State money intended to revitalize business districts flooded during last year’s tropical storms has been given to towns that had little to no flood damage to businesses.

The North Carolina Rural Center was charged with handing out $5 million earmarked by the state legislature for “economic recovery and redevelopment in business areas that sustained storm damage,” according to the flood recovery act.

The Rural Center gave money to several communities that failed to document the severity or impact of their flooding, however. A telephone survey of merchants and town officials revealed few if any lasting economic consequences as a result of flood damage in at least six communities that received money. The Rural Center has since requested towns that got money but failed to document impacts from the flood to do so.

A quick look at funding awarded to Bryson City versus Canton and Clyde shows money was not contingent or proportional to the level of flooding.

In Canton and Clyde, the Pigeon River engulfed the downtowns leaving a swath of condemned buildings and closed down businesses in its wake. Canton and Clyde each received $700,000 for economic revitalization.

In Bryson City, one downtown business was closed for two weeks. A footbridge to a downtown park was destabilized, cutting off access to the park. The town received $400,000.

“The question is how was the amount determined? What was the ratio of the amount given compared to the damage?” asked Bill Sutton, owner of a building in the flooded district of Clyde.

Sutton, owner of an electrical, heating and air conditioning company, is still working on flood repairs. He provides one of the few glimmers of life in a district where rows of gutted, vacant stores give the impression of a ghost town.

In Chimney Rock, no businesses were flooded, yet the town received $150,000. In Crossnore, no businesses were flooded, yet the town received $107,000. Money was used for projects like a new fountain, a parking lot for tourists and getting National Historic Designation.

In Canton, flooding devastated nearly 20 businesses in downtown proper. The town has paid for its own National Historic designation. Canton lacks adequate parking and doesn’t have a fountain either.

“It’s tough to think somebody else is getting money this town could have really used,” said Rita King, an optometric assistant at Mountain Eye Associates in Canton. King’s building was swallowed by the flood. A framed photo collage in the lobby documents the tattered remains of the office when the river receded. By the front door, arrows five feet up the wall commemorate the high water mark left by Hurricane Frances and then Ivan.

Road to recovery

The primary purpose of the $5 million was to generate economic activity in towns where flooding had hampered businesses. Any town or county declared a disaster area by the Federal Emergency Management Agency was eligible for the business redevelopment grants. But just because there was flooding somewhere in the county doesn’t necessarily mean the business district flooded.

In Crossnore, water washed out five of a business’ 20 parking spaces. In Chimney Rock, the greenway along the river bank was closed for six months. In Bryson City, one business was flooded with a foot of water and had to close for two weeks, while a few others lost a couple of days of revenue because the street outside their store was flooded.

In Hot Springs, flooding was a bit worse. Hot tubs at Hot Springs Spa and Resort flooded, one restaurant got water in its basement, and one bar had a few inches of water in the main part of its building and its rental cabins. In Marshall, storm water backed up in businesses’ basements. In Spruce Pine, a lumber company that employed three people flooded and closed.

But whether there were lasting negative economic implications from these scenarios is unclear. People from each of the towns cited above said that business activity has returned to normal in their town.

“We had a couple of our businesses that had very minor flooding,” said Hot Springs Mayor Deborah Ponder. “Compared to other counties we were very lucky. Businesses did suffer, but they were able to open back up.”

O’Neal Shelton, president of the Madison County Chamber of Commerce, had a similar assessment for both Hot Springs and Marshall, which received $154,000 and $146,000 respectively.

“It seems like everyone is up in the full swing of operation. Economically, we are back to full force,” Shelton said.

Meanwhile, throughout Haywood County, the flood hit more than 60 businesses. It had a spiraling effect on the economy and the towns continue to suffer. “There is much more recovery to go,” said John Johnson, owner of Data Management, a flooded bookkeeping business in Clyde. “Here it is a year later and there are businesses just now starting the rebuilding process.”

Even businesses that didn’t flood nearly closed due to lack of activity, such as No. 81 Main Street, a restaurant and bar in downtown Canton.

“We lost 90 percent of our business for five months,” said Arun Krishnan, owner of No. 81 Main Street. “That can really put a small business under. There were times we didn’t think we would still be here.”

A year later, Krishnan said business has only returned to 50 percent of its pre-flood levels. Some businesses aren’t returning at all, at least not to Canton and Clyde. Everything from Log Cabin Restaurant in Canton to Britthaven nursing home in Clyde have left those towns for good, leaving empty buildings and a void on the town’s tax rolls.

“Some of our neighbors have moved back in and we rejoice with them, but still today, the Haywood Community College outreach building, Bellsouth, Glance Street Apartments, Britthaven Rest Home and countless others still sit abandoned,” said Angie Henley, owner of Angie’s Dance Studio in Clyde. “It is a constant reminder of not only what happened, but how fragile life can be.”

