The Miller Village Shopping Center wasn’t the kind of commercial hub that beckoned you from the street. A modest strip mall built in the early 1990s, it housed a bar, a nail salon, a Chinese restaurant, a GNC and a small dance studio. A Storage Center anchored one side of it, a Rite Aid the other.
If you don’t live in the neighborhood and you happened to pass it while approaching the intersection of Old Hammond Highway and Millerville Road, you probably wouldn’t have looked twice, unless you needed something at Rite Aid. It lacked the charm of the Antiques District in Denham Springs or the retro chic appeal of Government Street in Mid City.
But the small businesses that were located in Miller Village meant the world to people who call that part of Baton Rouge home. Until Target and Chili’s opened down the street in the late 2000s, little else was around.
For more than 20 years, Hong Kong restaurant was the go-to place for Chinese food, and its bustling take-out business saved many working parents the trouble of cooking dinner on a busy weeknight. Exotica Nails was a popular salon, with cheap quality pedicures and killer foot massages. Big Heads was the neighborhood watering hole, where a clientele of mostly middle-aged guys hung out, drank beer and watched sports on big screen TVs.
Then there was Dance by Trudie, something of an institution in that part of town. Its proprietress, “Miss” Trudie Osterberger, began teaching little Baton Rouge girls to dance in 1967. She’d owned her own studio in Miller Village since 1992. In just a few months, she would have celebrated her 50th anniversary of teaching dance.
“I thought we’d make it to 50 years and then I’d step down and retire,” Osterberger says. “We didn’t make it.”
When the waters began rising in the Capital Region during last month’s historic flood, Dance by Trudie was inundated with more than three feet of water. So were the other tenants at Miller Village. Their businesses were ruined, and none of them will be coming back—at least not at Miller Village. A few days after the disaster, the shopping center’s owner terminated their leases and began moving forward with plans to redevelop the property.
What will they do now? Where will they go?
“We don’t know what we will do,” says Vy Nguyen, who ran Exotica Nails, supporting her mother and four siblings with the revenues it generated. “How can we reopen somewhere else? We lost the business, we lost the house and we lost the cars, so there’s no money now.”
The story of Miller Village is one that’s playing out all over the greater Baton Rouge area, where an estimated 12,000 businesses—roughly 35% of all businesses in the Capital Region—were located in areas affected by flooding. The majority of them are small businesses, and many have been completely wiped out. Fewer than 20% had flood insurance and, like the Miller Village tenants, some are now finding out that on top of losing their livelihoods they’ll have to rebuild somewhere else, if they’re able to rebuild at all.
The situation is one of many keeping property and business owners up at night. They’re calling their lawyers with questions about the legal, technical and financial issues related to the redevelopment of flooded commercial properties.
But important questions are also being raised about what these losses mean for the future of neighborhoods in the Capital Region. What happens when entire developments of small businesses disappear? What is the cost to the community when its mom-and-pop shops go under?
The answer can’t be calculated on a spreadsheet because when a neighborhood loses its locally owned establishments it loses more than a convenient place to get a pedicure or a beer. It loses its sense of community, and the connective tissue that holds people together and binds them to the place they call home.
SAVE THE LAST DANCE
Osterberger never thought her studio would flood. She rode out Hurricane Katrina there, as well as Gustav and Isaac. Not once in 24 years had the parking lot even taken on water.
“It wasn’t until someone sent me a picture of Millerville late that Sunday night (Aug. 14) did I realize we were under water,” she says. “It was so high, we couldn’t even get here until (the following) Tuesday.”
Osterberger is a petite woman with a sprightly demeanor. She talks fast and exudes energy. She wears her 65 years well, and counts among her former students three generations of Baton Rouge women.
She wasn’t much older than some of her students when she landed her first gig teaching dance at a BREC park. Osterberger was only in high school at the time, and for the next 26 years she would teach dance in the BREC system, earning a degree in education from LSU, marrying and raising a family along the way.
In 1992, she decided to open her own studio and rented the space in Miller Village. In its heyday, Dance by Trudie enrolled more than 400 students a year, and every spring it put on a lavish recital at the River Center, one of those three-hour productions with sparkles and lipstick and proud parents snapping endless pictures of 4-year-olds in tap shoes.
“Oh, everybody wanted to come to see their baby up on stage,” Osterberger recalls.
