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should own, not rent, those houses. When the regional economy revives, local people should be prepared for the jobs being created.” Bush later proposed the creation of a “Gulf Opportunity Zone” that would provide immediate incentives for job-creating investment, tax relief for small businesses, incentives to companies that create jobs, and loans and loan guarantees for small businesses, including minority-owned enterprises. “It is entrepreneurship that creates jobs and opportunity; it is entrepreneurship that helps break the cycle of poverty; and we will take the side of entrepreneurs as they lead the economic revival of the Gulf region,” Bush said in his speech.
Margaret Simms, vice president of governance and economic analysis with The Joint Center for Political and Economic Studies in Washington, D.C., and member of the BE Board of Economists, says the president’s speech was a marked departure from his usual approach of creating the right environment and letting businesses take care of themselves. The $200 billion question: Where will the money come from? “The speech that he gave certainly included a lot of components of what would be needed in a comprehensive rebuilding for the city of New Orleans and something that might be considered surprising, considering his past record, and difficult to achieve given the current budget situation.”
Contracting opportunities would grow black businesses and, in turn, increase the number of black employees and generate higher average incomes in a city that’s long been plagued by poverty and crime. It would also bring back some of the displaced black business community and possibly lead to more black construction companies. According to Spriggs, about 2% of the construction sales in Louisiana and Mississippi come from black-owned companies. Only one, HJ Russell & Sons, ranks on the BE 100S. “At least $2 billion should go to these black firms,” says Spriggs.
EMBATTLED B.E. 100s
America’s largest black businesses are by no means immune to Katrina’s ravages. And with experts expecting many of the displaced African Americans to permanently relocate in other areas (such as Texas and Georgia), this creates another business issue: black businesses — particularly smaller ones — are predominantly patronized by black people. Fewer blacks in a newly built New Orleans brings into question the future of black business there. Some experts are indicating that the city will undergo massive gentrification, pricing out the African American population that was the city’s backbone.
Sidney King, president and CEO of Mobile, Alabama-based Commonwealth National Bank (No. 25 on the BE BANKS list with $53.6 million in assets), says the bank could only open one of its three branches — the location with a generator purchased after 2004’s Hurricane Ivan. “The biggest concern, the biggest negative impact, was that our cash comes out of New Orleans through the Federal Reserve,” King says. “So our cash shipment was canceled and it was canceled at a critical time, being that it was right after a storm. It was before a holiday and it affected the third of the month, which is the busiest day at the bank, when the