Connie Strassburg, owner of Memphis Pig Out, in Atlantic Highlands, New Jersey, vividly remembers the gray day in late October, with the sky spitting water in her face. She and her husband watched with despair as water rushed into their southern barbecue restaurant, with a force that reminded her of Niagara Falls.
The flooding from Hurricane Sandy, the powerful superstorm that swept along the Northeast three years ago this week, yanked the pictures off the wall as it gushed into the dining room, and then drowned the basement HVAC systems, upending packed industrial-size refrigerators, and shorting out all of the restaurant's electrical wiring.
"My husband and I looked at each other with tears in our eyes," Strassburg says about watching the pieces of the enterprise they had built over 30 years drift away. "We were scared we would lose everything we had worked for. It was the worst moment of our professional lives."
Sandy, whose ferocity is described by weather experts as a once every 700 years event, left in its wake a path of destruction that wiped out entire towns, squashed power grids, flooded regional transportation, and hobbled tens of thousands of small businesses, the economic lifeblood of New Jersey and New York. Many businesses were closed for weeks, or months.
And many, like Memphis Pig Out, are still making a comeback, despite $60 billion in aid from the federal government and $2.4 billion worth of disaster recovery loans from the Small Business Administration. For the restaurants and manufacturers and construction companies caught up in the savagery of Hurricane Sandy, it has often meant redeploying resources for much-needed upgrades to existing infrastructure or replacing equipment that was lost to flooding. While insurance money came slow for many, it also covered only a small percentage of losses for most. So entrepreneurs did what they do best--they got creative to stay open.
Three years later, the businesses that managed to stay open have been changed for good. Here's a snapshot of how just five businesses are faring today.
1.Two Trees Management Company
The 100-employee, Brooklyn, New York-based family-owned developer, which is run and managed by Jed and David Walentas, experienced flood damage to 20 percent of its nearly 2 million square feet of office space, apartments, and condominiums in the Dumbo area of Brooklyn. Water flowed into basement areas that housed critical mechanical centers and power grids that keep the buildings functioning. It recouped $2.1 million in insurance money but has spent $2.3 million on repairs and upgrades to existing infrastructure, to make sure another storm of equivalent power won't wreak similar havoc on the enterprise.
Upgrades include moving elevator machine rooms, generators, and electric hubs to first floors, out of the path of most floodwater. One of the spaces Two Trees had purchased in the months before Sandy was the 11-acre site in Brooklyn housing the original Domino Sugar refinery, which it plans to develop into commercial and residential space at the cost of $1 billion.
In addition to repairs on the factory, it has rebuilt pier bulkheads destroyed by the storm, and will move new residential and commercial construction on the lot above the Federal Emergency Management's redrawn flood plane, which now calculates for 100-year storms. That means building foundations will range between 8 and 15 feet off the ground, which is between 20 percent and 30 percent higher than FEMA asks. It will also create water buffers like green spaces and parks that can absorb water. The tweaks cost Two Trees an additional $1 million, says Bonnie Campbell, a project manager involved with the new build-out. "Sandy encouraged us to be strategic about planning future developments, so that they were more resilient against future storms," she says.
2. Sandy Hook Pilots Association
This for-profit association of pilots has been guiding commercial ships in and out of New York and New Jersey Harbors for nearly 300 years. The association's 75 pilots, who are co-owners of the business, provide a critical service to the local and national economy by guiding all ships--including the Queen Mary and the thousands of cargo ships annually that dock in New Jersey chock full of consumer and industrial goods--through the local waterways. But Sandy decimated its headquarters, which were on a pier in Staten Island, severing its vital communication link to ships at sea for days after the storm, and costing the pilots an estimated $8 million in damages. It has been operating out of a temporary headquarters further inland on Staten Island ever since the storm.
Though the association recouped less than $1 million from flood and property insurance policies, the pilots are spending about $6 million on a new flood-proof headquarters, which will be financed through SBA loans and state economic development association loans. The pilots will build a 15,000 square foot structure on 180 15-foot stilts, with hurricane-proof windows, a water-impermeable foundation, and a triple-redundant communication link, among other things.
