Route to Recovery

A trip through the epicenters of the recession

Rural decay in Forrest Gump’s stomping grounds

Nov 12, 2009 23:07 UTC

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BAYOU LA BATRE, Alabama — While driving around Bayou La Batre looking for shots and film footage to accompany our stories on the woes of the local shrimp fishing industry, we were struck by the decay and decline here.

Homes were crumbling and falling apart at the seams, with the occasional boat or car stranded in a garden or alongside the road. All set against a backdrop of a lush coastline and beautiful creeper-covered trees. Some of the area might look familiar to those who have seen the film “Forrest Gump,” parts of which were filmed here.

The occasional restaurant or business that has not been in business for many years, the empty building a testimony to a high water mark that this community reached some way back and which has never hit since.

Bayou La Batre is a town of some 2,700 people in Mobile County, Alabama. According to the U.S. Census Bureau, the median household income here in 2007 was $37,575, more than 25 percent below the national median income of $50,740.

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Some 20.8 percent of people in the county were below the poverty line in 2007, compared to the national average of 13 percent.

Particularly on a gray day, and it was gray while we were there just after tropical storm Ida, the homes abandoned many years ago that are gradually being overtaken by weeds and rotting in the damp salt air were sad to behold.

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Photos by Carlos Barria

COMMENT

This part of America looks beautiful. The ppl in those houses have moved somewhere else. They are still alive. They just need to move out to other places with cities, and jobs. It’s not AIG’s fault. The pics look like nature is reclaiming some of its land, and shifting us around. Who’d begrudge?

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Following shrimp from the shore to the plate

Nov 12, 2009 22:01 UTC

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BAYOU LA BATRE, Alabama – We spent the best part of a day down here in the seafood capital of Alabama learning the local shrimp fishing industry and the challenges it faces.

From the shrimp boat to the processor and distributor, we followed the shrimp on their journey all the way to the kitchen and the plate in a local eatery, The Lighthouse Restaurant.

Thanks to the kindness and of local members of the shrimping industry and others, we were able to see how shrimp journey from the shore to the plate.

This is a way of life that locals say is under threat from imported farm-raised shrimp and they maintain that without some form of help ever fewer U.S. shrimpers will ply the waters of the Gulf of Mexico.

Photo by Carlos Barria

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COMMENT

I LOVE Gulf Coast shrimp! We get it here in Toronto at Whole Foods and it beats the hell out of Asian farmed shrimp for flavour — and for eco-friendliness. Vast mangrove stands in Asia are wiped out to make room for shrimp farms. It’s a shame given all the habitat loss as well as the fact that these very mangroves are what can absorb the shock of tsunamis an help protect villages in the tropics. We support North American jobs, as well as the environment — and promote safety overseas — when we buy Gulf Coast shrimp.

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No country for young men

Nov 12, 2009 20:39 UTC

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BAYOU LA BATRE, Alabama – Steve Patronas said this is not a business for the young.

“If you look around at who’s running the shrimp boats around here, ain’t none of us young,” he said, while moving about the deck of his small boat the Terry Lee, which he uses to trawl for shrimp in the bay around Bayou La Batre. “We’re all of us wrinkled old men.”

Patronas, 67, said his grandfather was born in 1844 and came over from Greece to this part of Alabama during the Civil War. “I’m the youngest son of the youngest son,” he said.

“My daddy was born when his daddy was an old man and it was the same with me.”

Patronas used to work at a paper mill that is now a “bare piece of dirt because they moved it overseas where they could make the paper cheaper.” He has been shrimping on and off for decades, but what he catches barely covers his bills.

“I get less than half now of what I got back in 1978 for a pound of shrimp,” Patronas said.

Patronas is one of a dwindling number of shrimpers working the coast here, fishermen who complain that their livelihood is being squeezed by farm-raised shrimp imported from Vietnam and China.

“I do this because it’s what I love to do,” he said, looking out toward the Gulf of Mexico on a windy, grey day. “But nowadays I spend more time on the couch watching TV than I should.”

Patronas said there are younger men in the area who would like to be in his shoes.

“Young men have said to me that they would like to have my boat if they only had the chance,” he said. “I tell them that I’d give it to them but they wouldn’t be able to do anything with it.”

“Sure, they could fill it up with gas this week, but without a good catch they wouldn’t be able to fill it up next week,” he added. “There’s just no way they can make this work.”

Greg Ladnier, owner of shrimp processing company Sea Pearl Seafood Co Inc, which is just a few miles from Patronas’ boat, said that it is rare to find a shrimp boat owner nowadays who is under 50.

