NEW ORLEANS — It’s almost impossible to find something that everyone agrees on. However, few, if any, could dispute the severity of what took place just about two years ago. Hurricane Katrina delivered a catastrophic and long-lasting blow to parts of the United States, including New Orleans.
As Katrina passed east of New Orleans on August 29, 2005, winds were in the Category 4 or 5 range, and tidal surge was about a Category 5. Though Katrina missed the city, the storm surge caused levee breaches and resulted in the worst engineering disaster in U.S. history.
By August 31, 2005, 80 percent of New Orleans was flooded, with some parts under 15 feet of water. Ninety percent of the residents of southeast Louisiana were evacuated, however, some of the poor and elderly stayed behind.
Marsha Cropper, a long-time New Orleans resident, left her home and evacuated to Baton Rouge, the state capital. She has since returned to New Orleans. While the city is still dealing with the devastation brought on by the hurricane, Cropper decided to get involved with the rebuilding effort. She purchased two coin laundries.
A NEW EXPERIENCE
How does the owner of a travel agency get involved with coin laundries in a city torn apart? “After Katrina, there were stories about all the businesses that were needed,” Cropper recalls. “I realized that laundries were needed in the city and decided to take advantage of the opportunity.”
In addition, she took advantage of the financial incentives available for those willing to re-invest in the city.
“How I got involved with laundries is kind of funny. I was always the one in my family who did the laundry, even if it was one piece at a time,” she jokes.
As part of her due diligence, she visited other stores, talked with operators and read stories about the industry. “I also used coin laundries in the past and critiqued them as if I owned them. Generally, my impressions of coin laundries were somewhat indifferent. There were some good and some bad. I knew that I would want a clean store with outgoing employees to befriend customers.”
Cropper has two coin laundries in New Orleans, one located in Mid-City, the other in New Orleans East, both major districts within the Crescent City.
Before she could ever envision entering the coin laundry business, Cropper had to return home after the hurricane. “For me, we were fortunate; my home had minor damage. However, we couldn’t move back to it for a while because of damage to the surrounding areas and problems with utilities. Of course, when we came back, there were no businesses — no gas stations, groceries, etc. within a five-mile area. You had to drive all over to get to stores.”
She acquired the Mid-City laundry in October 2006, and opened the New Orleans East store early this year. The Mid-City laundry, a 3,000-square-foot store, features 38 dryers and 30 washers. The Mid-City area took a hit during the storm but has recovered faster than some other areas, Cropper says. On a scale of 1-10, with “10” being a total recovery, she says the Mid-City area is about a “6.”
The New Orleans East area, about 10 miles east of the French Quarter, is another matter. “This area is still devastated.” As far as business redevelopment goes in that area, “it’s just us and one gas station for some ways.”
The New Orleans East store was in business prior to the hurricane, but about eight feet of water in the store put an end to that.
“Before Katrina, [New Orleans East] was a family area, with low- to high-income families. It was a good mix of everyone. It was mainly a residential area with some traditional businesses, but the businesses started to run down.
“On a scale of 1-10 in terms of damage [‘10’ being total destruction], Katrina did a ‘10’ here. It was devastated.” Cropper estimates that the area’s population is about 20 percent of what it was before the storm.” However, she’s pushing on.
“I think this area will come back. The city is really pushing businesses to set up in the area. Redevelopment is stressed. Several larger stores may be coming here. If this area turns around, it probably will go more from a family area to a more business-oriented area.”
Eight feet of water in the store meant rebuilding the coin laundry from the slab up, she says. “The construction process wasn’t really that difficult, but the cost of labor and materials has skyrocketed here. The final costs were much higher than the initial estimates. The prices seemed to jump from week to week.”
As far as just getting construction workers to rebuild the laundry, Cropper says, “Thank God for the immigrants. They showed up every day to work.” These immigrants, she adds, continue to work in the area and some have also put down roots in the area.
GETTING TO KNOW YOU
Cropper used street signs to let people know that the New Orleans East store was open. Word-of-mouth advertising also played a key role in letting people know about the laundry reopening.
The New Orleans East store is 2,000 square feet. It has 20-, 30-, 40- and 60-pound washers, as well as 30- and 45-pound stack dryers. “There are absolutely no top loaders. Before I acquired my first store, I visited other stores and came across a top loader store. I noticed that a lot of the machines were down plus some would vibrate when people overloaded them.”