A flooded park did not top concerns, and a business with flood damage only to the parking lot was lucky.

Define flooding

The Rural Center committee reviewing grant applications had little concrete data to go by when measuring the flood impacts of one town versus another. The reference to flooding in some applications boiled dowto a basic assertion at the bottom of the last page: “I certify that the business area described was flooded by the hurricanes of 2004.”

Chimney Rock Mayor Peter O’Leary signed the statement alleging his town’s business district was flooded when in fact no businesses were flooded.

Given the open-ended nature of the application — one that required no quantifiable definition of flooding — O’Leary didn’t exactly lie when he said the business district flooded. The river washed out part of the town’s river walk, which is a significant tourist draw downtown.

In Marshall, flooding had a different definition, according to an alderwoman.

“Our flooding was from storm drain issues. Our storm drains empty into the French Broad River, so when the river gets up so high, it can’t drain and backs up in town,” said Marshall Alderwoman Aileen Payne.

But business owners in Canton had a more stringent definition of flooding.

“We lost our entire stock,” said Teresa Anders, owner of Treasures consignment store in Canton. “I don’t think of three inches as getting flooded. I think there’s quite a difference in the gutter getting backed up and getting three inches of water in the basement and the river coming up head high.”

In Bryson City, water lapped at the curbs downtown but only got inside one business. Nonetheless, the Swain County commissioners passed a resolution to accompany their grant application stating that the business district “experienced severe flooding by the hurricanes of 2004.”

Ken Mills, the Swain County economic development director, said severe accurately describes Bryson City’s flooding. He described the flooding in Canton and Clyde as “catastrophic” by comparison.

But again, Canton business owners have a different standard.

“If two inches of water counts as getting flooded, then I got flooded, too. But seeing businesses completely inundated neck high in water, we didn’t see ourselves as getting flooded,” said Canton restaurant owner Arun Krishnan.

But under the Rural Center’s subjective interpretation of flooding, Bryson City’s water in the streets qualified.

“The business district we’re talking about, there was water all in that. If it hadn’t flooded, we couldn’t have gotten hurricane relief money,” said Bryson City Town Manager Larry Callicutt. “We didn’t have any major damage, but it was flooded and that was part of the requirements.”

Backtracking

Bill McNeil, the project manager with the Rural Center in charge of the flood grants, said the grant applications weren’t consistent. There was no list of flooded businesses, no estimated damages, no list of closed or condemned buildings and no reference to how high the water rose.

One reason some towns lacked this documentation was because there weren’t many flooded businesses to document. A favorite approach instead was simply listing all the businesses in the downtown area targeted for redevelopment, regardless of whether they were flooded.

“Some listed the businesses, but didn’t also say ‘here is the damage that each one experienced,’” McNeil said.

After the Smoky Mountain News began requesting documentation on the extent of flooding in each town, McNeil has asked towns that left this information out of their applications to provide it.

“We are looking for mapping that showed how far the flooding might have extended,” McNeil said. “I have recently asked all the consultants to give me the extent of the flooding in the form of a map.”

Documentation could prove problematic, as some towns aren’t quite sure themselves how much flooding they got, as was the case in Bryson City.

“We had to survey businesses to determine how much flooding there was. I know at least half a dozen businesses had physical damage,” said Ken Mills, the economic development director in Swain County.

Bill Gibson, who works in Bryson City and was also on the Rural Center’s grant committee, had a similar account.

“I think somewhere on the order of 20 or 25 (businesses) were closed for a half a dozen days. Maybe half a dozen got permanent damage,” Gibson said.

Door-to-door interviews in the business district revealed a different scenario, however. A vacation rental office was flooded with a foot of water and was closed for two weeks while making repairs. A storage-shed sized building that serves as an office for a self-serve car wash might have received water damage, but the owner could not be found and it is unclear whether the office is regularly occupied.

Only a handful of businesses face streets that had flooding and therefore were closed until water receded, which took about a day, not a week.

Bryson City Town Manager Larry Callicutt had a more accurate assessment of the flooding his town: “It didn’t get up in the buildings, but it was in the streets.”

There were discrepancies over the flood impacts in Crossnore as well. A consultant hired to write the grant had a different version of the floods than the town officials.

“They had a lot of flood damage to a historic fountain that was in the center of town,” said Scott Lane with the Louis Berger group based in the Raleigh-area.

Crossnore Mayor Tudor Vance said it wasn’t damaged.

“It’s still there,” Vance said. “Yes, it works.”

