Recovering from Hurricane Sandy

hurricane7-Eleven franchisee Tom El-Dalati lost his flagship store in last year’s superstorm. One year later the struggle to rebuild his business continues .

By Dave Hochman, Contributing Editor.

Nearly one year ago, Hurricane Sandy slammed into the Northeast and Mid-Atlantic states leaving a stream of destruction and chaos for homes and businesses. Extreme winds, devastating floods of a scale heretofore unseen and widespread power outages caused damage to life and property that has been tallied at, at least, $50 billion in damages.
Sandy came ashore near the sleepy beach town of Brigantine, N.J., which is just less than 10 miles north of Atlantic City, and about 125 miles south of New York City as a post-tropical cyclone with hurricane-force winds. This area of New Jersey is part of 127 miles of the state’s Atlantic Ocean coastline. Eleven months later, much of it remains devastated by Sandy’s wrath.

The town of Sea Bright, N.J. is just 1.2 miles long. It separates the Atlantic Ocean from the Shrewsbury River. The borough’s small business community serves the residents and large influx of visitors who come to enjoy the beach clubs, marinas, bars and restaurants mostly in the summer months.

If, as many observers have stated, the Jersey Shore bore the brunt of Sandy’s force, the town of Sea Bright was among the Shore towns that were the most dramatically impacted. Tides rose nearly 10 feet higher than anything on record in the past. Few things along the coast survived, including Tom El-Dalati’s flagship 7-Eleven store.
The storm surge from the Atlantic Ocean overtook the beach and met the Shrewsbury River right in the center of town, which was at one point under 6-8 feet of fast-flowing saltwater. Most of the dwellings and businesses in town were destroyed, including El-Dalati’s store.

As of early August 2013, more than 10 months after the storm, only a handful of businesses in Sea Bright were operational, not including El-Dalati’s 7-Eleven in the center of town.

El-Dalati, a 7-Eleven franchisee since 1998, operates three stores in New Jersey. As we come up on the one year anniversary of Hurricane Sandy, he sat down with Convenience Store Decisions to talk about the storm, his Sea Bright location and his ordeal over the past 10 months.

CSD: In terms of the physical property damage, what happened to your store during Hurricane Sandy?
TE: It was as bad of a natural disaster as I have ever seen. The building itself was still standing, but everything else around it was completely destroyed. 7-Eleven had to write off the property and equipment, which the company owns, as a total loss, and they also wrote off the entire existing inventory in the store, which they did not own. Given the extent of the damage, 7-Eleven was not sure what they were going to do in terms of rebuilding. We didn’t find out what their plans were until December. I believe they were constrained from taking any action faster because of insurance issues. Plus, at that point the destruction was so dramatic and unprecedented, people were talking about changing the building codes in coastal areas, so who could know what the future was for the area? It was only supposed to take six weeks from the time they made a decision to rebuild it to the actual reopening of the store, but as you can see for yourself, it’s been quite a bit longer than that.

CSD: Being closed for business that long, especially coming into the spring and summer, obviously that means a lot of revenue you won’t be able to make.
TE: Yes. The loss of revenue has clearly had the biggest impact on my business. Spring and summer months at the Jersey Shore are extremely important because the winter months are very slow.

CSD: How bad were your loses?
TE: I took a loss on the things I owned that were in the store, like the security system, my office supplies and other equipment, but all that stuff is replaceable. My employees can collect unemployment insurance and then find new jobs if they need to. On the other hand, I can never replace the loss of revenue from the last 10 months; I can only hope to be able to try to make up for it in the future. 

CSD: If you had been open would that have mattered all that much, since so much of Sea Bright has also been shuttered?
TE: Absolutely. Even without a lot of the residents and other businesses, the town has been packed with officials, recovery workers and volunteers, and if we aren’t open, they’ll simply get their coffees, candy and sodas elsewhere. That’s sort of insult to injury, I suppose, missing out on all that business.

CSD: Overall, are you satisfied with the level of support you received from 7-Eleven in the aftermath of Sandy?
TE: They basically did all the right things in several ways. For example, it’s in the contract that if the store is closed for more than 90 days, they can take my franchise away. Obviously they did not do this and made it very clear they were ready to provide support as I needed it. When it was unclear as to what the rebuilding process was going to be with the town and all the permits, they offered me another franchise location to keep the cash flow going. I appreciated that support.

CSD: Did you consider abandoning the Sea Bright location for another unit?
TE: Given what we have been through, not at all. That location, right across from the beach is demanding, but it’s a great location that is very profitable, which really makes it worthwhile to operate. Plus, I’ve been developing that store into what it was for 15 years. It’s like my baby in a way and I’m not about to give up on it.

CSD: The convenience store industry always seems to be the target of lawmakers for the products it sells. What has the state, local and federal government done to assist in the recovery from Sandy?
TE: Basically nothing whatsoever. FEMA offered us a loan, of which the interest rates were higher than what my local bank offered. I don’t know where that $30 billion in emergency aid has gone, but I can tell you that none of the small business owners I know have received any financial help from the government at any level. A few days after the storm, our local mayor held a town meeting in a nearby high school gym that was covered by a lot of local media types, but nothing in the way of help ever materialized from it. Some local businesses may have received breaks on paying property taxes, but since I don’t own the property, that was irrelevant. The response has been extremely disappointing.

CSD: While this has been a challenging time, what did you learn throughout this ordeal?
TE: Although this has been an unprecedented disaster, it’s always been the case that you have to be able to persevere to succeed in this business no matter what happens. I’m now just literally counting down the hours until I can reopen, and once that happens, we look ahead and deal with whatever comes next.

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