Customers can take advantage of drop-off laundry and drop-off drycleaning services. “Nobody in the area is offering this.” There are no other coin laundries within a two-mile radius, she says, and just two smaller laundries within a five-mile radius.
Cropper says if she could do it all over again she would have built a larger store with more equipment. But she is still happy with the final result.
“The best thing about this laundry is my equipment; the washers have a 16-minute cycle. The equipment is energy efficient.”
Dealing with customers is often an integral part of learning the coin laundry business. For Cropper, because of Katrina, this has taken on a special meaning.
“My clientele is a mix from every walk of life. One lady came from roughly 18 miles away. She said she drove by and saw our cleanliness; that’s why she came.”
A BIG GAMBLE?
Would you try to learn about a new business and run that business in a city devastated by a hurricane?
In July 2006, the Census Bureau put 223,000 people in New Orleans. As of March 2007, 32,000 more returned. This brought the population to 255,000, 56 percent of the city’s pre-flood population. The city is optimistic about more people gradually returning to the region in the next couple of years.
Efforts continue to rebuild infrastructure, pick up hurricane-related debris and restore some level of normality to the region’s residents. Displaced residents continue to wait for federal assistance, various loans and other forms of financial assistance.
The good news is that several major tourist events as well as other forms of revenue for the city have returned. For example, the National Association of Realtors held its convention in New Orleans in November 2006, bringing 25,000 attendees.
As you might image, Cropper is optimistic about things. “I always thought [New Orleans East] was a nice area in the past. Even though there’s just a gas station and the laundry here right now, there’s a bank next to me that the city is pressuring to open up. The city really wants this area to redevelop.
“I don’t think this was a gamble. People used these laundries before Katrina and they need them now even more.”
RUNNING A BUSINESS
Business at the coin laundries is good, Cropper says. “The East laundry needs to pick up more, but we expect it to happen. Mid-City is doing better, but that was also expected. Overall, it’s about as good as could be expected.”
There have been no major business surprises for her. “I spend a lot of time in the stores, overseeing everything. I don’t have any managers but I have some wonderful employees.”
Early challenges have proven to be keeping the machines clean and in working order, and keeping customers happy, she says. “The Mid-City store has older machines, it was 12 years old when I bought it, and it still has the original equipment.”
She enjoys interacting with the customers. “My customer base is really nice, hard-working people who have gone through a tremendous hardship and are still having problems in some cases. Listening to these people is so important. We are the sounding board for these people, my employees help in this way. One of my employees said she talked to a customer for two hours about her situation. I told the employee, ‘I guess she had to vent.’”
A BRIGHT FUTURE
By 2010, New Orleans officials expect the city’s population to be anywhere in the mid- to upper-300,000 range or even low- to mid-400,000 range (both from new and returning residents), as more housing gets into the market.
Developers who take advantage of federal tax credits to build other low-income and affordable housing are expected to continue helping residents return to the region. It’s also hoped that as residents receive federal grant money, they should return to the area.
“The big challenge for the neighborhood is to get the money to rebuild. Things are slow, but they are starting to finally pick up a bit. I think people want to come back to the city. When school starts, I expect more people to return.”
If things turn around, she realizes new laundries may open. “When this happens, with our good locations, parking, lighting and cleanliness, we have an edge on any new stores, plus don’t discount the importance of our friendly employees.
“The Mid-City store will need sprucing up a bit, actually we just started sprucing it up.”
Even though Cropper has only been in the coin laundry business a short time, she knows enough about the industry to realize that it also has a set of challenges to face. “Rising utility rates is the big thing. But I have the answer: we’ll raise prices. I’m not afraid to raise prices. I’ll just tell my customers about the rising energy and water bills. It’s ridiculous here!”
Some may believe that Cropper is just putting on a happy face about her situation. Her actions say otherwise. In fact, she’s considering expansion. “I’m looking for a new store, a smaller neighborhood store, to acquire. Then, I can move the Mid-City store equipment in there and buy new equipment for the Mid-City store. I’m always looking.”
In two years, Cropper will get a chance to see what the coin laundry industry has to offer, and the coin laundry industry will get a chance to view the Crescent City — Clean ’09 is scheduled for June 18-21, 2009, at the Morial Convention Center in New Orleans.
If you’re thinking about attending Clean ’09, fear not, Cropper says. “You definitely should come. We have the best hospitality in the world, plus the best food. This is a fun place to come visit, and a fun place to live.”