Casting a wide net

At the outset of the $5 million grant process, McNeil decided to set a $700,000 maximum per grant, per community. Without some type of cap, the hardest hit towns could have sucked up all the money, leaving little or none for other areas, said McNeil.

“We struck what we thought was a balance between awarding all the funds to the most recognized and heavily damaged communities and leaving none for any other communities,” McNeil said.

The four hardest hit towns — Canton, Clyde, Asheville and Newland — would each get the maximum $700,000.

“The others essentially competed for available funds based on the strength of their redevelopment plan and the feasibility of it, the likelihood it would succeed,” McNeil said.

The extent and impact of flooding wasn’t the sole criteria, McNeil said.

“We did not use a mathematical dollar value,” McNeil said. “It may not be numerically proportionate to what Canton, Clyde and Biltmore and other areas suffered.”

Bill Gibson, a Jackson County resident who was on the grant committee, said expediting the grants was one of their goals, rather than delaying needed help with a lot of bureaucratic red tape.

“This was a really, really fast process,” Gibson said. “The Rural Center is nimble on its feet. It can get money out in a hurry.”

Gibson said the $700,000 allotment for the four hardest hit towns was generous.

“That’s almost $3 million out of the $5 million guaranteed to the towns hardest hit,” Gibson said. “Our purpose was not necessarily to deal with the big picture flood damage like in Canton and Clyde. Our purpose was to try to help business redevelopment.”

Gibson said the Rural Center wanted to “throw a wide net” in encouraging grant applications.

They said ‘submit it’

Somewhere in that wide net, the Rural Center failed to clearly stipulate that the General Assembly intended the money to go toward towns that experienced negative economic repercussions as a result of the storms. Some towns saw the Rural Center grants simply as economic revitalization only loosely connected to flood impacts.

“It is not flood relief money. It is business redevelopment money,” said Peter O’Leary, the mayor of Chimney Rock. “It’s tied to the hurricane and to the flooding, but it is a business redevelopment grant.”

O’Leary said no one can fault his town for applying.

“I don’t make the rules. If someone says there is a grant available to help redevelop your downtown and we can take advantage of it, that’s what we did,” O’Leary said. “We heard about this grant and filled out an application The Rural Center is the one that approved it.”

Chimney Rock is going to use the money to create a downtown parking area for tourists.

“Personally, I think it is a really good program and it benefits us tremendously. We were really happy with it. It will be a big boost for us,” O’Leary said.

Like O’Leary, Swain County economic development director Ken Mills said his community can’t be faulted for applying for the grant.

“To be honest, I didn’t think we’d get it,” Mills said of the grant. “We had a lot of business disruption, but nothing to the point they couldn’t operate after a day or two.”

Mills said he went to a workshop in Asheville where Rural Center representatives explained the grant process. Mills said he questioned whether Bryson City would be eligible.

“They said ‘submit it’,’” Mills said. “They were excited about our application.”

Cause and effect

Since the Rural Center did not require additional documentation on the extent or severity of the flooding, committee members making grant selections were left to assume or imagine exactly what kind of floods hit each business district.

When it came time to announce the grants, the rural center somehow extrapolated flood damage on to some towns that didn’t happen. Such was the case with Chimney Rock, which got $150,000 for a downtown parking lot.

“The existing parking area was damaged by hurricanes and related flooding in 2004,” stated a Rural Center press release announcing the grant.

But the parking lot never flooded.

“It didn’t sustain any direct damage from the flood,” O’Leary said.

Chimney Rock is not the only town where the Rural Center hinted at flooding that didn’t exactly happen. The Rural Center held press conferences in every community receiving grants in early September. At each press conference, Rural Center President Billy Ray Hall made a similar statement: “We want to bring vitality to business areas that flooded last year and to see businesses in these locations flourish.”

It was never determined, however, whether some towns ever lacked vitality as a result of flooding. Some towns claimed a disruption to the tourism industry due to perceptions of flooding.

“We were affected in sales from people not coming,” said Anne O’Leary, owner of Bubba O’Leary’s General Store in Chimney Rock.

In Hot Springs, a set of cabins flooded and had to turn away guests with reservations who then didn’t spend money in the town. Plus the closure of damaged tubs at the spa meant fewer tourists for a while.

“That’s a huge big thing,” said Hot Springs Mayor Deborah Ponder.

But in Canton, businesses are still claiming a disruption.

“It’s been over a year but people are still under the impression there is no point going to Canton because it was totally destroyed,” said Krishnan, the restaurant owner.

Rita King at Mountain Eye Associates in Canton said some patients still haven’t filtered back a year later. And a Canton hardware store still has racks of discounted flood merchandise.

But according to McNeil, all the towns needed help.

