Economic impact of Valley fire expected to be deep and lingering
Now comes the rebuild.
This month's Valley fire walloped Lake County, causing hundreds of millions of dollars worth of damage to homes, businesses, ranches and the local economy. A tally of all the financial damage likely remains months away.
Though the flames aren't yet extinguished, public attention already is turning to a new question: How fast and how well can the county — and its economy — bounce back from the third-most destructive fire in state history?
Even as firefighters last week battled to complete their containment of the 76,000-acre blaze, area residents, emergency officials and contractors gathered on the football field at Middletown High School to discuss the next phase: the cleanup, the rebuilding and the means of paying for it all. The involvement of federal aid, made possible by President Barack Obama's disaster declaration, is expected to greatly boost the reconstruction efforts.
While the destruction and displacement have taken a heavy toll, local officials insist the county will rise from the ashes and come back stronger. They even predict that the coming replacement of lost homes and businesses will mean a shot in the arm for local construction workers, contractors and building materials suppliers, likely across the North Coast.
'This massive rebuild is really going to fuel our economy in a number of ways,' said Jack Long, the county's economic development manager.
Because of slower times, many of the county's construction workers for years have had to travel 'over the hill' for jobs, Long said. But with the coming reconstruction, 'we're going to have plenty of work to keep them busy for a couple of years.'
However, officials don't expect to see much construction this year. After four years of drought, the rainy season at last could come in less than two months. The first tasks for the affected land owners will be a massive cleanup effort and work to control erosion in the denuded hill country.
The fire hit Lake County as it was finally making economic headway after a prolonged downturn.
Among North Bay counties, Lake was the last to 'get itself off the mat in the last recession,' said Sonoma State University economics professor Robert Eyler. Its real estate sector, tourism industry and job market all have come back far slower than those of nearby counties.
How Lake County's economy fares after the fire will depend on the answers to a number of questions, Eyler said. They include: How many fire victims will pull up stakes and exit the area? How many homeowners and businesses will choose not to rebuild? And how will outside investors factor in the risk of future wildfires when sizing up the county's potential?
'Will that drive away investment in both tourism and new businesses?' Eyler asked.
Melissa Fulton, CEO of the Lake County Chamber of Commerce, dismissed such questions and insisted that the fire has forged her neighbors 'into one huge force that is going to make this county better than it has ever been.'
'I think people outside of Lake County will be surprised by the resilience and the fortitude of the people who live here,' Fulton said.
The Valley fire to date is blamed for four deaths and the destruction of more than 1,900 structures, including 1,238 homes, or roughly 3 percent of the county's housing stock. It was the third of three major fires in the county this summer that together have burned more than 250 square miles.
In his request for federal disaster assistance, Gov. Jerry Brown noted some key measures in which Lake County typically lags the state: 25 percent of its residents live in poverty, versus 16 percent for all of California; unemployment stands at 8.3 percent, versus 6.2 percent; and the median household income is $36,548, versus $61,094.
The economy for the county of nearly 65,000 last year amounted to roughly $1.8 billion, according to Moody's Analytics. In comparison, Sonoma County, with a population of a half-million, had $23.4 billion in economic activity last year. Sonoma's median household income was $63,356, according to U.S. Census data.
Measuring the Valley fire's impact on the Lake County economy has barely begun. But a survey of affected businesses suggests significant costs. They include:
— The destruction of Harbin Hot Springs, the county's 10th largest employer, with about 285 workers, according to the clothing-optional resort's website. County officials say leaders of the nonprofit religious group that operates the resort have vowed to rebuild.
— Calpine suffered damage to cooling towers and other facilities at five of its 14 power plants at The Geysers geothermal fields. The system is now operating at about two-thirds of its pre-fire output, said spokesman Brett Kerr.
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