“The lack of younger men in the industry is a problem,” he said. “But boats cost a lot of money, insurance is expensive and shrimp prices are way down so no one will lend them the money to get started.”

“But even if banks would lend them the money, if you can’t make any money why go into business?” he added. “That’s basic economics.”

COMMENT

Why don’t the American’s (or North American’s for that matter), get on board and begin farming them as well? Not just shrimp but other species as well.
They don’t have the market cornered on farming fish and shrimp.
I too check my seafood and try to buy as much local or national as possible. If I knew there was a farmed fish or shrimp brand here in North America then I would support them even if it cost me more.

Posted by Scott Marshall | Report as abusive

Downturn brings fresh pain to struggling Gulf Coast shrimpers

Nov 12, 2009 20:29 UTC

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BAYOU LA BATRE, Alabama – Long before America slid into recession in late 2007, shrimp fishermen here on the Gulf Coast had been struggling to make a living.

“Twenty-odd years ago, if a shrimp boat came in with 100 boxes of shrimp, they’d consider that a good catch,” said Avery Bates, vice president of the Organized Seafood Association of Alabama (OSAA). “Now if you come in with 400 you’re barely scraping by.”

The main problem that shrimpers down here say they face is farm-raised shrimp imported from countries like Vietnam or China, or government-subsidized shrimp from Mexico.

“We take it right on the nose,” Bates said. “A lot of our boats have went right out of business.”

Bates said that back in the 1980s, some 4,500 U.S. shrimp boats trawled the waters of the Gulf of Mexico. Now, that number is down to 1,200 and dwindling fast.

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The complaint here is similar to one you will here from manufacturers around the country: a cheaper imported product has undercut the market and left local producers fighting to stay afloat. Shrimpers in this small town known as the seafood capital of Alabama say they have had to catch ever more shrimp over the years to keep up.

“The last good year we had around here was 2000,” said Greg Ladnier, owner of Sea Pearl Seafood Co Inc., which processes shrimp delivered by local shrimpers. “Back then a lot of farm-raised shrimp was affected with diseases and we had a good year for catches. So we were able to make up the difference.”

“Since then things have been bad,” he said as workers cleaned his plant following the heavy rains brought by tropical storm Ida. “Unless something changes what’s going to happen is already happening all around us. “

“As the price of shrimp goes down it’s harder and harder to make a profit and keep on going.”

High fuel costs and high maintenance costs have added to shrimpers’ woes and the recession has only made things worse. Shrimp is a luxury item and prices have slumped as American consumers have cut their budgets.

“Shrimp is like steak or hamburger,” said Ernie Anderson, OSAA president as workers at his distribution facility box up frozen shrimp to be hauled to customers. “People don’t have to eat it and it’s something they can do without if they need to spend less money.”

While readying the shrimp boat that he works on for a trip out into the Gulf – Gulf shrimpers will often go out for 20 to 30 days and freeze the shrimp they catch as they go within 30 minutes of catching it – Bob McClintoc said that he had just been looking through the boat’s log back at the year 2000 and regretted that he had.

Back then, the boat would sell “1620s” – meaning shrimp that weigh in at between 16 to 20 to the pound – for $7.40 per pound. Now that catch sells for $2.80 a pound.

“It’s enough to make you sick,” he said. “This is killing us.”

Anderson said that the local industry’s hopes for survival are currently pinned on a state law, which will come into effect next January, that will require restaurants to tell customers where their seafood comes from when asked.

“We believe that given a choice, most people will prefer domestic wild caught shrimp to farm-raised imports,” he said. “That should at least allow us to increase our market share just enough to stay in business,”

He added that the U.S. shrimp industry is lobbying for a national bill along the same lines, but that the restaurant industry and retailers are resisting it.

“Restaurants are not keen to have American consumers know what they’re eating,” Anderson said.

In the meantime, shrimpers like Steve Patronas say that they are caught between the high costs and low prices for their catches that are slowly choking off their way of live.

“Come the spring if shrimp prices are where they are now and fuel prices go up,” he said, standing on the deck of his small boat for shrimping close to shore, “then my boat isn’t going out.”

Photos by Carlos Barria

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COMMENT

I have to agree with Al.Don´t forget the American innovative spirit.If we are getting undercut by cheap farm-raised, poor quality. That sounds like an opportunity to me. Define your product as wild caught, of course eco-friendly(fished with turtle extruder), better quality, fresher and better tasting shrimp. Then define your market and sell to those restaurants who understand the valuein your product. The marketing may take some work but I can almost guarantee that you can get the price you deserve especially if you throw in some of that american first class service. Let´s quit blaming others and get down to doing what we do best.

