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BFS Capital Blog

Has Small Business in the Northeast Recovered From Superstorm Sandy?

November 3, 2014

It’s been two years since Hurricane / Superstorm / General Agent of Destruction Sandy whipped through the Northeast, causing billions in damage and displacing thousands of homes and businesses. In the couple of years since, many beaches along the New Jersey shore have been replenished, boardwalks have been rebuilt, and damage to the 82,000 primary residences has been repaired.

But all is not back to normal.

According to Forbes, as many as 100,000 small businesses were adversely affected by the storm, and nearly a third of those failed as a result. This not only included direct damage, but also displaced local customers who no longer came in, employees who left town, and other ancillary effects that can easily drive a small business into the ground.

Don’t Count On Government Aid…

One of the larger barriers to recovery for many small businesses was the SBA’s low-interest loan program that was initially designed to get people up and running as soon as possible. Over 15,000 businesses applied for loans, and nearly 10 percent of those applicants withdrew their applications due to excessive red tape and governmental inefficiency. As of this August, the SBA reported that 10,726 individuals have gotten aid for a total of about $847.7 million.

The Government Accountability Office also recently released a report detailing the stalls in Sandy relief, recently presented to the media by New York Congresswoman Nydia Velasquez. By her side was Mark Snyder, owner of Red Hook Winery in Brooklyn, who detailed how even after he submitted the appropriate paperwork, he was required to do it again. And turn over his tax records at least ten times.

State governments weren’t much better, with New Jersey coming under especially high scrutiny. The state has over $167 million in aid requests, and as of April had only released just over $16 million.

…Or Insurance

While insurance companies picked up some of the slack, many didn’t cover everything.

“Never assume your insurance policy is a panacea for a big disaster,” Ian MacGregor, CEO of The Lobster Place – a New York seafood supply company – said in an interview with “It’s really important to take the time to fully understand how your insurance dollars are mitigating risk.”

Some Success Stories

In other areas, volunteers have stepped in, and some owners simply took matters into their own hands and fixed businesses themselves.

Westchester Magazine recently profiled a few Sandy success stories. Among them were Sean Dyer, who runs the Tennis Club of Hastings in Westchester County, NY. The club’s courts were ruined and the indoor court tarps caked in mud after Sandy. And while last summer, the club only had 64 members, this summer their riverfront deck is completely rebuilt and this past summer their membership rolls topped 300.

Another success story was Seaside Johnny’s, a restaurant near Rye Playland in Westchester. Owner John Ambrose said people’s confusion over whether Playland – a popular summer weekend destination – was open hurt business. But now that the boardwalk there is rebuilt, his business is getting back to normal.

That story is echoed by many businesses up and down the Jersey Shore, where CBS reported that business owners are reporting profits up 20 to 30 percent over last summer, when the entire region was still recovering. Earlier this year the state launched a $25 million ad campaign to let people know that the shore was ready for business, and that combined with a summer of favorable weather seems to have the area slowly making its way back.

It’s been a rough two years for those affected by Hurricane Sandy, and small business owners may be the best barometer of how well the Northeast has recovered. And while state and federal aid has been difficult to obtain, business is rebounding at a slow pace. Another good summer and the sands of New Jersey may be ready for another reality TV show. Which could be the only drawback.

Image courtesy of Supertrooper /