Six Months Later, Businesses Still Face Many Questions While Rebuilding

This past Monday marked six months since the storm that reshaped the Jersey Shore.  In just six short months, people have responded, action groups have formed, contractors have been busier than ever, and general progress has been made.  However, it's important to remember that we're six months into a decade-long rebuilding process.  This means that we still have plenty of unanswered questions and the path is not entirely clear yet. 

As you may know, locla contractors and professional firms have been organizing seminars and events in an attempt to educate homeowers and business owners on the nuances of recovering from this storm.  The seminars provide insight on topics such as insurance claims, flood zone maps and new building requirements, how to hire a contractor, and the like. 

I attended a seminar on April 25 called Rebuilding the Jersey Shore: One Business at a Time.  The seminar was organized and hosted by Connell Foley, a NY and NJ law firm with six offices, including one in Spring Lake.  The format of the event was a 5-person panel discussion with a question and answer session to follow.  Most of the seminars that I have been attending have focused on rebuilding homes, but this one focused on rebuilding our businesses.

As we all know, small businesses are the backbone of any local economy, and the Jersey Shore is no exception.  Without small businesses and local tourism dollars, many people are without jobs and careers and thus do not have the financial means to repair and move back into their homes.  Over time, an area in this situation risks a period of stagnation and undesirability, until it can begin the cycle of rebuilding small businesses once again.  Fortunately, we all know the Jersey Shore is different.  It’s not that we’re immune to the story described above.  Rather, because of our unique geographic location with some of the most beautiful beaches and natural resources in the world, the odds are in our favor.  Add to that a healthy dose of New Jersey can-do attitude and optimism, and the situation seems much brighter.

But it does take time and resources.  And that’s what the panelists discussed at this seminar.  The overall discourse is that, while 6 months have passed since the storm and some progress has been made, we are really just beginning, and we have more unanswered questions at this point than we do answered ones.  We are 6 months into a 10-year rebuilding process.

The panel was moderated by Brendan Judge, partner at Connell Foley LLP.  He first handed the microphone to Owen McCarthy, a fellow partner at Connell Foley.  Owen immediately clarified some of the information surrounding the now-infamous FEMA flood zone maps.  Something that I did not previously know is that a national flood-mapping process began on July 1, 2012, which was the effective date for the Biggert-Waters Flood Insurance Reform Act of 2012.  The mapping process was scheduled to take 2 years and its purpose was to make changes and updates to the way the National Flood Insurance Program (NFIP) is run.  The flood maps had not been updated in twenty years.

When Superstorm Sandy rolled through on October 29, FEMA had to adjust course immediately.  They had to release some sort of local flood maps as soon as possible so the rebuilding process could begin.  So, with the best available information they had at the time, on December 15, 2012, they released their preliminary flood zone advisory maps, or ABFEs, an acronym for Advisory Base Flood Elevations.  Since FEMA acted quickly and released the ABFEs about 45 days after the storm, they had to err on the side of caution and make them as conservative (read: strict) as possible. This is why there has been so much backlash.  FEMA acted in good faith and with the information they had available at the time.  Studies like this take years, but they only had 45 days.  As they are now, the ABFEs are still only advisory and are not final.  The final flood zone maps are not due to be released until August, 2014.  No, that is not a typo.  They will be released next year as originally scheduled.

Currently, individual towns and municipalities are challenging the flood maps and submitting complaints to FEMA, claiming that the maps are too restricting and they will ultimately drive people away from the area who don’t have the resources to rebuild to the proper specifications.  From what we hear, FEMA is taking these formal complaints into consideration as they design the final maps. The bottom line for homeowners and business owners is that, if you want to rebuild right now, you must rebuild to the specifications of the current ABFEs.  The restrictions may be lowered next year, but there is no way to determine that right now.  Unless you want to wait until the final maps are released in August, 2014, you must build to the current specifications.

