One Year Later: The Food Industry Takes Stock After Sandy
On October 29th, 2012, the East Coast was struck by the worst hurricane in recent memory, a "once in a hundred year storm" that hit in all the worst ways. As we approach the one year anniversary of Hurricane Sandy, we've taken a moment to look back on the that day and the weeks and months that followed, through the eyes of the businesses who shared their stories with us.
For food businesses that run on thin margins, the effects of the storm were devastating. Even those who only suffered from power outages but no physical damage went through a lengthy recovery. In the weeks following the storm, sales were down, and in the case of one restaurant—Northern Spy Food Co.—a week of lost sales, $35,000, took six months to recuperate.
Those who sustained massive damage faced the challenges above as well as the seemingly insurmountable obstacles of rebuilding destroyed restaurants, kitchens, and stores. Institutional support from government agencies and insurance companies wore thin, but communities rallied resilient support around their local restaurants. Some businesses, like Brighton Beach's M&I, didn't make it. Others like the Bruckner Bar & Grill and the beloved Georgian Bread have changed management. Many like Brooklyn Cured and The Jam Stand escaped relatively unscathed.
Over the past year we spoke with dozens of food businesses about their struggles after the storm. On the cusp of Sandy's anniversary we checked in to see how they're doing today.
There are countless more stories to be told, and for every business like Northern Spy, which suffered no physical damage but received much media attention, there were five more like Neptune Avenue's New York Bread—immigrant-led businesses whose struggles gained little notice or exposure.
A disaster like Sandy reveals the fragility of New York's food and restaurant ecosystem. But it also shows the awe-inspiring strength of people in the industry, and the passion that drove them to keep going. It shows why they took on debt, waded through cold water in hazmat suits to scrub down toxic walls, and fought for months while empty promises of help fell through. In so many ways we're still living through the hurricane, which hides in plain sight before our eyes, and it will linger for some time to come.
As we collected more and more stories, we noticed some common themes emerge. Below, in what will be the first of a two-part story, are industry workers' frustrated experiences with broken government promises, insurance and contractor difficulties, and the lasting impact of the storm.
Court Street Grocers
After telling us in January that their Red Hook shop and commissary kitchen would be serving sandwiches by March, continuous delays prevented Court Street Grocers from opening their second location until June. "Things just kept piling up," co-owner Eric Finkelstein told us, as they struggled to get the help they needed from the Small Business Administration.
While their Court Street location was unaffected, they had to deal with shortages from suppliers who couldn't reach them because of their own flooding and a gas shortage. They remained incredibly busy there, paying for the rent, rebuilding, and insurance of their Red Hook space through those sales. But co-owner Matt Ross says it will take another six months for the business to stabilize, and Eric added that they've just started to take home money last month. The silver lining is that they were invited to participate in a new market in Hells Kitchen in the future.
We had our loan withdrawn three times. The loan was put in, you'd keep sending the same stuff in over and over, and they keep asking for it again. Then the loan gets reassigned. We had five loan officers, and every time they found a different problem. On the report from the SBA [Small Business Administration] adjuster, he saw all the damage, and the only thing that we were able to get refunded was the walk-in refrigerator. The loan was less than the rent between the hurricane and when we opened.
It was thoroughly insubstantial. My thought is that they try to keep the rejection rate as low as possible by trying to get people to bow out of the process. There's not enough willpower to keep pushing through. You have crazy amounts of documentation, over and over again, different wordings, you have to rewrite the whole thing, and you have to fill out a form 10 times. They'd go so far as to have the loan officers change their extension numbers. We would talk to somebody one day, get an email, write back, hear nothing, call them back, and the extension goes to different person or is completely disconnected.
We were paying our bills the whole time out of this business, and if we hadn't done that and stopped paying everything we would've been able to get money down there. It bled this business dry. We used everything that we had to pay for that from this business.
Going into this summer, the future of Mile End's commissary kitchen was uncertain. The company's plans hinged on that space, a converted shoe factory into which they had invested hundreds of thousands of dollars to expand their operations. When the storm hit, all of that was scrapped, and getting back to the beginning took eight weeks and cost $125,000. Co-owner Noah Bernamoff hopes to launch direct orders in time for the holidays. But getting back into shape after so long meant that the team took on a new partner, butcher shop Fleisher's, a decision Noah made in March when he realized that government aid wouldn't arrive.
