Hurricane Sandy: Natural Disaster & Business Districts in New York City

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1 Hurricane Sandy: Natural Disaster & Business Districts in New York City JESSICA TAYLOR, EXECUTIVE DIRECTOR NYC DEPARTMENT OF SMALL BUSINESS SERVICES INTERNATIONAL DOWNTOWN ASSOCIATION WORLD CONGRESS & 59 TH ANNUAL CONFERENCE OCTOBER 6, 2013

2 Agenda! Overview of the NYC Department of Small Business Services (SBS)! Impact of Hurricane Sandy! Business needs following Sandy! New York City s response to Sandy, impact and lessons learned! SBS response to Hurricane Sandy and impact! Next steps

3 Headed by Commissioner Robert Walsh, the New York City Department of Small Business Services makes it easier for businesses to form, do business and grow! Business Development Provides direct business development services through the Business Solution Center network! Workforce Development Connects New Yorkers to jobs and trainings through its 19 Workforce 1 Centers! Neighborhood Development Invests in New York City s commercial districts by providing oversight to 67 BIDs and grants to 40+ local development organizations! Division of Economic & Financial Opportunity Manage the City s Minority & Women-owned Business Enterprise, Emerging Business Enterprise, and Locally-based Business Enterprise certification programs

4 The Neighborhood Development Division oversees and builds the capacity of local economic development organizations to foster stronger commercial districts! Vision New York City is the leader in building neighborhoods that thrive and innovate. Oversight of 67 Business Improvement Districts Funds 40+ organizations through Avenue NYC Grant Program Capacity Building! Sanitation! Security! Beautification! Marketing! Business Attraction! Merchant Organizing! Placemaking! Façade Improvement! Capacity Building! Retail Leasing! Website Development! Strategic Planning! Financial Management

5 The Neighborhood Development Division is unique for its longstanding relationships with many of the City s commercial districts Our connections with over 100 local development organizations helped the City give and receive information from businesses in Hurricane Sandy-impacted areas Avenue NYC Orgs. BIDs Manhattan Brooklyn Bronx Queens Staten Island

6 Hurricane Sandy was an unfortunate culmination of weather related events that devastated key areas in New York City! New York City had never experienced a storm of this size and surge 1,000 miles end to end! Sandy coincided with high tide in both the Atlantic Ocean and New York Harbor! Sandy s tide was 14ft. above the average low water level in Lower Manhattan! Two additional pressure systems caused Sandy to turn westward towards the City instead of eastward to the Atlantic Ocean Sandy Size and Wind Speed Katrina Size and Wind Speed Source: NASA; Special Initiative for Rebuilding & Resiliency Report Building a Stronger, More Resilient New York

7 The value of local commercial districts to the City s overall economy was magnified by the negative impacts of Sandy! 23,000+ businesses and non-profits were inundated by the storm impacting upwards of 245,000 employees! 95% of businesses were small or medium sized (< 50 employees)! Damage to businesses totaled approximately $8.6B Rockaway Beach Boulevard South Street Seaport Source: Special Initiative for Rebuilding & Resiliency Report Building a Stronger, More Resilient New York

8 70% of impacted businesses were located in 5 distinct zones and faced similar issues following Sandy! Clean up " Debris removal " Mold removal " Mold removal " Interior repairs! Electricity and heat! Depleted inventory! Broken equipment! Economic loss due to business closure! Economic loss due to reduced consumer base Gutted-out corner grocery store on Beach 129 th St., Rockaways Damaged equipment in Madelaine s Chocolate Factory, Rockaways

9 New York City played a critical role in mobilizing financial resources from private and non-profit entities, administering impactful programs with these resources, and informing businesses of these resources Financial Resource Emergency Loan & Matching Grant Small Business Assistance Grant Sales Tax Waiver Program Description $25,000 loan with 1% interest, potential for up to $10,000 matching grant $1M - $5,000 grants for businesses in need of repairs Stakeholders Goldman Sachs, New York Bankers Association, Mayor s Fund to Advance New York City, Partnership for New York City, SBS, EDC Barclays, Citi Bank, UBS, SBS $25M in total capacity NYC Industrial Development Agency, EDC

10 Mayor Bloomberg mobilized the City s existing employee base to provide non-financial services to impacted businesses Service Business Recovery Zone Initiative (BRZ) Restoration Business Acceleration Team (RBAT) Restoration Centers Description Assigned City employees to focus on 5 specific business zones most impacted by Sandy Coordinates with City agencies to expedite services, permitting and inspections needed to reopen Opened 8 additional information hubs to better connect businesses to resources Destroyed restaurant in Midland Beach Flooded business in New Dorp Beach

