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Will Businesses Be Protected If Superstorms Like Sandy Strike Again?

October 23, 2013
URL: http://www.entrepreneur.com/article/229571

Editor's Note: One year after Hurricane Sandy laid waste to countless businesses and homes across the eastern seaboard, we take a look back at those dramatic few days. Stay tuned tomorrow for more of our Sandy Anniversary coverage.

For businesses operating in the northeast last year, Hurricane Sandy unleashed a superstorm like none other before it. And while experts say it’s unlikely another tempest of its magnitude will strike again any time soon, many business owners have been left wondering what their local governments, and agencies under their purview, are doing to mitigate and even prevent future storm disruption.

Sandy’s sweeping path of destruction crippled businesses and forced counties in eight states, plus Puerto Rico, to declare disaster areas. All told, economic losses, including business damage, reached upwards of $50 billion. Many business owners have been left to clean up the mess on their own -- and some are still on the hook for ruined goods and equipment because they didn’t have, or couldn’t obtain, flood insurance protection.

“There was a shortfall,” says Tom Larsen, a senior vice president with EQECAT, which advises insurers about business risk from catastrophic events.

Some financial aid was made available in the wake of Sandy, which businesses should look for following future storms. The Small Business Administration, alone, received nearly 15,000 business disaster loan applications, more than 4,000 of which were approved with $478.1 million in assistance. The City of New York City provided around $25 million in loans and grants through certain programs to struggling businesses.

It also piloted a “small business storefront improvement” initiative to spruce up the hard-hit area of Beach 116th Street in the Rockaways, and the project has since expanded across the city with grants of up to $20,000 to cover rebuilding costs in commercial corridors.

Related: A Year After Sandy, Business Owners Living a New Normal

"Immediately after Hurricane Sandy, the city took action to help impacted small businesses through loan and grant programs, advertising campaigns, assistance with insurance, replacing and expediting permits and licenses, repairs, and more,” says Robert Walsh, commissioner of New York City’s Department of Small Business Services. "The city has also prepared an action plan and is working to implement a resiliency program in order to prepare for extreme weather and minimize damage in the future."

Meanwhile, across the Hudson River in New Jersey, Hoboken’s mayor Dawn Zimmer tells Entrepreneur that she’s pushing for legislation that will raise the height at which utilities may be positioned and increase "wet-proofing” protection efforts to help more street-level businesses safely operate.

Fortunately, some weather proofing had already been installed prior to Sandy. A wet weather flood pump that was newly installed two years ago, sucked out 50 million gallons of water each day for about a week after the storm subsided. The water-logged mess might have taken around a month to clear without the pump.

Her plan now includes adding three new pumps to the city’s waterfront, as well as a barrier system along parts of the Hudson River, to help businesses combat the effects of future superstorms. “I live in a flood zone -- my home was flooded and car was totaled,” says Zimmer. “I know firsthand we have to protect Hoboken in a comprehensive way, and I think of all the businesses that were impacted.”

As of October 13, a spokesman for NJ Transit says 99.6 percent of pre-Sandy scheduled rail service had been restored, and $26.6 million is being spent to raise electrical substations, improve storm-water drainage and install pumps, among other projects, to boost resiliency on the Hudson Bergen and Newark Light Rail systems. Back in the Big Apple, the Metropolitan Transportation Authority has launched the Sandy Recovery and Resiliency Division to work with architectural and engineering design firms and flood-proof major sections of the subway system, as well as bus depots and public waiting areas, which may help business owners and their employees with cross-borough commutes after future superstorms.

Related: 3 Ways Tech Entrepreneurs Can Help, and Grow, During a Natural Disaster

Many cities in different states have also contacted local businesses with tips on how to create a disaster preparedness plan. David Handmaker started implementing his own on October 29 last year when the CEO of Next Day Flyers shut down his printing services facility in Saddle Brook, N.J., due to Sandy -- and transferred all work to his plant in Los Angeles, which holds duplicate equipment. There, the other part of his team worked around the clock and kept up with nearly all project deadlines, while the Saddle Brook site lost $55,000 in revenue over the course of its three-and-a-half-day closure.

One hitch in Handmaker’s plan, though, was that some of his 32 employees from New Jersey were unable to get back into work once his plant reopened due to neighborhood shortages of gasoline. His solution: Organizing shuttle buses and ridesharing programs, a detail that he’s since incorporated into Next Day Flyers’ disaster recovery plan. “I’m very grateful that we have a plan in place,” says Handmaker. “It’s something that paid off for us and I recommend other businesses look at how they can best prepare for the unexpected disaster.”