We got part of the way through the process. We had the site inspected, we submitted initial documents. One of the problems with the position we were in is that they asked us to submit documents, including two to three years of tax returns, that we didn't have. We were a brand new company. As far as Red Hook is concerned, we're a different corporate entity than the restaurants. For the company that owned the lease I didn't even have a tax return to show for it. I had a year filed, but it was a no-activity year because we just formed the company and were in the midst of doing construction. So I didn't have the basic paperwork available to satisfy the requirements of the SBA.
The more you go back and forth with documents and requirements, it just wears the shit out of you. It's like, "Oh, sorry I couldn't get to sending you the document, I was scrubbing the walls with degreaser for the last 12 hours in the dark, in the freezing cold." It was a more challenging process to get a loan from the SBA than it was to get one from a bank. The SBA was set up to give a shit about three- to five-year-old businesses that show positive cash flow. There is no program designed to help us."
New York Bread
Six feet of water flooded Neptune Avenue's New York Bread, the Brighton Beach temple to rye bread whose storefront only reopened last week. Fans have been able to buy loaves from a garage door that leads into their warehouse, but the bakery did not produce bread for two weeks after the storm, and it took them two to three months to get back to pre-Sandy production levels. Preserving and rebuilding New York Bread has meant that co-owners Gennady and Victor have had to take on a substantial amount of credit card debt.
We put all food, all flour, all sugar, salt, ingredients in dumpster, and pay $1,000 to garbage man to get it out. It's what you have to do. We improve everything without any help, it's unbelievable. First, when we believed that somebody would help us and give money for loan—we don't ask help without interest, we ready to pay interest—but we cannot get it. And fix our ovens and make them work. Not as good as we can, but we still work.
We call to administration, to SBA, many times. They say, "It's up to you, guys." Government give us $14,000 in loan with interest, it's nothing. One of my five ovens, the price is $80,000. I smile and believe that everything will be good. I like America, and I believe that somebody help us. But I don't know.
Rockaway Beach Club
The Beach Club, whose Maribel Araujo (owner of Caracas Arepa Bar, one of the group's key members) we spoke with in June, returned to the beach on July 4th. But a lot has changed. There is still no boardwalk, parts of the beach remain closed, and rebuilding was frustratingly controlled by the Parks Department, their landlord. Rockaway Taco co-owner Andrew Field, the force behind the group's founding, made the decision to step back from the concessions.
We were fighting the whole time. Parks didn't have a plan, nobody had a plan, for the whole process of the rebuild nobody knew if those buildings were going to be done. For us, we didn't want to lose the momentum. So between all the Rockaway Beach Club members we had that desire to do work out of these shipping containers, which were completely self-sustainable. All they needed to provide were water and electricity—well, water was the bonus. We just needed electricity, and permission to put them on different sites on the beach.
It's a gigantic job to accomplish, and this isn't a criticism on anything or anyone specifically, but all we were asking for was the permission to do it. We weren't even asking for money or funding. Just say yes and we'll take care of the rest. We know how to make it interesting and exciting. And it just lagged, and lagged, and lagged."
The summer was good, from the community out there, and everyone was super happy to see us. But city-wise it was a disaster. They just made it really hard for us to run what we're supposed to run: a restaurant on the beach," Maribel Araujo added. "The communication between parks in Central Park, Parks in Rockaway, and the contractors was, it took weeks just to get one request over here to go back here to go back here. Every time you called the city you somehow ended up with more homework. You called to request something, and you ended up with an assignment which is usually, "Well can you please send us a list of all the things and we're going to work on it?" And I had been doing that all summer. From my original list to my last list, maybe two things were done.
Others were more fortunate.
Added Value's rebuild was done with support from the city, while Essex Street Market vendors Saxelby Cheesemongers, Boubouki, and Heritage Meats reported positive experiences. Both Heritage's Patrick Martin and Anne Saxelby praised the New York Business Development Corporation. "Those people came in and were unbelievably supportive when we were at our weakest," Patrick said. Anne told us that she received a $25,000 from them, and was contacted by the department of Small Business Services this summer about another $10,000 grant. Totonno's in Coney Island is currently working on getting a grant to improve their storefront.
