Businesses Incur Losses After Chemical Spill
10 May 2014
By Jonathan Mattise, The Associated Press
Restaurants and storefronts are buzzing in Charleston again, but
many still haven’t filled a financial hole after chemicals sullied
their running water and forced them to close several days in
The Jan. 9 chemical leak left 300,000 people without safe drinking
water for four to 10 days, spurring health departments to shut
down businesses that depend on clean water, from eateries to
salons. Public fear reverberated weeks and months afterward,
prompting many restaurants to keep cooking with and serving only
bottled water. Some still haven’t switched back.
A Marshall Unicersity study estimated the nine impacted counties
took a $61 million economic hit.
Businesses have sued companies tied to the spill, tried to collect
insurance claims, sought government loans and pursued other
avenues. But the options available have left some businesses
little confidence of recovering what’s been lost.
“I don’t foresee ever recouping it,” said Deno Stanley, owner of
Adelphia Sports Bar & Grille in Charleston.
Among the tree-lined cluster of small businesses on Capitol
Street, springtime foot traffic is up at Adelphia. Stanley said
out-of-towners are back, and so is customer confidence.
It’s a welcome change, Stanley said, after Adelphia started the
year by losing $38,000 in sales over eight days due to the spill.
Other costs also built up, like buying bottled water for patrons
and changing filters in soda and ice machines, as officials
required. Bottled water is still served, he said.
Adelphia quickly filed a lawsuit after the spill, now one of more
than 60 civil actions targeting the companies involved. Freedom
Industries, the company at the center of the spill, and West
Virginia American Water, the regional water company, are named in
most of them.
Freedom, whose aging tank leaked coal cleaning chemicals into the
Elk River, quickly crumbled into bankruptcy on Jan. 17. The move
deflated hope for many suing the company, since it temporarily
froze their legal actions and has left them watching the company’s
financial resources dwindle from the sideline.
Lawyers for small businesses have admitted any recovered money
will be a drop in the bucket, since Freedom has hundreds of groups
it owes money and limited cash.
American Water Works, the profitable parent of West Virginia
American Water, vowed on its latest earnings report to “vigorously
contest the lawsuits.” Its West Virginia revenue dipped by $5.9
million in the first quarter amid the spill.
Adelphia’s insurance policy wouldn’t pay out a claim, either,
Stanley said. Across the area, it was hit or miss whether policies
would cover interruption of business losses from the spill, said
Matthew Ballard, president/CEO of the Charleston Area Alliance, a
local chamber of commerce.
Public grant money wasn’t made available for businesses that took
the financial hit.
The Federal Emergency Management Agency, which provided meals and
water after the spill, eventually approved West Virginia’s request
to cover some costs after the state appealed FEMA’s denial. The
aid only included some costs incurred by public agencies and
nonprofits that responded to the crisis.
State and federal officials lauded two types of low-interest loans
to help out. But neither lent any money to impacted West Virginia
Last legislative session, which started three days before the
spill, officials reacted by creating a short-term, low-interest
loan program for small businesses during declared emergencies.
Some businesses asked about the aid, but couldn’t get any because
lawmakers didn’t put any money into the program, said Department
of Commerce spokeswoman Chelsea Ruby.
Instead, the state referred people to the federal Small Business
Administration, which set up economic impact disaster loans. Ten
businesses applied; six withdrew their applications, and four were
denied, said administration spokesman David Hall. The names of
businesses that applied and reasons they were denied are
confidential, Hall said. But credit history and ability to repay
the loans are taken into account.
David Fazio, whose restaurant Fazio’s has been a Charleston staple
for 35 years, said a loan is not what the crisis warranted,
“That’s money I lost and didn’t deserve to lose,” Fazio said.
“Neither did anybody else.”
Fazio’s insurance would not cover his restaurant’s losses, either.
Signs at the Italian eatery still assure that they’re cooking with
bottled water. It’s a commitment that Fazio said has cost $10,000
over four months in extra bottled water and ice.
The public wasn’t only concerned about eating or drinking the
water. Pauline’s House of Curls, located in Danville, was closed
for eight days in January. For a short while after, some customers
still feared using the water for hair styling, said stylist Paula
Workers who lost hours because of the spill did get some reprieve.
Through Feb. 21, United Way of Central West Virginia distributed
about $112,000 in donations to 625 workers near minimum wage whose
businesses closed, said local United Way President John Balangee.
State tourism officials think they found reason for optimism,
In an independent survey funded by the state, only one-third of
residents in various surrounding markets mentioned the spill when
asked what they had heard about West Virginia recently. Of those
who were aware of the leak, just one in three said it made them
less likely to visit.
Only one closed business, a Charleston restaurant, publicly linked
its shutdown to the spill.
- See more at: http://www.wvgazette.com/article/20140510/GZ01/140519920/1419#sthash.GirXY7PE.dpuf