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Facing tough credit market, casino owner will go it alone

Nov 11, 2009 15:49 UTC

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GULFPORT, Mississippi – Before the recession hit, Rick Carter was hoping to borrow money to renovate a hotel damaged by Hurricane Katrina.

Now he says the stringent conditions and high borrowing costs banks want to charge him amid the ongoing credit crunch mean there’s no way he’d sign up for a loan.

“There’s  no way I can find anyone to lend me money at a reasonable rate,” said Carter, co-owner of the Island View Casino Resort just a stone’s throw from the Gulf of Mexico. “If we’re going to do anything we’ll fund it ourselves.”

Carter’s casino was originally located on a barge just offshore at Gulfport. But when Hurricane Katrina came through here in 2005, it lifted his casino off its moorings and dumped it on the beach some way off.

In the aftermath of that unparalleled storm, local politicians got together and lobbied for the passage of the Gulf Opportunity Act, which provided tax incentives for the return of developers and investors. Mississippi also decided to allow casinos to build up to 800 feet from the water in order to avoid a repeat of Katrina’s destruction.

Like other casino operators, Carter decided to reinvest on the Gulf Coast. He and his partner Terry Green invested $300 million in their casino resort and golf course.

“Thanks to our local politicians and the good people in Washington, we came back,” Carter said, sitting in a restaurant in the casino. “They saved the Mississippi Gulf Coast. If they hadn’t taken action then this would be a ghost town.”

Now, he is not so sure of the “good people” in Washington. The U.S. government has pumped trillions of dollars into the financial system to help keep it solvent, but he can’t get a loan without paying exorbitant interest.

“It’s amazing to me that after all the money that’s gone into bailing out the banks you can’t borrow money from them,” he said. “Instead of lending that money out they’re just using it to prop up their balance sheets.”

“I don’t get that.”

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Carter said that the only real alternative to mainstream financial institutions is borrowing from hedge funds. But they are even more demanding than the banks.

“The problem there is that they charge even more than the banks and they want a stake in your company,” he said. “And we’re not going there.”

So instead of borrowing money, Carter said he and his partner are trimming their sails by cutting back on unnecessary expenses. Casinos in Mississippi have seen their gaming profits slide 11 percent for the year to date, as the downturn has made people less willing to gamble. The Island View’s gaming profits are down, but not by as much as the rest of the state, Carter said, because the number of people coming had not dropped significantly.

The slot machines and poker and blackjack tables certainly seemed busy for a week night.

“But when they come in, they’re willing to spend $90 instead of a $100,” he said. “People are watching their money more carefully.”

Island View has not laid off staff – it employs some 1,400 people — but has cut overtime and postponed investments in order to fund projects like renovating the hotel, which was damaged by Katrina.

“We’re going to fund everything ourselves, even if it means we have to wait a while to do it,” he said.

He added that in the meantime casinos are going to have to get used to a new post-boom world in which there will be less money to go around as the days of easy credit are gone.

“This is going to take a long time to work itself out and the economy is not going to go back to where it was,” Carter said. “People are going to have to get by with a little less and they’re going to spend a little less, including when they’re at the casino.”

“Given the mess this country has ended up in, that’s probably a good thing,” he added.

Photos by Carlos Barria

Click here for more from the Route to Recovery

COMMENT

With all of the large commercial banks holding up the solid efforts of the USA growth one would think a casino with the flow of funds they have could make a bank in it’s self and flee the National they work with. I think it’s time for us to make a major change! Think about this for any business with client flows. They should IMO. Just find find a local non commercial (not a large National size Bank) yet a small local credit union, Small savings and loan type business and offer their clients specials to firm at that location for doing business with them. Then ask all the local small and large savers to switch over to the same small location so they can grow and loan to the local only business making it possible for firms like the one Rick Carter runs able to get loans at 1.5 to 2% over national rates. Yes kick our the fat cat’s and do business with the small firm. Built them up! Loans must be set up for open change as time passes just like passbook savings would. Drive business to the new bank location by 10 or 15 key business firms. It’s a county full of people helping one another to grow the locations of many a firm then not just of one but thousands so in the end you have both the large National moving out without any clients left and the same small bank growing large due to what a city needs to live out of the dark past. Control is only there due to you letting it be! Yes it will take time yet our Nation has that in spades on it’s hands right now. Make your plan and work the plan helping everyone in the process and you can save your city if you wish to yet the Banks who will not lend (from the past greed and fat bonus payments etc) need not stay in business no matter how large they are. It’s your chance to take back the old to a new life do it now and hold the hand of each person who makes your town one of jobs for life! Just think of what one year of your total work on helping your local town do this across our Nation with new jobs built in the process for others. As we must have this change, new ideas and a willing population ready across our country right now to get more back to peace within our lives and local homes, do it now it will grow and come to be as together we can make it work. Happy Thanksgiving to all who make it work! God Bless you all.