Insurance and the Private Sector
When we spoke with La Newyorkina's Fany Gerson earlier this year, her South American-imported paleta machines were wrecked, she could no longer afford to stay in her flooded Red Hook kitchen, her insurance company had stopped returning calls, and her plans for opening a storefront were delayed at least a year. Her losses were even greater than she initially thought: around $100,000 in rebuilding costs and an estimated $10,000 in sales. Early summer was rocky, but a good relationship with her landlord has kept her in Red Hook with her spirits up as she looks for ways to flood-proof her space for the future. She hopes to open her own store next year.
In order to apply for government aid I had to show what my insurance would cover. But [the insurance company] took months to say they wouldn't cover anything, and then a lot of government programs weren't available anymore. My landlord and I lived through the same thing, the same lack of support from insurance companies. Everybody has the same stories: "Did you have insurance? Yeah, but it didn't cover it."
Although the revered cheese shop's retail stall was spared physical damage, Anne Saxelby's production kitchen in Red Hook was flooded with three feet of water. On her business partner's insistence, they had fortunately moved all perishable product out the night before, storing it in a friend's Long Island City space. Despite not having power in Red Hook for two weeks and losing a freezer, packaging equipment, and plenty of inventory there, this allowed them to get back on their feet in a matter of days. A $25,000 grant from the New York City Small Business Development Corporation, as well as a matching donation from a friend, and another $10,000 grant from the SBA this summer, all help. But Anne says, "We took on pretty serious debt that we didn't have before, and we needed to do that immediately because otherwise we would've closed."
The only thing our insurance would reimburse us for was spoilage, which is really frustrating because you have these insurance policies and then they say, "Oh, sorry we're not going to cover business interruption or anything like that because it was a natural disaster or a flood." We probably lost about $125,000 in sales that week just from wholesale, another $5,000 from retail. That's pretty significant interruption for a business of our size.
A number of businesses around the South Street Seaport, including the historic Bridge Cafe, remain closed. Il Brigante, the Front Street pizzeria whose long road to recovery we wrote about in May, is among them. The restaurant still has not reopened, a result of delays in their rebuilding process. In late September, the owner told us she is going on estimates from contractors saying they should be ready to open by the middle of October.
After getting my Department of Buildings permits in June, it took another six weeks to start construction because of the difficulty of getting insurance requirements by my landlord. It was just a nightmare, because the requirements were so high. I don't think anyone expected this—I had to get a new contractor, he thought it would be fine, because the rates were five times higher than he was used to carrying.
Northern Spy Food Co.
The East Village restaurant suffered no flooding the night of Sandy, but the loss of power killed a week's worth of sales and meant they had to get rid of all their perishable inventory. Owner Cristophe Hille broke down the losses to us in the first days after the storm, which totaled $35,000. Northern Spy was invited by the Great GoogaMooga's organizers to participate in the summer food festival as part of their "Sandy Row," which they hoped—like others—would make up for those lost sales. Despite having business interruption insurance, they received no coverage.
Our business was hurt by a power failure. Con Ed very quickly put out a statement saying the power failure was caused by a flood and therefore its a natural disaster and not their fault. And everyone else used that as cover. We didn't get a dime from insurance. We never heard from them again. They didn't do a thing for us. They sent a claims adjuster who was super cheerful and positive and said he would do his best for us. They hired these claims adjusters who spent a couple months in the area, took all this information from us, and it was all B.S. They turned around and said no.
Across the river in New Jersey, Brad Finkel's new empire of farm stands, marinara sauce, and sandwiches suffered losses on multiple fronts. His sandwich shop was closed for 17 days—after being closed for 12 days the year before as result of Hurricane Irene and a nor'easter—incurring $50,00 to $60,000 in lost sales. Total losses approached $100,000, none of which was covered by insurance. And while his Hoboken facility didn't sustain physical damage. he had to move out. It took Hoboken Farms six weeks to find a new location and three more months to build it.
When I went to my insurance company, they asked, "Why didn't you have power?" Well, because all the trees took down all the wires and all the electricity was off. "Well, okay, did a tree hit a building?" No. "Okay, then you're not covered." If a tree hit my building, I'd have been covered. But because it was the third time in a year that we lost significant power, the insurance company was going to drop us if we didn't purchase and install a specific generator. Which by code we couldn't do, because it was too big to fit in the area.
