Losses for OC merchants mounting

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OCEAN CITY – The economic losses in Ocean City due to Hurricane Sandy continue to mount.

A great deal of the damage occurred along Asbury Avenue, in the heart of the city’s downtown and home to over 100 shops. In addition, several local restaurants and small businesses, including professional offices in surrounding flood-prone areas, were also under water. 

Michele Gillian, executive director of the Ocean City Chamber of Commerce said the storm would have a “devastating” economic impact on the city for months to come.

“Of course the Ocean City community is going to rebuild,” she said.

But in the meantime, merchants are struggling because each day they are closed is another day with escalating expenses, and no income, she said. For some, their inventory was destroyed and their waterlogged businesses may take weeks if not months to re-open, meanwhile the mortgage or rent is due.

On the cusp of Black Friday and the Christmas season, the storm couldn’t have hit at a worse time, Gillian said.

The situation ripples through the economy as each of the businesses employed others, who are now out of work, and depending on where they lived, may also be homeless without income.

“We will get through this, but it’s going to take a long time,” Gillian said.

Steve Brady, CEO of Ocean City Home Bank, said businesses have a tough road ahead.

“It’s too early to tell just how difficult this will be,” Brady said. “A lot of the impact depends on the insurance companies and how they react. It depends on FEMA and how they react.

“Was this considered a hurricane by insurance standards or not? There may be some exclusions; if it’s a hurricane, it’s treated one way. If it’s a storm, it’s treated another. Some have flood insurance, some don’t. Some have insurance for the contents of their businesses, others don’t.

“There are a number of businesses that may not get back up and running,” he said.

Brady said he has heard “so many different stories, each incident has its own circumstances.” 

“Most of the damage we are hearing about is limited to the first floor and the garage. Most of the damage is from flooding,” he said. “The good news is that the storm could have been a lot worse and the mainland was unscathed.”

Even businesses that were not flooded, he said, struggled through the storm. Each day they were without power or the Internet means lost business.

“It’s the trickle effect. It’s not good. We just don’t know yet how bad it’s going to be,” he said. “Each business, particularly the restaurants, means people out of work, and those people aren’t spending.”

On the flip side, he said, some businesses are booming. For the duration of the cleanup, plumbers, electricians, environmental cleanup outfits and building contractors, he said, are working overtime to keep up with the demand, but that flurry of activity will never make up for what was lost.

“It’s a mixed bag,” he said.

While a homeowner may purchase a new HVAC system, they won’t be able to spend that money somewhere else, they will cut back on other purchases, like restaurant meals, for instance, as the purchase cuts into their discretionary income, Brady said.   

The average loss, he said, should be in the $35,000 to $40,000 range.

“We will see a lot of hot water heaters, washers, dryers, carpets, mold remediation, that sort of thing,” he said.

Obtaining payment could take months; meanwhile the home or business owner must pay up front for the needed goods. Ocean City Home Bank, he said, is working on a loan program to help.

“We’re resilient people,” he said, adding that he thinks the situation will not be so dire in the long-term if businesses are able to make it through the winter. Summer rentals for next summer should be strong, once the housing stock is repaired.

“People are still going to want to come to the shore,” he said.

“It will be a process. The bottom line is that each day we are finding out something new,” he said. “Hopefully, we will never have to deal with a storm like this again in our lifetime.”

Mayor Jay Gillian said the city is helping merchants in dealing with the Small Business Administration to obtain low-interest recovery loans through OCNJ CARE.

Gillian said it’s critical that people “shop locally.”

“Please, I hope everyone shops locally, stay in Ocean City,” he said.

Marcia Shallcross, executive director of Main Street Ocean City, echoed that sentiment.

“Keep the money in town,” she said. “We can’t lose our downtown, but in order to keep it we have to support it.”

Shallcross said she remains cautiously optimistic that a large number of stores will be up and running for the Nov. 17 Earlier than the Bird shopping event.

Skip Tolomeo, president of the Retail Merchants organization and owner of Sea Oats children’s shop, said some merchants will have a difficult time re-ordering merchandise for Christmas.

“For children, getting more Christmas clothing? No way,” he said. “It’s all gone. It used to be that you could re-order, you can’t do that anymore. Where they used to make 90 dozen of one style, they now make half that. The economy had a big impact. You have to order what you think you may need, it’s now gone, impossible.

“This is going to be a terrible struggle for everyone,” he said. “Cash flow becomes a problem. All the money is going out, trying to rebuild, but you have no money coming in, and what about your employees?

“We, as the Retail Merchants will do everything we can. We’re going to be positive, but the economic impact is real.”

The chamber, Michele Gillian said, is planning to host an educational symposium so local merchants can learn how to navigate the FEMA process and other programs, including the SBA. 

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