"We are a vital service, and without us, ships don't move," says Tom Ferrie, a pilot and co-owner of the association. "We have a responsibility to be ready, and we don't want to be a weak link."
3. Gillinder Glass
The industrial-glass manufacturer in Port Jervis, New York, got its start in 1861 in Philadelphia making trinkets, including 100,000 glass slippers it sold at the 1876 World's Fair in Philadelphia, where it was then based. Today, the factory, in its sixth generation of family ownership and with 80 employees, creates highly specialized glass, including lenses and domes that prevent color refraction, which airports around the world use to guide incoming pilots. When Sandy struck, it knocked out electricity for two days, which disabled four of the company's furnaces, which were keeping glass molten at 2,500 degrees Fahrenheit. About $50,000 worth of glass materials cooled and coagulated into an unusable mass that gummed up the works for days. The company's operations were halted for a week while the furnaces were cleaned and restored to proper functioning. The downtime, including lost employee hours and sales, approached $150,000, says Fred Harding, Gillinder's chief financial officer. It got an insurance payout for $50,000.
Over the past couple of years, Gillinder has spent tens of thousands of dollars to upgrade its backup generators so they can deliver enough energy to keep the furnaces running in the event of another blackout. The company will see 2016 sales increase 15 percent this year, from about $10 million in 2015, largely due to a new product line it developed to help reduce glare in cockpits. But that follows nearly two years of single digit growth, which was kept in check due to the fallout from Sandy and the need to invest in the upgrades. "We will always be somewhat susceptible to Mother Nature's fury and suffer some negative consequences, but the upgrades we have made will allow us to recover more quickly and reduce the financial impact," Harding says.
4. Seacoast Enterprises Associates
Peter Mendelman's father started this marina company in 1976 in East Hampton, New York. Today, Mendelman, who runs Seacoast with a brother and sister, owns four marinas on eastern Long Island, employing 25 people. He says they had plenty of advance warning about Sandy, and they hauled 200 boats out of the water, and tied down anything that could blow away. In the end, the damage came mostly from flooding, which wore away bulkheads, corroded electrical hookups, and decimated wooden walkways leading to the boats. (The marinas also had to contend with a 10 percent decrease in vacancy rates in the year following Sandy, as some tenants whose boats were damaged during the storm did not return.)
All told, Mendelman calculates the damages to his $4 million revenue business at about $300,000. Flood insurance covered just $55,000. Fortunately, Seacoast qualified for a $230,000 state disaster relief grant, but it had to wait until 2014 to get it. In the meantime, the company has had to spend more than $60,000 raising and rebuilding the bulkheads, installing reinforced pilings that can withstand big storm surges, raising electrical sockets up to waist level, and rebuilding its repairs warehouse with waterproof materials, like impermeable sheetrock and rigid foam insulation.
"This storm surge was much higher than any other storm I have seen in my lifetime," Mendelman says. "But we are buttoned up now, and we have good storm preparations in place."
5. Memphis Pig Out
Strassburg and her husband Mark had to take on second jobs--she in magazine advertising sales and he as a dog walker--to keep their barbecue restaurant in business. In the immediate aftermath of Sandy, Strassburg said she sold all of her jewelry to help pay for the $10,000 in electrical repairs. They needed an additional $55,000 to replace heating and cooling systems, freezers, compressors, and signage. They collected just $5,000 from a standard business insurance policy, and lacked flood insurance.
The SBA offered the Memphis Pig Out owners a disaster recovery loan of $60,000 in the spring of 2013, but Strassburg says she turned it down because it came too late. The New Jersey Economic Development Agency eventually came through with a $50,000 grant in October of 2013, which paid for back taxes and insurance. Strassburg says sales declined 30 percent in each of the two years following Sandy, and have only now returned to pre-Sandy levels, at about $500,000 annually.