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Hit by hurricane Ike and unexpected layoffs, Galveston ponders its recovery

Galveston's largest employer, a university hospital, will cut 3,800 jobs.

By Michael B. FarrellStaff writer of The Christian Science Monitor / December 3, 2008

Garage is home: Since hurricane Ike roared through, the Garcias have lived in their only habitable structure.

Michael Farrell/The Christian Science Monitor

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Galveston, Texas

This island city has a long history of rebounding from nature's most devastating blows. It withstood the hurricane of 1900, the country's deadliest ever, and is in the midst of picking up the pieces after hurricane Ike's furious assault in September.

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But Galvestonians didn't expect the next storm. Last month the city's largest employer, the University of Texas Medical Branch (UTMB), announced it was laying off 3,800 people and would downsize the teaching hospital that is a central part of Galveston's economy.

"We can get back from Ike because there's a will to do it. It's what I call the Galveston spirit," says the city's mayor, Lyda Ann Thomas. "But UTMB was like dropping a bomb on the community."

The convergence of natural and economic disasters is forcing the city to search for new answers, especially in the midst of a national recession. It will take a reinvention, say many in this city known for its pluck.

"We anticipate a year or two of struggles from Ike, but you lay on top of that the recession and the outlook looks bleak," says Galveston City Manager Steve LeBlanc. "Galveston will come back in a different form."

Exactly what form it takes is the big question reverberating all over town.

Ike hit the city's tourism industry, its active port, and the UTMB medical facility hard. The Strand historic district, a major attraction, remains in tatters and few businesses have reopened. The port needs millions of dollars to recover and the hospital's island campus was besieged with floodwaters, adding up to $710 million in damages.

University officials say the layoffs are necessary to save the medical campus, which has the state's largest indigent care facility.

Mr. LeBlanc says the storm losses have the city looking for other alternatives – such as casino gambling. It's a moneymaker that has helped other coastal communities, such as Biloxi, Miss., cope with chronic hurricane problems. But just the thought of it has caused a tsunami of criticism here.

"Once again, the quick-fix boys are trying to promote casino gambling as an answer to Galveston's economic problems," wrote Galveston businessman Harris "Shrub" Kempner Jr. in Sunday's Galveston County Daily News. "The promoters typically wait for a period when Galveston has economic difficulties and then attempt to promote gambling as a cure for all our ills."

It's been two months since the 425-mile-wide storm crossed over Galveston in the early morning hours of Sept. 13. The storm killed at least 37 people in Texas and caused an estimated $8.1 billion in insurance losses. In Galveston alone, about 75 percent of the housing stock was damaged.

The city is still spotted with piles of debris from one end to the other. About 60 percent of the island's 57,000 residents have returned, according to city officials. Many are now struggling with their own questions about whether to restore homes, tear them down and start from scratch, or leave the island altogether.

Cristina Garcia's small ranch-style home sits in a low-lying section of the city that was flooded with six to eight feet of water during the storm. Many of the houses in her working-class section remain abandoned and boarded up. Some are for sale.

Like others who have returned to Galveston, Ms. Garcia can't actually live in her house. It has been gutted and is awaiting either extensive repairs and renovations or the wrecking ball. So the eight-member Garcia family – four children and four adults – live in their small backyard garage that has been fixed up with drywall and tin foil over the windows and outfitted with a large-screen TV and enough mattresses tucked away for sleeping.

"For me, it's OK," says Garcia, sitting with her daughter-in-law, Jurico, and daughter, Christina, in the garage decorated with religious icons, like the crucifix hanging on the wall above their bed. In Mexico her house was about the same size, but with dirt floors instead of carpeting. Even though she and her husband can make do, the garage isn't OK for her children, she says.