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Six Months After Hurricane Sandy, Many Businesses Are Still Struggling to Recover

April 29, 2013
URL: http://www.entrepreneur.com/article/226520

When Hurricane Sandy struck the East Coast last October, Erin Visalli was one of many small-business owners whose life was suddenly turned upside down.

Visalli's Ocean City, N.J.-based store, which rents amenities such as linens and baby strollers to Jersey Shore vacationers, suffered about $20,000 in damage and lost inventory. She was forced to evacuate her Manasquan, N.J. home with her husband and their one-month-old son. For the next two months, they lived with her parents and in-laws while trying to get her business back on track.

"It was a very difficult to be a new parent and deal with living somewhere else and not having the store in the same way that we left it at the end of the season," says Visalli.

Now, six months after Sandy hit, there are still some empty stores along the Jersey Shore, Visalli says. While she never stopped taking orders, she says it was only a few weeks ago that her business was fully back to normal. Having self-funded the recovery rather than taking a loan from the Small Business Administration, she is happy to report that orders for the first quarter of 2013 increased compared to the first quarter of last year. "We're ready for our vacationers," she says.

As of yesterday, $2.1 billion in Sandy-related federal disaster loans had been approved for New York, New Jersey, Connecticut and Rhode Island, according to the Small Business Administration. Of this total, $181 million went to New York businesses. Below we provide a snapshot of three of the hardest hit New York regions and how these business communities are recovering six months later.

Related: 6 Lessons from Small Businesses Damaged by Superstorm Sandy

Red Hook, Brooklyn
Two days after Sandy hit, Carlo Scissura, president and chief executive of the Brooklyn Chamber of Commerce, walked through the riverside neighborhood of Red Hook and spoke to local business owners. "I got to tell you, a lot of people were really frightened," he says of that day. "But now there's a lot of hope. People are going back to Red Hook and spending money there."

After near devastation, the local Fairway grocery store is open again, and many of the small mom-and-pop restaurants, bars and antique shops are back up and running, Scissura says. Many neighborhood fixtures such as The Red Hook Winery, which reportedly lost most of its 2011 and 2012 vintages after seawater seeped into the wine barrels, have also recovered.

The recovery efforts have been largely funded by SBA lending as well as local organizations and community donations. With assistance from the New York City Business Solutions Center, the Brooklyn Chamber of Commerce was able to provide $25,000 loans and $10,000 no-strings-attached grants per business. Additionally, the Brooklyn Community Foundation formed a recovery fund that raised over $2 million for disaster relief, mostly from small grassroots donations, says Scissura. This money was distributed to people and businesses in need in Red Hook, Coney Island, Sheepshead Bay and other heavily damaged areas.

Now that most Red Hook businesses are back on their feet, Scissura says, "the challenge is going to be making sure that the businesses that have reopened have customers."

The Rockaways, Queens
Prior to Sandy, about 1,100 businesses were operating throughout the Rockaways and Broad Channel areas, says Kevin Alexander, executive director of the Rockaway Development and Revitalization Corporation (RDRC), an organization that seeks to stimulate the local economy through services such as employment readiness training and small-business advice. "Sandy hits, there are no businesses operating [anywhere]," he says. He estimates that only 700 to 750 are currently open.

With so many businesses closed and the Rockaway beach boardwalk still in pieces, Alexander anticipates a slow summer season. "There's still a significant loss right now," he says. "And even those businesses that are open [again] are still concerned that they might not stay open."

However, Alexander did single out local, family-owned Brown's Hardware as a bright spot. Although flood-damaged and without power, the Rockaway Park hardware store reopened within five days of Sandy, so that people could buy tools and supplies to rebuild their homes and businesses. The store owners also allowed the RDRC to run small-business workshops in the store to advise local entrepreneurs on how to obtain disaster relief funds. "You know, it's just that resolve that we're going to come back better and stronger," Alexander says of local business owners. 

Related: How One Franchise Owner Got His Businesses Running After Hurricane Sandy

Staten Island
Sandy may have taken the biggest toll on Staten Island. About 1,200 businesses here were damaged, and some severely so. Of the 43 people who died in New York City during the storm, 23 of them were in Staten Island, and the borough has yet to fully recover.

"I don't think we're anywhere close to being back to where we were," says Linda Baran, president and CEO of the Staten Island Chamber of Commerce.

But some local business owners are showing tremendous grit in their efforts to rebuild. One example is John Toto, whose restaurant, Toto's, was knocked entirely off its foundation. "He's been working like a dog to get himself back up and running" by Memorial Day, Baran says.

Baran describes a storm surge on October 29 reaching a mile inland and flooding small businesses with seven or eight feet of water. "Some of our main commercial corridors weren't affected, but a lot of the small neighborhood stores -- delicatessens, pharmacies -- were severely impacted," she says.

As in Red Hook, the Business Solutions Center has provided $25,000 loans and $10,000 grants to small businesses in Staten Island. And gas supplier National Grid has partnered with the local Chamber of Commerce to award grants to needy businesses. A recent one, to Midland Pharmacy, was in the amount of $50,000.

But it hasn't been easy for business owners to get access to larger amounts of money. "You've got a lot of people in the waiting game. I think it's going to be a long, hard road," Baran says.

Nevertheless, she's already able to see the potential for future growth. Devastated shoreline areas can be made more robust in preparation for the next storm. "They're ripe for development, for restaurants, shops, tourists," she says.

Related: Business Interruption Insurance: What It Will -- and Won't -- Cover