Business Owners Tally the Storm Damage and Ponder Its Lessons

(By Suzanne Sataline, New York Times) Few small-business owners were prepared for the wrath of Hurricane Sandy. Wednesday’s snowy northeaster knocked out power to homes in New York and New Jersey and interrupted train service on Long Island, setting back the recovery effort in a region still reeling from Hurricane Sandy. The storm and its tidal surge ravaged stores and restaurants, soaked inventory and stalled manufacturing throughout the New York region last week.

Food and goods not ruined by seawater and the lack of power fell victim to sewer waste and mold. Even businesses on working power grids lost an important ingredient for success: employees. Many workers faced impossible commutes because of gas shortages and spotty public transportation.

As is often the case, many business owners in the storm’s path had not bought insurance beyond standard business protection — nothing for floodwaters or business interruption. Even a week later, after hauling out sodden goods and trying to reroute shipments and find insurance brokers, some were too overwhelmed to know if their businesses could survive.

“We made a pact that we weren’t going to think about it,” said Kristy Hadeka, co-owner of Brooklyn Slate Company, which sells slate cheese boards and kitchen items. “If you think about how the situation is, it’s so incredibly overwhelming, you don’t want to do anything.”

Ms. Hadeka, 29, and Sean Tice, 28, her boyfriend and business partner, were weeks from moving their business into a renovated storefront in the Red Hook section of Brooklyn, three blocks from New York Harbor. New plumbing and electrical work had been installed, costing them more than $10,000.

They planned to have offices and a small store there, too. It would be a big step for the two-and-half-year-old company, which started in the couple’s South Slope apartment and grew to $1.5 million in sales last year, including to big clients like Whole Foods.

All of that — and $5,000 in merchandise for a holiday market — was ruined by six feet of oily water. The company did not have flood insurance. Mr. Tice called the agent later to say, “Add it.”

The storm “wreaked havoc on the business,” Ms. Hadeka said. “We invested a lot of money in this space.”

They were just weeks from the start of the holiday season, when they expected to collect 75 percent of their revenue for the year. Mr. Tice said the company has business-interruption insurance, “but we haven’t stopped operating, so that hasn’t been an issue.”

With their 10 employees scattered — six in the city, the rest in upstate New York, where Ms. Hadeka’s family owns the quarry that produces the slate — the co-owners shouldered most of the work in the days after the storm.

Just getting to the new storefront proved taxing. With public transit suspended, Mr. Tice laced on his jogging shoes and ran the 11-mile round trip. Their New Jersey warehouse was still closed, and dozens of customers called and e-mailed, wondering when they would receive their orders.

With U.P.S. shipments halted, Ms. Hadeka said she had to work with the shipping company to issue new tracking numbers. A big shipment destined for Whole Foods in Massachusetts — 2,500 cheese boards — could not be found. After hours of calls, the couple discovered that the boards were on a truck parked in Elizabeth, N.J.

Ms. Hadeka wondered whether retail sales, and gift items in particular, would suffer. “People are devastated,” she said. “We rely so much on people buying cheese boards for Christmas and entertaining.”

But there is little time to dwell on such thoughts. Nor does the business plan to leave a waterfront neighborhood that is filled with young people running small craft businesses. “We have to keep going,” Ms. Hadeka said.

When faced with another hurricane warning, Mr. Tice said, “we’ll probably take everything valuable out of there and put it on a higher floor or a storage facility.”

In Sheepshead Bay, in southern Brooklyn, many mom-and-pop businesses were destroyed. A tidal surge flooded the bay and smashed into restaurants and stores at street level. Water gutted Istanbul Restaurant, a 17-year-old enterprise owned by Riza Atas.

The day after the storm, Istanbul’s interior looked like a scene from “Titanic.” Tables, chairs and settees were toppled. Plaster board and wallpaper hung from walls. No one could enter the kitchen; large industrial refrigerators and stoves had been thrown into the doorway.

Gawkers who entered the restaurant stood not on a floor once made of marble and granite tiles but on shards of wood and dishes. Mr. Atas lost a great deal of meat and fish. Worse, the storm destroyed the photographs, tiles and carpets from his native Turkey that he had lovingly displayed.

“We did not lose a restaurant,” Mr. Atas said. “We lose Turkish culture here.”

After the storm, the building’s owners sent 25 contractors and helpers to pump water from his basement and to clean, but the basement started filling again. Mr. Atas could not reach his insurance broker on Long Island, where thousands of customers had no power. His kitchen appliances, including the grill and the fryer, were filled with water. And he did not know how he would keep his 10 employees. “If we get something from the government, we have to help them, too,” he said.

Mr. Atas said he had not yet decided whether he would reopen. He estimated he would need $200,000 and three months to do so. “If the government or city helps, we can rebuild,” he said.

Considering what happened elsewhere in Brooklyn, Carl Manni, chief executive and co-founder of Linda the Bra Lady, said he got “kind of lucky.” Although the company headquarters and his home are in Dumbo, along the East River, neither place filled with water, and he did not lose power. But with subways halted, most of his 40 employees could not get to the office or to the company’s two Manhattan stores for several days.

Working solo for nearly three days, Mr. Manni said he was forced to let Web orders go unfilled. Several of his vendors’ warehouses were damaged badly, which meant the company could not replenish its stock and ship to customers.

In all, Mr. Manni figured the seven-year-old business lost $50,000 last week. “In a way, that’s the same thing as physical damage,” he said. “It’s really dollars at the end of the day.” He said the company had business-interruption coverage that began after 72 hours, so he expected to get some money, though he did not know how much.

In the meantime, with the business closed for nearly a week, cash flow has been a struggle. “We’re just not prepared for that,” he said. “We don’t run with a ton of cash in the bank. I’ve had to do incredible financial gymnastics to make sure we can pay rent and make our payroll.”

Frustrated by the transit shutdown, Mr. Manni also became creative with transportation. He dispatched the company’s delivery van, which is not made for passengers, to pick up employees throughout the city.

By the end of last week, operations were getting back to normal. “With the online business, people expect that you ship their packages and answer their e-mails,” he said. “We just can’t stop moving because of Sandy.”

Mr. Manni said he had prepared for the storm “as much as we could — and it helped.” Employees filled all of the vehicles with gas, and plumbers cleaned the storm drains.

“The rest is up to the utilities and government to make sure services don’t go offline for too long,” he said. “Hopefully, next time this happens, they will have new systems in place to get things back up and running more quickly.” That, he said, would minimize the economic damage.
Last modified onSaturday, 06 May 2017 10:07