The next panelist was James Oris of T&M Associates, a regional engineering firm with local offices in Middletown and Toms River.  James walked us through the specifics of the different zones of the flood zone maps, including A Zones, Coastal A Zones, V Zones, and AO Zones.  If you are not sure in which zone your home or business is, you can view the FEMA ABFE Interactive Map or use the address lookup tool.   The rules and caveats for each zone are different and can be complicated, so James recommends that we do not try to navigate the rules ourselves, but rather engage an engineer or architect to guide us through the process.

Kevin Coakley was up next.  A partner at Connell Foley, Kevin focuses on environmental law, real estate, and land use.  Kevin walked the audience through a specific court case in Ocean County that is soon to be argued in the New Jersey Supreme Court.  The case is Harvey Cedars v. Karan and you can read a recent summary about it in this article.  The Karan family, beachfront property homeowners in Harvey Cedars, NJ, are fighting a proposed easement by the United States Army Corps of Engineers (USACE) to build a dune in front of their house, and in fact all along the beach, to protect the town from future storm damages.  The Karan family is arguing that the dune will obstruct their views and devalue their property and home.  Harvey Cedars is arguing that beachfront property owners, including the Karan family, will receive a 'special benefit' from the dune that other homeowners in the town will not receive.  This special benefit, argues Harvey Cedars, offsets the loss in property value for beachfront homeowners.  The case has huge implications for our area and is worth keeping an eye on.

Stuart Koperweis, SVP of Economic Development & Revitalization for Millennium Strategies, was the next panelist.  Millennium Strategies is a New Jersey grant writing and economic development firm.  Stuart has an extensive resume with experience in both the public and private sectors.  He and his firm have done several studies on the small businesses impacted by Superstorm Sandy.  He presented some eyebrow-raising statistics:

• 390,000 New Jersey businesses were affected by the storm
• 98% of those are small businesses with fewer than 20 employees
• There is a $300 Million grant to help NJ small businesses, but only 10,000 businesses out of those 390,000 will receive any money.
• The grant program helps businesses on a first come, first served basis, without much consideration for priority or merit.
• 93% of affected businesses have applied for a Small Business Administration (SBA) loan and have been denied.

These are just some of the statistics that Stuart presented.  As you can see, numbers like these make us realize that we have more unanswered questions than answered ones at this point.  Stuart stressed that rebuilding starts with the local retailers and communities, not with the legislature.  As community members and business owners, we are the ones who are on the ground level and can see what we need, what will work, what will not work, and how to begin rebuilding. Stuart pointed out two online resources that I found very helpful and interesting.  The first is the news center on the New Jersey Economic Development Authority’s website.  They have up to date reliable and official press releases focused on Sandy redevelopment and NJ development in general.  The second resource is a New York Times article that highlights the city of Rotterdam, Netherlands.  Rotterdam is a city to which New York has been compared, not because of what’s on the land, but because both cities are surrounded by water.  Rotterdam has successfully implemented a system of small rivers and dykes that can weather storm surges and rising sea levels.  It’s a thought-provoking read.

The final panelist of the presentation was Jim Kiernan, regional market president for TD Bank.  TD Bank was one of the sponsors of the event.  Jim highlighted some of the programs that the  bank has in place right now to help homeowners and business owners finance the rebuilding process.  Although TD is a larger bank, they have a strong local presence and they are sensitive to the specific needs of affected residents and business owners.

Overall, the panelists presented a breadth of information and answered dozens of questions that we all have surrounding the rebuilding process.  The Rebuild New Jersey initiative is under way, but it is clear that we have only scratched the surface in getting our towns back to normal, and even to a better place than they were before.  Whether or not you believe in global climate change, storms have been occurring with increasing frequency and magnitude over the past few years.  It is imperative that we not only rebuild our state to where it was before, but to build it stronger than it’s ever been so we can withstand the next storm. I welcome any questions or comments in the comments section below.  Let’s keep this conversation going.