Coast Village Road businesses were some of the hardest hit by the impacts of both the Thomas Fire and the Montecito mud and debris flows. Losses to businesses on Coast Village Road were estimated at $15 million. (Urban Hikers / Noozhawk photo)

Businesses and community leaders say that it will take years to recover from the deadly Thomas Fire and debris flows that devastated Santa Barbara and Montecito.

Not since the 6.8 earthquake that hit Santa Barbara in 1925 has the community faced such a sudden, abrupt disruptive event

“Businesses have really been hurt, both first from the fire and the ash flow, and then also from the closure of the freeway and the debris flow,” said Paul Casey, Santa Barbara city administrator. “It has been a very challenging time for our business community at what is the most important time of the year.”

Among the hardest hit were hotels and the tourism industry.

“Our hospitality and tourism industry has endured a significant blow,” said Kathy Janega-Dykes, president and CEO of Visit Santa Barbara, at Tuesday’s City Council meeting.

During the month of December, Janega-Dykes said, many hotels were empty because of the poor air quality. Hotels saw a loss of about 26 percent in transient occupancy tax collection.

In January, the hotels offered discounted rates to evacuees. Some even offered free rooms to first responders, she said. Many Santa Barbara workers who live in Carpinteria and Ventura also stayed in hotels when Highway 101 was closed. 

Ken Oplinger, president and CEO of the Chamber of Commerce of the Santa Barbara Region, said his organization worked hard to help hotels find people who needed rooms, to soften their financial hit.

The chamber also helped businesses and outside government agencies understand the financial impact to the community. 

Many Santa Barbara businesses had to shut down due to heavy smoke caused by the Thomas Fire.

Many Santa Barbara businesses had to shut down due to heavy smoke caused by the Thomas Fire. (Giana Magnoli / Noozhawk photo)

“We essentially lost our entire holiday shopping season,” Oplinger said. “There was no access to the community for almost two weeks, which meant that, depending on the business, 20 percent of their workforce could not get to work for a two-week period. This was a major impact.”

Oplinger said the closure of Highway 101 had an impact far greater than many people realize.

“Almost every business in town has employees who come from the south,” Oplinger said. “Every single one of them had curtailment of work that they had to deal with.”

The chamber plans to put out a survey to its members to try to measure an overall financial impact to the community. 

Randy Rowse, owner of the Paradise Cafe and a member of the Santa Barbara City Council, told Noozhawk that the closure of Highway 101 caused about a 30-percent decline in business. He had already experienced a 50-percent decline from the smoke and fire in December.

Rowse said he cut back employee hours and “everyone took a hit.” He added that receiving supplies was “tricky” because most of the small business product comes up from Los Angeles.

The shutdown of Highway 101 through Montecito had a huge impact on area businesses, which lost customers and had a difficult time getting employees to work.

The shutdown of Highway 101 through Montecito had a huge impact on area businesses, which lost customers and had a difficult time getting employees to work. (California Highway Patrol photo)

Rowse said he was uplifted by the locals staying in hotels who wanted to help local businesses.

“There was an amazing amount of esprit d’ corps in terms of local people wanting to help local businesses recover from the fire,” Rowse said.

Still, the Thomas Fire and deadly related mudslides have disrupted nearly every industry on the South Coast.

Coast Village Road businesses were severely hit by the mudslides. The Montecito Inn is still not open, nor is the Four Seasons Biltmore Hotel.

The San Ysidro Ranch was badly damaged and is expected to remain shut down through July.

Other businesses are now open, but took a big hit during the weeks of closure. 

Robert Ludwick, president of the Coast Village Association, said there are about 127 businesses on Coast Village Road that employee 524 people, with an estimated annual payroll of about $14 million. 

The retailers on Coast Village Road lost 70 percent of their business in December, or about $9 million to $10 million, he said. The mudslides in January further affected sales about 70 percent, creating a loss of sales of about $5 million.

Mark Schneipp, founder of the California Economic Forecast Project, told Noozhawk that the devastation is huge, but that there will be some positives that come out of the tragedy, both in the short and long term.

He said State Street in January was more vibrant that during the same period the previous year because there were so many local people staying in hotels and shopping at restaurants. 

Amtrak and Island Packers, he said, are businesses that experienced an unexpected boom.

Schneipp also said that money is going to come into the area to start with the rebuilding process.

FEMA offers up to $250,000 for business owners, and homeowners will eventually get their costs covered by insurance if they have fire coverage. There were 119 homes destroyed and another 263 damaged.

“This was a terrible tragedy but the longevity of it is not something that is going to have long-lasting effects,” Schneipp said. “If anything, the effects are going to be positive, over the long-term.”

Communities hit by tragedy often see a swift financial rebound that revitalizes the area, as is the case in Houston, Schneipp said.

“You are going to see tons of new money coming here,” Schneipp said.

Before long, he said “we are going to have a shortage of construction workers. Montecito will be vibrant.”

He also said that the number of people staying at the hotels during the off-season means that more people are eating and shopping downtown and in the Funk Zone.

Still, Schneipp acknowledges that after nearly two months of disruption from Thomas Fire and the flooding and mudslides, “I wouldn’t be surprised if you don’t see some casualties.”

Hopefully, he said, those businesses will have business-interruption insurance coverage.

Insurance companies that don’t cover losses, he said, “will get the worst PR.”

“The area is gonna be just fine,” Schneipp said.

Oplinger disagreed a bit with Schneipp. He said people were “out eating and shopping, but so far in no greater numbers then this time last year.

He also said some businesses will get financial assistance, but again not the level they would have received if the business would have not had the impact, especially those without physical damage.”

The city of Santa Barbara itself spent about $2 million in emergency response costs over the Thomas Fire, and another $7 million on the debris flow and mudslides that hit the southern end of Coast Village Road.​ The city also estimates the combined loss of sales and hotel bed taxes of about $1.5 million.

“It’s unprecedented on the South Coast,” Casey said. 

Dave Lombardi, the interim director of Downtown Santa Barbara, said he was pleased with how well the business community and government came together to support each other. They worked together to promote each other and encourage people to start shopping again.

Lombardi said his group helped set up pop-up shops for Coast Village Road businesses to open temporarily in downtown Santa Barbara. 

“We are all stronger together than we are individually,” Lombardi said at a recent City Council meeting. “We are all working very closely together. In this whole time, I don’t want to keep saying tragedy or disaster, but it has really brought this community together, not only the people, the citizens, but us as organizations and the city.”

Noozhawk staff writer Joshua Molina can be reached at Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.