“These areas need a shot in the arm,” McNeil said of towns receiving grants. “It was designed to look at areas that were flooded to prompt a plan for what would make that area stronger as a business area and business environment.”

If a town was depressed on one hand, and it met a subjective definition of flooding on the other, it was eligible. And once eligible, grants were awarded based on the merit of the idea, not necessarily the extent of flood damage. That wasn’t the premise that Rural Center President Billy Ray Hall alluded to back in May, however.

“These grants ... can get working people back to work and businesses up and running in communities that can’t afford to lose even one business or job,” Hall said in a May press release announcing planning grants.

Some towns, while subject to limited flooding, did claim lost jobs. In Spruce Pine, a lumber yard that employed three people flooded and subsequently closed, according to Spruce Pine Town Manager Richard Canipe. But Canipe wasn’t overly concerned.

“We are pretty much back to normal with the exception of the loss of one business,” Canipe said.

In Haywood County, dozens of jobs were lost due to flooding in Canton and Clyde.

“There was a tremendous impact, an incredible impact. It took months to try to recover, and it is just now starting to come back,” said Haywood County Economic Development Commission Director Mark Clasby.

Doubling up

While some towns saw little business damage, public infrastructure in the business district was flooded and suffered negative consequences. The only building that flooded in the Crossnore business district, for example, was the town-owned community building. It got eight inches of water in it, and the floor had to be replaced as well as exterior landscaping. The town will get $30,000 from the Rural Center to fix up the community building.

“This project will provide new plumbing, flooring, and roofing on the existing structure, as well as creating a new porch and landscaping to enhance the many festivals and music events that take place here annually,” Crossnore’s application stated.

But public infrastructure is eligible for federal money from the Federal Emergency Management Agency, and as a result, Crossnore got $19,000 from FEMA to repair damages to the same community building. According to the town clerk Nell Aldridge, FEMA money paid for most of the repairs.

In Chimney Rock, the town-owned river walk was damaged. It cost $60,000 to repair. FEMA paid $40,000, a community association paid $5,000 and the town paid the rest. O’Leary said the town spending some its own money on the river walk — roughly $15,000 — justified the $150,000 grant from the Rural Center for a tourist parking lot.

The biggest hit Bryson City faced was the loss of a downtown park, Mills said. Water destabilized a foot bridge leading to a park on an island in the middle of the river, shutting off one of downtown’s core assets. County and town officials did not know the bridge was destabilized initially, Mills said. While it likely would have qualified for FEMA money since it was public infrastructure, by the time a bridge engineer with the Department of Transportation made the determination, it was too late to apply to FEMA. Instead, Bryson City is getting $150,000 from the Rural Center for the bridge.

The Rural Center press release announcing the grants last month cites damage to public infrastructure, not just private businesses, as a valid criteria making a community eligible for grants.

“It gives priority to business areas with significant flood damage to buildings and public infrastructure, communities with high unemployment and poverty rates, and areas with significant job losses in the past two years,” the press release stated.

Another shot

People interviewed about damage in their town were quick to qualify that it was nothing like Canton or Clyde. Even Newland, which got the same $700,000 maximum as Canton and Clyde, wasn’t as bad, according Tommy Burleson, the county planner in Avery County.

“We don’t want to compare with Canton. I don’t think we were on par with Canton. Theirs was sort of a different deal,” Burleson said.

Incidentally, more Rural Center money is funneling into downtown Newland than Canton. On top of Newland’s $700,000, another $150,000 was awarded to Avery County to be spent in downtown Newland, namely for a driveway to the health department. The old health department was destroyed in the flood and is being relocated to a new site downtown. An access road to the health center will provide access to downtown businesses, spurring people to combine shopping or going out to eat in conjunction with a visit to the health department, Avery County’s application asserted.

Canton Mayor Pat Smathers said he is not in a position to judge whether or how much other towns are entitled to.

“I don’t see it as a competitive nature with Bryson City or Hot Springs or Marshall. I don’t know what their situation is,” Smathers said. “If they got redevelopment money from the Rural Center, that is up to the Rural Center and them.”

Smathers said the state has been good to Canton so far.

“Everything in the foreseeable near future that we have asked for, we’ve gotten,” Smathers said. “As we move forward, we might ask for some money, but there is nothing right now that we haven’t requested that the state hasn’t come forward with.”

Bill McNeil, project manager for the $5 million in grant funds, said there could be more opportunities down the road for Canton or Clyde to get money.

“We would be willing to work with any community that has unmet needs and search with them for where they might be able to come up with the resources,” McNeil said. If any of the projects approved out of the $5 million fall through, the money will go back on the table.

“It is possible some of the projects that have been approved will not mature, and the money would be returned, and we would be delighted to recommend to the committee that it go toward some of these other communities,” McNeil said.