The little ones called her “Tutu” and made her pictures, which she proudly hung on her studio walls. They were among the mementos she lost in the flood.
“It was the things the children had given me over the years that meant the most to me,” Osterberger says. “It was difficult to put those memories into the trash can. But there’s no salvaging very much when there’s a flood.”
THE TAKE OUT
The unprecedented rains that brought on the historic flood of 2016 began late Thursday, Aug. 11. Parts of the metro area began flooding the following morning. At Miller Village, the trouble started that Sunday, and by Monday the floodwaters remained more than three feet high.
By midweek the waters had receded. That’s when the manager at Brookwood-Millerville LLC, which owns the shopping center, began notifying tenants their leases would not be renewed. They were told they had 48 hours to get everything out.
The calls came as a shock, though perhaps they shouldn’t have: None of the tenants had a current lease with Brookwood-Millerville except Big Heads, and it was set to expire at the end of this month. All the others had been operating under a month-to-month arrangement—in some cases, for years.
Nguyen says she begged for more time. She was tied up at the Federal Emergency Management Agency office registering for disaster assistance when she got the phone call. Her family’s home on O’Neal Lane had taken in nearly seven feet of water, and all three of their cars were destroyed. Given what she was already facing, she couldn’t believe what the property manager told her.
“She told me the landlord was redeveloping the building so we could not have our space anymore,” Nguyen recalls. “She told me, ‘If you need to save anything come and get it because we have people coming in, so you need to get everything out.’”
Nguyen panicked. So did Sandy and Sau Yeung, who couldn’t understand what was going on. Their restaurant, Hong Kong, had been located in Miller Village for more than 20 years. They’d never been late on their rent. The small operation supported their family, and everything they had was invested in it.
Sau Yeung told the property manger it would take time for him to clear out his space and figure out what to do with the restaurant equipment he hoped to salvage. Unlike the dance studio or the nail salon, he had a heavy commercial oven and refrigerator, and he needed a work crew to help him move them out. But before he could find one, he says, a remediation company hired by Brookwood-Millerville gutted his space and hauled his equipment to the debris heap.
“They just took everything out,” says Sau Yeung, who emigrated to Baton Rouge with his wife from Hong Kong in 1994 and opened the restaurant two years later. “This is my whole life. Everything was paid for. They just trashed it. Threw it out.”
Brookwood-Millerville is owned by Craig Smith, an attorney who declines to comment on the situation at the shopping center. But his attorney, Jeff Barbin, says Smith, too, is a victim of the flood.
Smith owns The Storage Center that anchors Miller Village, as well as two other Storage Center facilities in the area. All three flooded, and Barbin says Smith sustained losses of at least $2 million as a result.
Barbin says Brookwood was fair with the tenants. As for the Yeungs, he says Brookwood-Millerville initially agreed to give them more time to clear out their space, and then secured their permission to remove the equipment.
“The landlord spoke to the tenant on multiple occasions after the flood and asked the tenant to remove all of his equipment so that environmental remediation could begin,” Barbin says. “The tenant removed some of his equipment and told the landlord’s environmental remediation contractor that the rest could be disposed.”
The Yeungs dispute that they gave the remediation company permission to dispose of their equipment. As for the other tenants, Barbin says they were given ample notice, and that the landlord was within his rights to terminate their leases and begin remediating the property.
“Each of the tenants was told that from a practical perspective it was necessary to remove any property which remained as soon as possible to prevent further damage to the center” from the spread of mold, Barbin says. “Each of the tenants was given opportunity to remove possessions that still had some value. Some of the property that was built into the premises became the property of the landlord. However, the landlord still allowed them to take what they wanted.”
The Miller Village tenants don’t exactly see it that way.
“In the end he didn’t have to do it this way,” says Stuart Dickey, manager of Big Heads. “He was going to win. Our lease was expired. The others leases already had expired. But there was no need to do it this way.”
RISING LEGAL QUESTIONS
There are two sides to every story. What’s indisputable about this one is that without a lease in place, the tenants at Miller Village have no leverage or legal recourse. And even with a lease in place, it’s not entirely clear the Yeungs or anyone else in the shopping center would have been protected.
Some, incidentally, say they had tried to secure new, long-term leases when their old ones expired but were put off by the Brookwood-Millerville property manager or told not to worry about it. Some say they didn’t worry about it. Others did. For his part, Barbin says, “most of the tenants were happy with a month-to-month lease and the low rents they were paying.”
