Without flood insurance, the Erwin plant will have a hard time reopening after Helen

Walking inside the nearly destroyed Foam Products Corporation factory in Erwin requires boots – the higher the better. Not because what’s left of the building is dirty, although it is, but because if you step outside the cleared path, you can sink into 4 feet of sand and dirt.

Water is nearby River NolichutskyiOn September 27, blown up by the remnants of Hurricane Helen, the plant roared past. Water rose 7 feet inside the plant, breaching walls, bending vital support beams and pulling metal cable barriers from Interstate 26 onto the site as before. dental floss. Everything in the path of the water was destroyed.

All this can be a heavy blow. The company, like others in Erwin’s Riverview Industrial Parkthere was no flood insurance.

Flood insurance wasn’t what they needed

Perry Muse is vice president of manufacturing and general manager of Foam Products, a women’s underwear and floor mat manufacturer. On October 18, he gave Knox News a tour of the destroyed factory.

The industrial park is located in a Federal Emergency Management Agency-designated 0.2% inundation zone, which FEMA considers a 500-year flood zone. Still, even with such a low percentage, FEMA considers the area to be at “moderate” risk of flooding.

But flood insurance wasn’t a top priority given the numbers.

Nolichucky is a little more than South Industrial Drive and I-26, but it lies in a ravine. From where the Foam Products parking lot used to be, all you can see of the river are the treetops that bordered it.

But on September 27, the water level rose higher than at any time in history, surpassing the river record of 24 feet.

Tara Horton is vice president of compliance for Wright Flood, a national flood insurance company. Homes and businesses located in low- and medium-risk areas often find themselves in this position when considering insurance coverage, she said.

“What’s probably happened to these poor consumers is that they’re in an area that doesn’t have enough information about flood insurance. … They’re in one of those places where there’s less risk and less awareness, and they just don’t buy flood insurance,” she said.

A FEMA official just made a point that many didn’t expect: Floods don’t follow lines on a map.

“Where there can be rain, there can be flooding,” the agency said in an emailed statement. “Whether a property is in or out of a high risk flood zone, FEMA encourages property owners to consider purchasing flood insurance for protection and peace of mind.”

The help available may not be enough

Unlike individuals who lost everything or certain nonprofits, the companies must repay the federal funding through the U.S. Small Business Administration loans that Foam Products applied for. Muse is unsure of the way forward. All options are bad.

The best estimate of what cleanup and demolition could cost is more than $20 million, and that doesn’t include replacing equipment and machinery. Two things further complicate the problem.

First, the company recently invested $15 million in a new plant in Calhoun, Georgia. According to him, the new factory has not yet been opened, and Foam Products is cash-strapped.

Second, the company makes custom underwear for a customer, which brings in $4 million a year. Since the flooded factory cannot produce it, the account will dry up.

“It’s devastating. I mean, how do you recover from that? I don’t know,” he said.

His company’s options, as they currently stand:

Get a big loan.

Challenges: The size of a possible SBA loan is unknown, and they don’t know if it will be enough to try to rebuild. The company’s existing loan for a new facility and the loss of a large client complicate the problem of obtaining additional debt.

They pull out what they can and bulldoze the building to sell the land.

Challenges: It is unlikely that the company will recoup the money from the sale of assets alone to cover expenses. Also, who knows if they’ll find a buyer after the massive flood?

Demolish the building, rebuild and sell the new building.

Problems: The same problems will occur, although the company may make a little more in sales. It probably still won’t cover the cost of the work to get to that point.

“The most important question is not whether we start work or not. It’s probably not,” said Musa. “The question is, what do we do with the building and the lot? What makes the most economic sense?”

Damaged Helene facility faces multi-million dollar repairs

The Foam Products Corporation facilities in Erwin were damaged after the Helen floods.

Old Hickory Buildings, which sits at the end of South Industrial Drive and also lacks flood insurance, appears to be more profitable moving forward, according to Jeff Bratcher, senior vice president of external operations.

“We don’t really want to make loans,” Bratcher told Knox News in an email. “We have already transported large earthmoving equipment and are currently working on site. Just going to do our best to clean up the site. Then assess the building and foundation. I hope that next year we will be able to start reconstruction.”

The industrial park employed more than 250 people, nearly all of whom lost their jobs, according to Austin Finch, director of economic development for Unicoi County. On Oct. 15, Finch wrote a letter to Tennessee Economic and Community Development Commissioner Stuart McWhorter asking for state aid to these businesses.

“The loss of these industries is a tremendous blow to our workforce, our families and our local economy,” Finch wrote. “In an already economically vulnerable region, the ripple effects of this disaster are far-reaching, from the immediate loss of jobs to the long-term impact on our tax base and public services. Simply put, without special assistance, Unicoi County faces an uncertain future.”

The state’s response has been encouraging, Finch told Knox News, but he doesn’t yet have details on what that might look like.

However, Muse can put things into perspective. Because he called to close the plant for part of the day on Thursday and not to work on Friday when the flood rose, none of his workers were injured. He said it was the first time in the plant’s 15 years of operation that it had closed due to weather.

“I couldn’t live with myself doing that,” he said. “That would be everything for me. I am very worried about our employees.”

Tyler Whetstone is an investigative journalist who practices accountable journalism. Contact Tyler by emailing him at [email protected]. Follow him on X, formerly known as Twitter, @tyler_whetstone.