September 19, 2004
By Jamie Malernee
Staff Writer
Hurricanes Frances and Charley are estimated to have cost Florida a combined $30 billion, with even more expenses piling up from Ivan.
Some residents will feel that in big ways -- losing thousands of dollars in insurance deductibles and wages or revenue, as well as damage not covered by insurance. The more fortunate will see subtle costs -- perhaps an increase in electricity bills or the price of fresh produce, and the time it takes to build a new home.
This much is sure: An analysis of the costs to date for the first two storms shows that almost no aspect of the state's economy has been spared. Cities in Palm Beach and Broward counties have reported only the most tentative of numbers -- some have not reported anything -- and already the public cost in those areas is approaching $100 million. That doesn't include losses to private homes and businesses, which make up the bulk of the storm damage. About half is simply for debris removal.
"We're still going to be spending money for six months," said Richard Roberts, director of Palm Beach County's Department of Financial Management and Budget.
So huge is the total that many state officials hesitate to throw around rough numbers. Every time the state starts to assess the impact of one hurricane, they say, another one is on its way.
"It's a lot," said Craig Fugate, director of the state Division of Emergency Management, when asked for a tally.
And unlike the economic spark Hurricane Andrew caused, this season's batch of hurricanes isn't expected to boost other areas of the economy, like the construction industry, because they already were operating in high gear.
"Florida has been in such a construction boom, there's not a lot of room to grow," said University of Florida economist Dave Denslow, who added that much of the damage is from flooding, not wind. "A lot of people don't have flood insurance, and it's harder to collect, so a lot more people will be paying out of pocket."
Housing and insurance
Splintered and flooded homes easily accounted for the biggest hurricane losses across the state after Frances and Charley, about $9.2 billion in housing damage, according to numbers by Wachovia Corp. economist Mark Vitner. Add to that personal property loses, such as cars wrecked by flying debris and waterlogged furniture.
But insurance industry officials say the spate of storms will not trigger Hurricane Andrew-style increases and company bankruptcies.
"Because Florida had the [Hurricane Catastrophe Fund] in place, it looks like the market will remain fairly stable," said Joe Annotti, vice president of public affairs for the Property Casualty Insurers Association of America. "There's not going to be mass insolvencies of companies."
Agriculture
Last week, Commissioner Charles Bronson of the Florida Department of Agriculture and Consumer Services estimated that total agricultural losses from both hurricanes would exceed $2 billion and affect 30 percent of the industry.
"After both storms, it was just complete devastation. We heard some [farmers] who are just very discouraged and want to get out of the business," said Casey Pace, spokeswoman for Florida Citrus Mutual, the industry's largest growers group.
Because of a record citrus crop last year, Pace said, consumers won't likely see their orange juice prices rise. But she said people might notice the cost of fresh grapefruit going up.
Fresh flowers and potted plants could also grow pricey after much of the stock at local nurseries was trashed in the storms. The timber industry also will see major loses because, in Florida's wet and humid climate, root rot and insect infections begin to emerge immediately after trees are downed.
Tourism
Florida's other big moneymaker, tourism, also took a beating.
Hurricane Frances alone cost Broward's hospitality businesses about $14 million, according to an estimate from the Greater Fort Lauderdale Convention & Visitors Bureau. Many hotels, restaurants, golf courses and other attractions had to close, losing income. Taxi drivers had no customers, and, even if they did, they had few places to send them.
Tourism leaders in Palm Beach County have not calculated losses, but they are likely to exceed Broward's. Most hotels on the ocean in Manalapan, Palm Beach and Palm Beach Shores were closed for at least two weeks, including The Breakers and Ritz-Carlton luxury resorts.
"People want to get back to work," said Crissy Poorman, a spokeswoman at the Ritz, which won't open until later this week.
Palm Beach County tourist spots also suffered damage. The Palm Beach Zoo lost much of its landscaping. A portion of the roof at the Loxahatchee River Historical Museum is gone. The Mounts Botanical Garden near West Palm Beach lost most of its beloved tree canopy.
Businesses
Overall, Florida businesses experienced about $4.4 billion in damage from both storms, according to the Wachovia numbers.
As a result, Florida Power & Light Co. subscribers, who already pay a small amount each month into the storm reserve fund, could expect to see higher bills down the road.
Because of the widespread power outages and Frances' slow movement, many retailers were out of business for longer than expected.
Federated Department Stores Inc. said the storm stripped sales from its Florida Burdines-Macy's and Bloomingdale's stores over Labor Day weekend. Delray Beach-based Office Depot Inc. warned that its third-quarter earnings would fall short of expectations in part because of the storms. So did Fort Lauderdale-based AutoNation.
Builders say Hurricane Frances set them back about two weeks because of time lost cleaning up construction sites. Some fear the rising cost of labor and materials; cement was already in short supply.
Government
Still unclear are the costs to local governments in South Florida, although most say they are confident that FEMA, not taxpayers, will pay most of the bill for damaged public buildings, overtime and debris removal. Although getting rid of fallen trees and garbage sounds like it would be a small expenditure, it made up about half the storms' preliminary costs reported by cities.
West Palm Beach spent $13.5 million on debris removal.
"It does put a strain on you for the short term," said financial director Thomas Harris.
In Lake Worth, public property took a beating. Frances took a bite out of the Lake Worth Pier, the water plant and other city buildings. At Palm Beach Shores, Mayor Tom Mills said the town's waterfront suffered the most damage along the docks.
"Nearly all the damage was done by anchored boats breaking loose and smashing into them," said Mills, who also owns Cannonsport Marina.
In Pahokee, "We didn't lose any lives. But every time I look, I see something I didn't see before," said Town Manager Lillie Latimer. "We realize there is going to be a cash-flow problem."
In comparison, Broward cities got off easy. But not free.
Fort Lauderdale saw problems at its beach -- sand that piled onto State Road A1A and had to be removed, its undulating beach bench damaged, its lifeguard huts leaning awkwardly and in need of new foundations.
Plantation, known for its old-growth canopy, faced massive debris removal.
Oakland Park City Manager John Stunson says that in the future, cities need to develop better ways to prevent massive power outages, such as by trimming tree branches around power poles.
"We are all capable of learning lessons and applying better solutions," he said.
Sun-Sentinel State and Local reporters contributed to this report.
Jamie Malernee can be reached at jmalernee@sun-sentinel.com or 954-356-4849.
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