Once-flooded Duluth bank branch revamped

• Republic Bank

David Gaddie, CEO and president of Republic Bank, says the gutting and reconstruction of the bank’s Woodland Avenue branch due to flood damage in June is nearing an end. (Bob King / rking@duluthnews.com)

Talk about it

Republic Bank officials found out the hard way that their Woodland Avenue branch was in a flood plain.

The 10-inch downpour on June 19-20 backed up sewers and overflowed the nearby creek. It turned the intersection of Woodland and St. Marie Street, where the branch is located, into a mini-lake.

The branch building’s basement flooded right up to the main floor. The furnace, air conditioning and electrical systems were ruined. The flooding damaged the underground drive-through tubes and buckled the concrete surface above it.

Although the exterior of the building at 1619 Woodland Ave. was undamaged, the inside was uninhabitable and condemned by the city, said David Gaddie, the bank’s president and CEO.

“It had to be all cleaned and sanitized and everything removed,” Gaddie said. “We took it down to the subfloor and started from there. We took the basement down to the concrete walls and floors.”

During construction, the branch’s customers have been referred to the downtown, Miller Hill and Hermantown locations. The branch’s staff — three full time and several part time — are temporarily working at other Republic Bank locations.

Because officials didn’t know the branch was in a flood plain, it had no flood insurance, so the damage isn’t covered.

“A whole lot of people are in worse shape than Republic Bank,” Gaddie said. “Now it’s an inconvenience, but we’ll be back in business and effectively will have a brand-new building, and that’s OK.”

While other Duluth businesses damaged by the June flooding are back up and running, the Woodland branch is still a construction zone nearly three months after the flooding.

Because it’s in a flood plain, the project has had to meet extra requirements and faced added challenges.

“You just can’t start rebuilding,” Gaddie explained. “With the main floor 2 feet below the flood plain, either you make it flood-proof or you can’t use it.”

The basement, where all the heating, cooling and electrical systems were located, had to be permanently sealed off from use. So the systems — which all needed to be replaced — had to be moved to the 2,316-square-foot first floor.

“That’s why we took everything down to the exterior walls, so we could change the floor plan for the main floor to make all these things work,” Gaddie said. “We’re doing everything with the same space.”

Costly recovery

He hasn’t added up the costs yet, but Gaddie estimates it will be about $300,000, with just some cleanup costs reimbursed by their insurer.

“We’ll get no money from the government,” he said. “I don’t think it’s going to be available to us, and we’re not seeking it. Everything is grants or loans. We don’t need to borrow money to fix our own building. That doesn’t make sense.”

Indeed, no disaster assistance is available for Duluth-area businesses from the Federal Emergency Management Agency.

Some loans, however, are available. The U.S. Small Business Administration offers low-interest disaster recovery loans to businesses for uninsured losses. And the recently passed state flood- relief package provides low-interest loans to businesses of any size that agree to stay in a community for five years, said Blake Chaffee of the Department of Employment and Economic Development.

“The funds only fund property damage or loss,” Chaffee said. “They are 10-year loans with the first year deferred and 50 percent forgivable if the business stays in the community 10 years.”

The only grants Drew Digby, also of DEED, is aware of are grants up to $5,000 offered by the Northland Foundation for businesses that suffered uninsured flood damage. The grants are strictly for flood damage to property and assets, not loss of business, he said.

“All the disaster aid is designed around the idea of helping people help themselves,” Digby said. “And the loans are built around helping people do that.”

October reopening

As for Duluth businesses affected by the floods, Gaddie said Republic’s Mount Royal-area branch is different.

“We probably have the single largest commercial loss of anybody because of the quirkiness of what happened,” he said.

He said the force of the floodwater knocked out a basement window, allowing water to pour in the building. And large trash containers at a nearby business were knocked into the nearby creek and swept through a tunnel under Woodland Avenue and got caught among trees and an access bridge on the other side, possibly contributing to the water backup that flooded the intersection.

“We would have had damage, anyway,” Gaddie said. “Would it have been as severe? I think not.”

Meanwhile, across the street, Domino’s Pizza had little to contend with in comparison.

“We got some water in the store, but not like the bank,” store manager Dave Gilbert said. “We closed that day. We just cleaned it up, then opened that night. We were lucky.”

Domino’s doesn’t have a basement.

“If we had a basement, it would have gone under,” Gilbert said.

Gaddie expects the work at the Woodland branch, led by Johnson-Wilson Constructors, to take another month. He hopes to reopen in mid-October.

The result, he said, will be a nice, updated facility with new walls, carpeting, lighting, furniture, teller stations and cash machines as well as new furnace, air-conditioning and electrical systems. While they were at it, they also installed a new roof because it had deteriorated.

“All that’s staying is the vault,” he said.

An ATM machine is back up and operating, using a temporary power system. And the bank’s flashing time and temperature sign that has been dark since the flood will be back in operation by the time the branch reopens, Gaddie promised.

Tags: business, woodland, construction, flood, money