Whatever the individual circumstances, the situation at Miller Village reflects the kind of nuanced legal questions that have arisen as the floodwaters have receded. Property attorney Charles Landry keeps a copy of the Louisiana Civil Code sitting on his desk these days, so peppered is he with questions about property rights and related disputes in the wake of flood.
“I’m getting hammered on these law school questions I never thought I’d have to deal with,” he says.
On the subject of commercial leases, for instance, Landry says they all have different provisions, depending on who drafted them and the terms agreed upon. Some clearly favor the landlord over the tenant. Some even have a clause allowing a landlord to terminate a lease if the cost of repairing a damaged property is more than 50% of the pre-flood value of the property.
If that’s the case, then “the landlord can say, ‘You’re out, you’re done,’ and not rebuild the building,” Landry says. “So even with a lease, a tenant is not entirely protected.”
Landry and others say this is just one of the many unfortunate realities business and property owners are waking up to as they turn their attention away from their gutted homes and back to their flooded businesses.
“Some of these folks who have been in business 20, 30, 50 years have worked on a handshake agreement with their landlords,” says Dawn Starns, president of the Louisiana chapter of the National Federation of Independent Businesses. “They’ve counted on their lawyers or CPAs to keep up and they haven’t understood it all, so there are a lot of challenges they are facing, especially if they have been in the same location for many years.”
The Small Business Administration has set up disaster assistance centers throughout the area to help, offering advice and low-interest loans to home and business owners who need to rebuild. But the response from small businesses has been anemic so far. As of Sept. 8, just $5.4 million—or 7%—of the $214.7 million in loans approved by the SBA went to businesses.
Part of the problem may be that small business owners don’t want to take on debt. Yeung, for instance, never borrowed to operate his restaurant. His equipment was paid for, a fact of which he was exceedingly proud. He didn’t owe anyone any money.
Part of the problem is also the ambiguity surrounding the amount of money the SBA is willing to loan business that needs to relocate. The SBA disaster loan program will let businesses borrow up to $2 million, but it’s vague about whether or not that much is available for business owners who need to move. What happens if they can’t find a new space at a comparable price? How do they make the numbers work?
A spokesman for the SBA says the agency makes determinations on a case-by-case basis, and factors into its assessment whether the relocation is voluntary or involuntary. He encourages anyone with questions to meet with an SBA representative at one of the disaster assistance centers the agency has set up in the area.
Starns is giving her members the same advice, though she cannot promise any results.
“These businesses really need to go and sit down with someone and say, ‘Here is my business, this is what I do, what are my options?’” she says. “That’s what we’re telling people to do at this point.”
FRAYING THE COMMUNITY FABRIC
But there are larger issues than the details of property rights under the Civil Code or the technicalities of the SBA disaster loan program that the Miller Village story raises. Those issues have to do with the loss a neighborhood sustains when its locally owned businesses are washed away overnight.
Nearly 7,900 businesses in southeast Louisiana shut down in the 18 months following Katrina in 2005. Most of them never returned.
Granted, much of New Orleans in the years since has enjoyed an influx of new commerce and entrepreneurial enterprises, particularly in the neighborhoods that the legions of hip, young investors decided were worth bringing back.
But other neighborhoods never recovered, as much because of the loss of residents as the loss of locally owned businesses.
“When small businesses go under, the fabric of the community is what is lost because the services they provide are not just about the money but about support,” says Elizabeth “Boo” Thomas, executive director of the Center for Planning Excellence. “When they go, that sense of belonging, that sense of community is gone.”
Starns says NFIB is worried about the future of the area’s small businesses, particularly in communities like Denham Springs, where an overwhelming majority of business owners were impacted by the flood. Many of them lost their homes and commercial establishments.
“They’re the job creators and the taxpayers,” Starns says. “They are the true fabric of the community.”
At Miller Village, that fabric is unwoven. Big Heads’ three owners say they’re interested in reopening somewhere else, but with three flooded houses among them they really can’t think about it at the moment.
Hong Kong and Exotica Nails have no idea what to do—or even where to begin.
Dance by Trudie is gone for good. Osterberger says she’s too old to start over. It makes her sad, but at least in her case it’s not really a financial hardship. She just wishes she could say the same for those who had been her neighbors in the shopping center for so many years.
“I’ll be OK,” she says. “Some of these other people—Hong Kong, the nail salon—they won’t be.”