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Four years after Katrina, high-cost insurance dogs Gulf Coast

Nov 11, 2009 15:09 UTC

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GULFPORT, Mississippi – It’s been more than four years since Hurricane Katrina lifted the casino barges of this Gulf Coast town at the end of August 2005 and dumped them on the shore, yet locals complain they are still paying a high financial price for that cataclysmic event.

The problem this area faces comes to one that is global – a lack of available credit – and one that is entirely local – a lack of available insurance.

“Insurance is a big issue here,” said Brian Sanderson, president of the Gulf Coast Business Council. “This has been a huge challenge to developing this area to its full potential.”

The local economy here has been sheltered to a certain extent by the presence of two large military bases in the neighborhood, but it is not immune. Unemployment in the Gulfport area is just under 8 percent, versus a U.S. average of 10.2 percent as of October.

“Yes, unemployment is lower than the national average here, but people are still hurting,” said Dave Dennis, president of Specialty Contractors & Associates Inc.

Sanderson said that the local long-term strategy for this part of the Gulf is to become a “Tier One” tourism destination. To attain that goal, the area needs businesses to come in and set up shop. But the cost of insurance effectively puts small businesses off from coming here.

“Insurance is generally available but it is not affordable,” Dennis said.

Insurance against wind damage is the main problem. Dennis said that he is currently paying  310 percent more to insure his home than he did before Hurricane Katrina hit.

“I’m one of the lucky ones who can afford it,” he said. “The cost of insurance means that the local real estate market is not reaching its full potential.”

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And he said that the biggest vendors of the contractor he works for are insurers, instead of any company that provides raw materials.

Gulfport Mayor George Schloegel said that after a major event like Katrina, it was only natural that insurers would be wary of this market.

“After a major catastrophe it generally takes years to get back to the norm,” he said. “As time goes by the market will come back. Insurance companies are always looking for customers and there are lots of customers around here who want insurance.”

Negotiations are underway with insurers on getting back into this market. Sanderson said that insurers need to come and see how construction on the Gulf Coast has changed since Katrina, as buildings near the shore are now usually built on stilts so that tidal surges in storms cannot cause extensive damage.

But there is still some way to go.

“Insurance is the key issue on the Gulf Coast that has kept us from a full economic rebound,” Dennis said.

Pictures by Carlos Barria

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A love of cooking, and shrimp boiled fresh

Nov 10, 2009 14:58 UTC

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BILOXI, Mississippi – Arnie Taranto spent 18 years working in far-flung parts of the world, but returned here to cook good food, simply.

“I felt like coming home and this was what I wanted to do,” said the owner of Taranto Crawfish, located just a few miles from the Gulf of Mexico and its bountiful supply of seafood.

Taranto opened his restaurant in 2002 after working as a chef in places like Singapore and Dubai. His seafood looks as simple as the plain, basic furniture in the restaurant.

“They pretty much pull those shrimp straight out of the water and boil them,” said George Schloegel, mayor of neighboring Gulfport.

The shrimp platter –  highly recommended by Schloegel — consists of two pounds of extremely fresh shrimp, plus boiled potatoes and corn on the cob that have been cooked in the same blend of spices as the shellfish.  A roll of paper towels is at hand as you peel each shrimp individually and chuck the shells in a metal bucket.

“Make sure to ask for all four sauces,” Schloegel said. For the record, they are marinara, tartar, a sauce similar to Thousand Island dressing, plus melted butter with lemon.

The sauces are the perfect accompaniment for the uber-fresh shrimp that arrive steaming at the table. Unless you’re a regular at Taranto Crawfish, you’ve never tasted shrimp this good or this fresh.

Taranto said that none of his staff know the recipe for the secret spice blend he uses to cook the shellfish, potatoes and corn. The spices generate a mild heat in your mouth that steadily grows until it plateaus at a just manageable burn.

“You could kidnap my staff, but you couldn’t get them to give you the recipe because I’m the only one who knows it,” he said.

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The food he serves is popular among locals, “but then half of them are our kin folks,” he said with an easy laugh.

Speaking of which, Taranto said he buys most of his shrimp from family or friends. “We’ve all known each other since we were kids,” he said.

But despite the phenomenal (and reasonably priced) food, Taranto said that business has fallen 30 percent this year because the down economy has resulted in fewer people eating out.

“It’s tough times for some people,” he said. “But all you can do is put one foot in front of the other and keep plugging away at it until things get better.”

Photos by Carlos Barria

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