Tight credit hampers Ike recovery efforts

GALVESTON, Texas, Dec. 2 (UPI) -- A sour economy is hampering recovery efforts in Galveston, Texas, two months after Hurricane Ike caused 17 deaths and damaged most of its houses, observers say.

With credit for construction loans tight and the area's largest employer, the University of Texas Medical Branch at Galveston, not slated for restoration, the tourism industry that once pumped $700 million per year into the economy has evaporated, USA Today reported Tuesday.

"Sure, Galveston will come back," Jim Gaines, a research economist at Texas A&M University, told the newspaper, but he added that "the recession and tightening in the credit market will limit what can be done, particularly on the entrepreneurial side."

Galveston, booming with construction before Ike and the bad economy hit, sustained heavy damage to the hospital and to its second-biggest employer, the Port of Galveston, which has about 3,000 workers, USA Today said. Officials say the port will need up to three years and hundreds of millions of dollars in repair work to restore it to operational levels seen before the hurricane hit.