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Weathering the Storm One Year Later

COASTAL SOUTH-If you asked Dion Grossnickle, general manager of Cross Gates Athletic Club in Slidell, LA, what 10 average people think of New Orleans one year after hurricane Katrina slammed into the Gulf Coast, he’d say that nine of them think things are back to normal. That’s just not so though. It will be years and years before New Orleans gets back to normal, he says.

Cross Gates’ Pontchartrain Drive location in one of the hardest hit areas is still closed after 6 to 7 inches of mud littered with snakes and debris washed in with the tidal surge that destroyed all of its equipment. Most other health clubs in this area are still closed. Even though it’s been a year, getting construction work completed is still challenging and some insurance claims are still being settled. In addition, finding members is difficult when few people have returned to the area.

Although many insurance claims have been settled, most insurance companies are denying all flood-related claims unless the business carried flood insurance, says Ken Reinig, president of Association Insurance Group. Loss of business coverage can also get tricky because club owners typically think that loss of income means loss of "gross" income.

"In actuality, loss of income or extra expense coverage will replace net profits and pay any ongoing necessary expenses such as leases, mortgages, bank loans, etc.," he says. "It will not pay utilities, ordinary payroll, contractor expenses, etc."

Clubs also lost key staff. Many new businesses have moved into the area to help with the rebuilding, luring management with better salaries, Grossnickle says.

Although much progress is still needed, the clubs that have reopened are doing well, considering the circumstances. Cross Gates membership has been gaining every month, and Grossnickle plans to open a small temporary facility across from his flooded Pontchartrain club in mid-September.

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