11 Mayor Bloomberg s Business Recovery Zone Initiative focused the City s financial and personnel resources on business districts severely impacted by Sandy Business Information session, December 2012, Rockaways Business Information session, December 2012, Rockaways

12 New York City responded quickly to small business recovery needs by tapping into cross-sector partners and administering services efficiently! 647 businesses received Emergency Loan! 498 businesses received Matching Grant " SBS packaged loan applications at its Business Solution Centers! 206 businesses received the Small Business Assistance Grant " SBS managed this program in-house! BRZ Captains canvassed over 1,000 businesses! RBAT contacted 875+ businesses and assisted over 150 businesses with approximately 315 different services across 11 City agencies! RBAT facilitated the Fee Relief for Business Recovery Law, which has waived over 40 City agency fees for nearly 100 businesses

13 Business Recovery Zone Captains had the most direct interaction with impacted businesses and were able to aggregate their concerns More Grants Poor Financial Management pre- Sandy Loan application process perceived as burdensome Lack of Recovery Plan Can more non-interest bearing financial resources be made available? Can cities be proactive in engaging businesses around better financial practices? Can cities provide additional personnel to help businesses navigate processes around recovery resources? Can cities engage businesses in recovery planning workshops before or immediately following a natural disaster?

14 Through its Neighborhood Development Division, SBS continued to leverage its knowledge of local business districts to engage these areas in a more resilient recovery Business districts without centralized local development organizations were less likely to take advantage of the City s resources and reopen quickly Business districts whose interests may have been neglected before the storm endured a longer road to recovery Business districts can better leverage pre-existing local organizations to affect economic revitalization on a large scale Destroyed boardwalk along Rockaway Beach Individual business needs evolved to include strategic decisions impacting the entire commercial corridor marketing, vacancy rate reduction, redevelopment Flooding in the South Street Seaport

15 SBS leveraged financial resources from private and non-profit partners to revitalize commercial districts impacted by Sandy Financial Resource Description Stakeholders Business Recovery Plan Workshop $100,000 worth of services to help businesses think through and develop a recovery plan IBM, SBS Capacity Building / Strategic Planning Support NYC Small Business Campaign Beach 116 th St. Storefront Improvement Program City-wide Storefront Improvement Program $225,000 to build capacity of commercial districts to support small businesses Free advertising for businesses impacted by Sandy $500,000 for new facades for Sandy-impacted businesses on Beach 116 th St $1M for new facades for Sandy-impacted businesses throughout the City MasterCard, SBS Citi Community Development, SBS Citi Community Development, Mayor s Fund to Advance New York City, SBS Mayor s Fund to Advance New York City, SBS

16 SBS is developing strategic frameworks in Sandy-impacted business districts to strengthen those areas in the long-term Neighborhood Beach 116 th St., Rockaways, Queens Midland Ave., Staten Island Red Hook, Brooklyn Brighton Beach, Brooklyn South St. Seaport, Manhattan Projects Merchant Organizing Marketing Business Attraction Quality of Life Community Re-Design Business Attraction Strategy (market analysis, consumer survey) Business Attraction Strategy (market analysis, consumer survey) Marketing Website Development Merchant Organizing Marketing Promotional Events Lawn sign promoting consumer survey, Rockaways Steering Committee Meeting on Beach 116 th St., Rockaways

17 The Beach 116 th St. Storefront Improvement Program provides tangible impact that demonstrates the business district s resiliency! $500,000 from Citi Community Development and the Mayor s Fund to Advance New York City! 47 applications! Average grant amounts range from $15,000 - $17,000! SBS administered program Three completed storefronts on Beach 116 th St., Rockaways Blue Bungalow storefront under construction, Rockaways

18 The MasterCard grant has allowed vulnerable business districts to develop strategic approaches to continued recovery! 2 new 501c(6) not-for-profits on Beach 116 th St., Rockaways and South St. Seaport, Manhattan! 3 Business Attraction strategies to help reduce vacancies and leverage unique assets of business districts! 3 new websites to better promote businesses! Leaders of business districts are thinking more strategically about the development of their districts! Leaders of business districts are more connected to financial resources

19 Post-Sandy business recovery continues! Continue support for MasterCard grant projects! Business Resiliency Investment Program ($100M): Provide funds to companies for physical investments to improve resiliency to severe weather! Neighborhood Game Changer Investment Competition ($100M): Fund projects or programs to anchor industry clusters and catalyze economic growth in targeted neighborhoods! Business Loan and Grant Program ($80M): Expand current loan and grant program and launch a competitive RFP to enhance program! Infrastructure and Building Resiliency Technologies Competition ($45M): Improve resiliency through competitions that deploy promising and cost-effective technologies