Economic impact on Russian River businesses starts to emerge after last week's flood
As businesses clean up, the economic impact of last week's major flood is emerging, one that will bring job and sales and tourist tax losses to the area while placing some operations on a precarious financial footing as they attempt to reopen.
The flooding affected businesses primarily in the tourist hot spots of Sebastopol and the Guerneville area. Sonoma County provided initial estimates over the weekend that 578 businesses suffered a total of $35 million in damages. However, those figures are premature and could change as the extent of the damages continues to be assessed.
Many people in the lower Russian River area, for example, had home-based business, which likely haven't been fully counted, said Al Lerma, business development and innovation director for the Sonoma County Economic Development Board.
“These could be some people who work as an architect out of the homes,” Lerma said.
While the numbers were being compiled, the impacts of the flood were being felt firsthand, especially by the hundreds of workers who were displaced as a result of their employers closing. That included the 60 Village Bakery employees and the 70 workers at Community Market. Both businesses were located in The Barlow shopping district in Sebastopol, which took on several feet of water.
Overall, about 30 businesses were affected to some extent in the city, said Larry McLaughlin, Sebastopol city manager.
Many employees are filing for unemployment compensation.
“We all applied for unemployment,” said Karly Church, manager of Crooked Goat Brewing, a popular Sebastopol brewpub that was overtaken by 5 feet of floodwater.
A GoFundMe account was set up to raise $50,000 for its 15 employees, while a benefit beer-and-bingo bash was held Monday night at GravSouth Brew Co. in Cotati.
“The majority of our team has been with us since the beginning,” Church said. “We have a really awesome team and we don't want to lose them.”
There is no timetable to when Crooked Goat will reopen.
“I don't know if it will be weeks or months,” Church said.
Crooked Goat, which first opened in 2016, has flood insurance to cover the loss of contents, she said. It's coverage that most other businesses declined.
Community Market, a nonprofit cooperative, is trying to get revenue back as quickly as possible as the Sebastopol store is responsible for about 75 percent of its overall income, said Melissa Minton, the market's community manager. It also has a Santa Rosa location.
“It's definitely going to be a financial hit, no matter how you look at it,” Minton said.
The store is considering selling $500 gift cards that could be redeemed for $550 in purchases to help with cash flow. It lost $250,000 in products from the flood, although only 6 inches of water got inside.
All of the drywall has to be replaced and the kitchen and refrigerator equipment has to be cleaned and sanitized. Minton hoped the store would reopen in three to four weeks, barring unforeseen issues.
Its closure will impact local specialty vendors that are stocked at the store, which is known for its organic and natural food items. That includes Victorian Farmstead Meat Co., which has a booth inside the store.
“There is a ripple effect for having to close,” Minton said. “We are not buying from all these local people.”
The impacts also will be felt especially hard with the closure of Village Bakery, which has about 200 retail accounts in the area, from the Stark Reality Restaurants to grocery stores such as Andy's Produce Market, Manager Lisa Schroeder said.
“These businesses need to run and they still need to stock their shelves,” Schroeder said.
There is no timetable to when it may reopen.
“This is something you don't have a manual for,” she said as she surveyed the damage Monday. “It's overwhelming.”
Luckily, the large-scale and expensive ovens used to bake the breads were not damaged by the water.
With the spring tourist season around the corner, local officials are getting the word out that many businesses remain open in the area, despite the photos and videos of the flood damage. They fear businesses will see a decrease in visitors, as many did after the October 2017 wildfires.
The main retail stretch along River Road in Guerneville was largely unscathed, and businesses such as the Highlands Resort and the Applewood Inn and Spa are operating for overnight stays. The Boon Hotel and Spa also cleaned up and quickly reopened.
“It's my priority today to get a list out of what's open,” said Elise VanDyne, executive director of the Russian River Chamber of Commerce. “These pictures have shown nothing except the bad news.”
A decrease in business means less tourism and sales tax dollars, though the effect from the flood is not expected to be that severe. Sebastopol, for example, took in $3.8 million in sales taxes last fiscal year, McLaughlin said.
“We don't think it will be a significant revenue loss for the city,” he said. The city will have a better handle on the loss when it tackles its annual budget in the spring.
As the cleanup continues, some businesses expect to be closed at least for several weeks, if not a month.
“It's way worse than I anticipated,” said Berlin Fisher, whose Third Street hair salon in Guerneville was among the casualties, though he managed to save his chairs and some equipment by moving them upstairs ahead of the flood. He said he hopes he can have his shop back open in about three weeks.
Staff Writer Mary Callahan contributed to this article. You can reach Staff Writer Bill Swindell at 707-521-5223 or firstname.lastname@example.org.