So we had to move because we couldn't get insurance. We had to sustain all of those losses and at the same time find money to move into a new space, build new refrigerators and freezers, a loading dock and all that. We continued to pay our staff, we paid rent, all of the fixed expenses do not go away.
The Red Hook seafood restaurant re-opened four months after Hurricane Sandy, and told us stories both uplifting and sad. After the storm, their basement was completely flooded, the kitchen had to be rebuilt, and the walls torn down to get rid of mold. Their losses totaled $100,000, $25,000 of which was covered by the city. They opted out of applying for an SBA loan, saying, "The time you spend doing that versus rebuilding is a little counterintuitive." And while they credit the support of local organizations, neighbors, and their landlord with making their comeback a reality, they had their share of negative experiences.
We actually tried at one point to compile a list of equipment needs for all the neighborhood businesses, and Kevin approached a whole bunch of manufacturers. One of the VPs of Charleston wrote back and said, "I think we can help you, and maybe we can get a list of the dents and dings and supply the products." We went around to every single business we could find in the neighborhood and made this huge list of needs, they gave us a contact, and we went to a showroom at Javits and met this guy. And he said, "Oh yeah talk to this salesman." We set up these meetings, and he met with our people, and after all this work of getting this list together, to get everyone a break on equipment, obviously it would've been easy for them, but he didn't give us any kind of break. What do you mean, why are you giving us prices we can't afford? We could get them cheaper on the Bowery.
Insurance is designed to cover costs following disasters, but it usually can't address longer-term, systemic costs. For Heritage Meats, that meant a backlog with some profound implications, as owner Patrick Martin explained.
We move about 50,000 pounds of meat a week, and no one wanted about 40,000 of that the week after the storm because they restaurants were closed. The next week we still had another 40,000 pounds coming in because of the cycle of agriculture. Once farmers gear up to do 200 pigs a week, those pigs are going to come no matter what. If you're going to cancel with them, you need to give them weeks or months of notice."
You don't want the animals to have died in vain. When you kill 100 pigs and they're all going to get thrown in the garbage, that's stressful. It's a very tenuous restaurant-supported agriculture system that we have, and the hurricane really wiped that out and caused big problems.
The Lasting Impact of the Storm
Pasanella & Sons Vinters
Financial District wine store Pasanella & Sons suffered hundreds of thousands in losses on the night of the hurricane. While the store, which was flooded with six-and-a-half feet of water, has been open since November 19th, sales plummeted as a result of the continued absence of many local residents and the drop in foot traffic. This protracted hit has been particularly hard to swallow, because, as owner Marco Pasanella told us back in May, his business's bread and butter is local residents buying $10 to $12 bottles.
If we didn't own the building we'd be be in a really tough place. I don't know if we would still be open. People are just starting to return [to the Durst Corporation buildings on Front Street], but they aren't all the same. Some of those former tenants found new places to live.
Northern Spy Food Company
We just lost a week of sales and inventory, probably $4,000 worth of stuff that we gave or threw away. Then there was sitting around, losing a week's worth of salaries, and we carried all of our managers' salaries so that's $5,000 worth of payroll with no work getting done. You don't notice it right away, but two months down the road you're like, "Wow, why is my bank account so low?" It took several months for that to play out, but when it finally does you notice. The way we accumulate profit is extremely slow. When something like that happens you do realize how long it takes you to get back to where you were. These days if we're doing everything right we net $5,000 a month. $35,000 is six months of work under ideal circumstances.
Added Value Farm
After Hurricane Sandy, Red Hook's Added Value needed to rebuild their entire site. They first embarked on an ambitious program of bringing farmer- and consumer-donated produce to the neighborhood before doing a community food assessment that involved surveying neighborhood businesses and homes. Rebuilding began in May with help from local businessman John Quadrossi, private foundations, and the city governments, and is ongoing. The farm's soil needed to be replaced, as it had been contaminated with trace amounts of silver, mercury, acetone, humane fecal matter, and a few other elements, and they have installed buttresses, won a grant for five mobile storage containers, and are installing five-kilowatt solar units. Farm founder Ian Marvy tells us:
It's been hard, and it's still hard. The new soil's pH is just too high, so we're basically unable to grow food on the farm this season. We're not growing here this season and that would have been $60,000 of sales. Typically we would have three farmers here this season, right now we have one because Kenny can maintain the systems without support. There's still the finishing touches of rebuilding, like for the solar array we just moved that container this morning. The battery packs are in there but not connected.
