Even the major corporations that have returned to the city -- including Shell Oil, Entergy Corp., and Capital One Financial Corp. -- have had to adapt in recent months.

Most big companies have worked out disaster-response strategies -- establishing phone trees, for example, to keep employees in touch in case of evacuations and making contingency plans to relocate for weeks at a time if a storm hits. Capital One has conducted surveys to find out which employees have pets and whose spouses smoke -- just in case there is another extended evacuation and the company needs to scramble for hotel rooms.

``Sometimes, it's the little things," said Ron Samford , Capital One's chief administrative officer in New Orleans.

Other times, it is the big things: Chevron has its own ambulance at the ready this summer.

Chevron also decided that its future is on higher ground in the suburbs. The oil company plans to leave its downtown offices and move its 700-employee operation across Lake Pontchartrain, where it hopes to avoid the kind of blackouts that shrouded New Orleans and shut down business for months last fall. Other companies are following suit, moving at least core operations, like mail or mainframe computers, to higher ground.

But small businesses don't have the money or the ability to put such contingency plans in place.

``I'm afraid if another storm does hit, we would probably, definitely pack up and leave," said Takacs-Snell, whose family reopened one of the five Pho Tau Bay restaurants in April. ``I don't think we could sit out another season like this. It was just too stressful to sit around and wait."

A hurricane strikes The Pho Tau Bay story began in Saigon in 1965, when an American soldier, Karl Takacs, met a Vietnamese teenager named Tuyet. They married in 1968 and left Vietnam five years later, settling in Ossining, N.Y., and raising two children, Carolyn and Karl Jr.

With the fall of Saigon in 1975, the Takacses helped find homes for two dozen of Tuyet's relatives, including Banh.

She and Carolyn grew up together. In August they fled together, to Houston and then to Pennsylvania. Takacs-Snell, pregnant at the time, was miserable there, especially after her family returned to survey the damage and she stayed behind to give birth.

``Every day I was in Pennsylvania, I cried," she said.

But when she returned in December to Gretna, a town on the outskirts of New Orleans, Takacs-Snell realized it wasn't any better there. When Banh's family decided to move to Lancaster, Takacs-Snell's family briefly considered relocating to Dallas and then chose to stay in Gretna. For better or worse, it was home.

``We had no choice, really," Tuyet Takacs said.

Small-business owners across New Orleans have wrangled with similar issues in recent months, and many are opting to stay in the city, according to a study released in May by Richard Campanella, a professor at Tulane University.

Campanella, assistant director of the Center for Bioenvironmental Research at Tulane, has been counting storefronts along three key corridors of the city to gauge the business climate. As of May 1, he found, 73 percent of the locally owned, independent businesses in those corridors had reopened -- 13 percentage points higher than the number of regional chains and more than 25 percentage points higher than the number of national chains. Campanella was not surprised.

``A local independent . . . has all of its eggs in one basket," he said. ``This is how that family or that owner makes their living. They have to come back."

Some returned early. Tony Tardo, a 50-year-old barber, was cutting hair on the porch of his gutted shop last fall before he finally reopened in November. Having lost his three other businesses to the flooding -- two Subway sandwich shops and an ice cream parlor -- Tardo said he had no choice but to concentrate on haircutting.

``It was the only income I had," he said.

Charles Ciaccio, another neighborhood businessman, chose to rebuild where he was. Since the storm, he has reopened four of his six grocery stores on the Gulf Coast.

The owners of Finn McCool's, a popular Mid-City pub, have done the same. They reopened on St. Patrick's Day to huge crowds.

``It still looks like Beirut outside," said pub co-owner Stephen Patterson from his bar in Mid-City. ``But once people get inside, they say, `We'll definitely be back.' "

Rebuild vs. relocate Not every business owner has the luxury or the nerve to rebuild. In neighborhoods that were wiped out by flood waters, the Yellow Pages are worthless. Countless business owners have scattered to the St. Tammany or Jefferson parishes. Paul Costanza, the owner of Jack Petty Marketing & Promotions, said he is disappointed to count himself among those.

``I personally did not feel -- and I feel bad saying this -- that the city would be viable for my business for a number of years," said Costanza, who sells plaques, trophies, and other promotional items. ``How many customers are going to come to a bad area?"

His company had been in New Orleans for almost 40 years. But when the flood water destroyed his Mid-City location, Costanza put it up for sale and bought a place in suburban Metairie.

He thought the move would jump-start his business. But Costanza's gutted city property is still for sale. His flood insurance premiums have more than doubled. And with a monthly mortgage more than two times what he used to pay and business down 36 percent in May , Costanza struggles.

``No one's interested in buying what we're selling," he said.

Some business owners are trying to reposition themselves to sell what people want to buy. Civil attorney Browne Larose, for example, worked on a lot of personal injury cases before the storm. Now he is beginning to focus on a different sort of case.

``I get a lot of FTDs -- FEMA trailer divorces," he said.

But there's only so much that retailers can do to attract business, especially now. Summers are historically slow in New Orleans. It is hot and sticky. It's hurricane season. Some businesses in the French Quarter are so pessimistic about tourists showing up this summer that they are considering whether to close for the season.

Hutchinson, however, is confident about the months ahead. The city's economic development director said recently that there could be a boom on the horizon as construction picks up and federal money makes its way to small-business owners. The Louisiana Recovery Authority earmarked $180 million to small businesses in April, but critics say the money, most of which would come as loans, is not enough.

``What they really need is grants," Campanella said.

Back at the Pho Tau Bay in Gretna recently, the lunch crowd trickled in. Business was good, the Takacs family said, but not great.

In Pennsylvania, 1,200 miles north , Banh, 31, prepares for the opening of the latest family restaurant. One day, Banh said, she will return to New Orleans and reopen the family's Mid-City location. For now, she is focused on finding customers for her new restaurant and making sure the family has a stable income again.

``We were living life really good in New Orleans," Banh said. ``Now I know why they call it the Big Easy. It was just too easy."

Previous parts of this series appeared on Oct. 16, 2005, and Feb. 5 and can be found at under ``special reports."