Corporate Responsibility

The Perfect Storm

Posted by: Chris Freeman Chris Freeman
on February 26, 2018

During my 25 years in property management, I’ve been through, and have personally dealt with, almost all types of natural disasters, weather, and man-made events that you can think of. The hurricanes and wildfires we experienced last year, however, make 2017 one that I will never forget!

As you all know, Hurricane Harvey kicked off a trifecta of hurricanes when it slammed into Houston, Texas on August 26 as a Category 4 storm. This was soon followed by Hurricane Irma, a Category 5 storm which blanketed the state of Florida beginning on September 6. Then, on September 20, the hurricane that we all feared would someday hit Puerto Rico made landfall, and its name was Maria. If the hurricanes weren’t enough, in October, Northern California experienced some of the worst wildfires in the state’s history, known as the “Northern California Firestorm.” Over 245,000 acres were burned, including land and properties directly adjacent to Kimco shopping centers.

Thankfully, Kimco has refined its disaster response plan over the years to further fine-tune our response and recovery efforts following these events. Our first concern is always the safety and security of our employees, retailers, and customers. Beyond that, we make every effort to ensure the properties are safe and cleaned so that they can re-open as quickly as possible. As with all natural disasters, like the 2017 hurricanes, Kimco has designated teams of engineers and property inspectors that jump into action as soon as it’s safe to get boots on the ground. Their mission is to identify and document major building and property damage. We use this information to initiate insurance claims and to help direct the efforts of local and national resources. Even with the extensive damage caused by Hurricane Harvey and Irma, the response effort was pretty straightforward — our inspectors diligently made their way to the sites by any and all means possible (car, boat, helicopter, etc.) and we were able to get the necessary people and resources into the regions within a reasonable period of time to begin the restoration effort.

From the perspective of responding to, and recovering from a natural disaster, Maria truly was the “perfect storm.” For those that aren’t aware, over 90 percent of Puerto Rico’s electric grid was destroyed, cell towers were devastated, and critical infrastructure like bridges were washed away by flood waters — not to mention the devastation to homes and businesses. The damage and destruction from the storm was compounded by the fact that it happened on an island in the middle of the Atlantic Ocean, which made getting resources in, or people out, nearly impossible. Fortunately, Kimco had prepared for years to deal with natural disasters, so we had put in motion our normal pre-storm protocol which entailed preparing our properties for a high-wind and flood event. Vendors were put on standby, and our property manager went through his own checklist of items in preparation for the storm. Given the dire warnings about Hurricane Maria, we also staged some very brave security guards at each site in safe bunkers with enough food, water, two-way radios, and other supplies to shelter in place for a week. These men became our eyes and ears, during and after the storm, that communicated critical information to our property manager regarding damage, looting, and tenant opening status.

Once the storm passed, it quickly became clear that this would be like no other event we had dealt with before. Word started to come in from our security guards that the properties sustained the kind of damage that we were expecting — roofs were blown off, light poles knocked down, HVAC units blown off their curbs, there was isolated flooding, and a few buildings sustained façade damage. The real problem, as we were quickly learning, was the wide-scale damage to the island’s infrastructure — roads, electric grid, running water, sanitary systems, fuel, airport, and the seaport were all down. Nearly all of Puerto Rico was in the dark, with very few resources available from outside the island.

Normally we could deal with this, considering that we have a great network of vendors in Puerto Rico who are able to handle everything from minor cleanup work to large construction projects. However, as we’ve learned from other large natural disasters, the labor force always has a delayed response because they’re taking care of their own families and homes. This is exactly what happened this time too, but much worse. There wasn’t a person on the island that wasn’t affected by the storm, and everyone was busy for days (some for weeks) finding family members and getting their own homes back in order, so the available labor was scarce.

As the hours and days passed, the challenges of recovering from this hurricane grew exponentially. Our first concern was simply making sure that our employees were safe and healthy. Unfortunately, one of our employee’s homes was severely damaged, and all of our people needed basic supplies — food, shelter, medical supplies, etc. Even though we had satellite phones on the island, the connection was unreliable. We eventually had to resort to holding conference calls late at night with our manager on the island. He could get a cell connection from one of the few towers that was still operable late at night, when the traffic on cell network decreased. During the day, hundreds of cars would literally sit on the highway near this same cell tower, making their calls to family and friends.