Starting right after Sandy, we were down 30% until the mid-spring. Remember, one of things that happened was that a lot of businesses and a lot of people were also waiting for that insurance check. You had to fix your buildings, fix your houses, and buy your cars without that check. Those insurance checks didn't start coming until, in a lot of cases, late spring.
It's $18,000 for us to produce a batch of our marinara sauce. That has to be paid upfront, and under normal circumstances we hope to get paid in 30 days. But if you can't get gas to ship then it sits in your warehouse, and there aren't lights on for stores to sell it anyway. With the restaurant business, whatever is lost is lost. No one's coming back the next day to buy twice as much.
The commissary kitchen that Robicelli's bakery is based out of, Hana Kitchen, was without power for two weeks. A gas leak followed the week after. Unable to produce their cupcakes and other baked goods for the first few weeks after the storm, they suffered dampened sales well into 2013. Their future plans, which before the storm included the possibility of opening up shop in Red Hook, were irrevocably changed, co-owner Allison Robicelli told us.
We lost a decent amount of clients who had been affected by the storm. Last year got really freaking scary for us. A lot of receipts were down for the holidays, so a lot of the money we had expected to make over Christmas wasn't there. We had a very lean January through March.
It became very unattractive to do business in Red Hook. We started looking there again and people were saying it's still prime retail, and I was like, "I have no desire to build something that could be destroyed." There's a lot to be said about wanting to believe in things and wanting to believe in neighborhoods, but there's nothing to be said about telling your employees, "Oh, we're out of business because we wanted to believe in a neighborhood." Or telling your kids, "Oh, our money, business, and jobs are gone because we wanted to believe in a neighborhood."
Fany Gerson echoed Allison's concerns. While she is staying in Red Hook for now, whether she does so in the long term is contingent on her ability to protect her kitchen and business.
I contacted an organization the guys from Baked told me about, that can go see your space and tell you what you can do to protect yourself. To see how much it would cost, if it would even be feasible, and to have as many tools to get as possible. So I want to figure out how much it will cost and if there is anything I can do to protect from a possible flood. But if I just get coverage, emotionally, I can't deal with that again.
While Anne Saxelby was lucky to have moved all her product out of Red Hook the night before the storm, she worries this won't be possible in the future.
In the next five years we've been thinking we might move out of Red Hook because, even though we love the neighborhood, as our company continues to grow it's only a bigger risk. When you're the size we were last year it's really damaging. But if you're bigger, it's harder to be nimble and to recover as quickly.
Rockaway Beach Club
Rockaway Taco withdrew from the Rockaway beach concessions, the hurricane halting their growth and changing co-owner Andrew Fields's perspective about expansion, while the continued absence of the boardwalk—the community's artery—created a bipolar business climate for the concessions. When it will return is not clear.
It changed the pattern of the way people behaved on a rainy day, for example people are not able to ride their bikes. If we had a sunny, beautiful day we were packed and crazy. But if it was grey, then, we just had a very slow day. For older people who have trouble walking, I talked to a woman three to four weeks ago and she said, "I finally made it here!" She told me was too scared to cross the street, now she has to go through traffic lights instead of just being on the boardwalk.
They haven't really said what the final plan is. They're supposed to start working on it and have it ready by summer. I asked Parks, so do we know what's happening by next summer? And they replied, "What do you mean?" So I asked if the beach is going to be closed. And they said, "No, the beach isn't going to be closed." But that's exactly what they said last year and it didn't happen.
See part two on community support and the lessons businesses learned from the storm.
About the author: Chris Crowley is the author of the Bronx Eats and Anatomy of A Smorgasburg Pop Up columns. Follow him on Twitter, if you'd like. In person, your best bet is the window seat at Neerob, or waiting in line at the Lechonera La Piranha trailer.