As I mentioned, our properties all sustained damage, although our two sites on the southwest side of the island were spared the brunt of the storm. We now had to begin the process of documenting all the damage, making the necessary immediate repairs, and working with our insurance carrier to file the claim for each site. This all sounds easy enough, but remember, there was no power, no fuel, a shortage of labor and materials, and the airport and seaport were closed to commercial traffic. If this weren’t bad enough, security was becoming a real problem, as businesses were being looted and people carrying fuel were being hijacked on the streets.

I can’t emphasize this enough… every possible option was on the table when determining how to help our people, get them the supplies and resources they needed, and restore our properties to an operable condition. We had some real problems to solve:

  1. Keeping our employees safe
  2. Getting materials to the island and securing them
  3. Procuring commercial-grade generators for basic lighting
  4. Securing enough diesel fuel to run the generators
  5. Providing a security presence at the properties to prevent mass looting
  6. Drying out tenant spaces and preventing the spread of mold.

Within a matter of days we were able to get the first inspectors into Puerto Rico to begin the more extensive site-inspection process, including looking for structural damage, testing air quality, evaluating major roof damage, and inspecting the parking lots for subgrade failure. We were fortunate that there was no structural damage, but there was extensive roof work needed across the portfolio. We immediately went to work to procure all of the necessary roofing materials, which to this day are still waiting to be shipped from the mainland to Puerto Rico! After a couple of weeks of trying to get materials and resources from the mainland to the island, we finally determined that we would have more success sourcing everything locally, or from neighboring islands, which is what we did for most items. We were, however, able to get basic humanitarian supplies, commercial and personal generators, and lighting supplies shipped in, which was a major accomplishment at the time. We were also able to fly in one of our construction project managers, who was originally from Puerto Rico. He provided much-needed assistance and relief to our property manager, who was working tirelessly night and day.

Slowly but surely our properties are being restored to their pre-storm condition. Our regional mall, Plaza Centro in Caguas, just reopened its food court a few weeks ago, and our last property that was without power had electricity restored shortly thereafter. Amazingly, most tenants continued to operate their businesses in the weeks and months following the storm without electricity and other basic services — a true testament to the resilience and hardworking nature of the people in Puerto Rico.

In retrospect, I couldn’t be prouder of my team and the job they did during these very challenging times. Each of the natural disasters described above presented its own unique challenges, which our people did an amazing job of overcoming. In the near future we will be doing a post-mortem review of each event and the obstacles we encountered, to see if there is a better way of handling it again in the future. Additionally, we will be ramping up our field training program to involve situational training. Lastly, we are taking a critical look at our business continuity plan for our regional and corporate offices, so that we’re prepared for any event that might strike where we have a corporate presence.

Special thanks to the Kimco team in the Southern region, Puerto Rico, and Northern California that went above and beyond the call of duty, especially those in Puerto Rico who endured the most extreme conditions.

  • Victor Aguilar, Property Manager – Puerto Rico
  • Guillermo Zegri, Project Manager – Puerto Rico
  • Luis Huaman, Financial Operations – Puerto Rico
  • Onelia Martinez, Property Assistant – Puerto Rico
  • Aracelis Lopez, Specialty Leasing – Puerto Rico
  • Levi Johnson, Property Manager – Houston, TX
  • Doug Fischer, Property Manager – Tampa, FL
  • Steve Dermangian, Property Manager – Tampa, FL
  • Jerry Bouche, Property Manager – Tampa, FL
  • Connie Hurst, Property Manager – Hollywood, FL
  • Mike Ware, Regional Director – Southern Region
  • Chad Johnson, Regional Director – Central Region
  • Maria Teos, Property Manager – Northern California
  • Brad Freeman, Regional Director – Northwest

These brave men and women worked tirelessly to ensure that our properties, tenants, and customers stayed safe and could return to normal operations as quickly as possible.

One last thing. On a personal note, while these events were occurring, and while I was coordinating the recovery efforts of our teams, I was also recovering from open heart surgery! I had just recently returned to work after undergoing heart valve and aortic artery replacement. Fortunately, my doctors seemed to have done a pretty good job, because I made it through with only moderate chest discomfort😊.

2 COMMENTS

It’s truly unbelievable to hear some of the details of what went on with recovery efforts. Amazing testament to the efforts of all of you. If this is not true dedication, I don’t know what is!

C Goldrick

February 27, 2018

Chris,

Thanks for sharing the details of what the Kimco Realty team endured and conquered during these tragic events. Great story of Kimco’s dedication to the well being of its employees, retailers, and vendors.

Troy Jones

February 28, 2018


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