Plenty of work for cleanup firms. Now try to get paid | Crain’s New York Business

Our CEO Damon Gersh talks with Crain’s about the current realities of mounting a large scale response after Sandy.
Plenty of work for cleanup firms. Now try to get paid | Crain’s New York Business.

 

Mike Conlon’s business, 360 National Restoration Ltd., is deluged with jobs—literally.

From 23rd Street to Wall Street and from Long Island to New Jersey, the 10-employee Manhattan firm is pumping out water and dehumidifying properties while assisting maintenance companies in cleaning up the soggy mess left behind by the overflowing Hudson and East rivers.

Mr. Conlon said 360 National was still “getting a lot of phone calls” but was “handling the volume” of work, thanks to alliances with other companies that have supplied his firm with additional labor and equipment. A veteran of the restoration field who launched 360 in 2011, Mr. Conlon said that a profitable firm’s revenue can fluctuate from year to year and can exceed $3 million annually.

Throughout the city, small companies providing disaster recovery and tree-removal services are striving to keep up with the onslaught of business. With more work than they had ever imagined, these firms are doing everything from giving top priority to clients in the most hazardous circumstances to hiring more employees to handle the sudden influx of jobs.

Emergency loans

 

But there’s a flip side to the post-Sandy boom in business. Many companies are experiencing the same challenges as some of the customers seeking their help—no electricity, depleted fuel tanks and erratic phone service.

“It’s an unprecedented challenge,” said Damon Gersh, president of Manhattan-based Maxons Restorations Inc., which regularly tackles flood, water, fire and smoke damage for its customers. “Cell service is spotty, and workers are living in blackout conditions.”

Mr. Gersh said business is “far outpacing” his 50-employee firm’s manpower and equipment. “With 9/11, people had dust and could wait a few days, but they can’t wait with water,” he said. “Everyone’s clock is ticking at the same time—commercial, industrial, homes, small businesses—and the jobs we have are very labor-intensive.”

Making matters even worse, many small firms are already experiencing cash-flow problems, courtesy of hiring more workers and buying additional equipment to meet the demand for their services. In the past week, Rohit Arora, CEO of Biz2Credit, which specializes in small business finance, said his Manhattan firm has helped 35 service companies, including tree- and trash-removal firms, apply for loans from banks and from the U.S. Federal Emergency Management Agency through the U.S. Small Business Administration.

Mr. Arora anticipates an even greater need for small business financing in the next week to 10 days, as more homeowners and business owners return to their properties and seek to repair them but opt to wait until they receive checks from their insurance companies to pay for the work. In good times, it can take anywhere from 45 to 60 days for insurance firms to cut a check for reconstruction projects, he said.

With as many as 40 jobs underway, including 25 that run “several hundred thousand and higher”—as in a large TriBeCa garage submerged in 16 feet of water—Mr. Gersh has partnered with a half-dozen companies from beyond New York City to secure additional personnel and equipment. And for his own arsenal of machinery, which encompasses 20 water pumps and 15 generators, he has purchased more than 50 of each for an expenditure of more than $300,000.

Depleted gas tanks

 

“Our expenses have gone up tremendously, so having a good banking relationship at this point is pretty helpful,” said Mr. Gersh. Although he declined to reveal the profitable firm’s annual revenues, he said post-Sandy business could double Maxons’ annual revenues within a two-month period.

Three-employee firm Erik Maldonado Landscaping in Jamaica, Queens, has brought in an additional worker to handle the upsurge in business, which includes tree removal and leaf pickup. But, according to owner Erik Maldonado, fallen trees blocking side streets and the gas shortage have cut into his company’s ability to meet the surge in demand for its services. Mr. Maldonado said the firm, which generates annual revenue of $100,000, anticipated pulling its trucks off the streets because of depleted gas tanks.

With a 12-person crew, Bill Logan, president of Urban Arborists in Brooklyn, said emergency “triage work,” including removing a large tulip tree with a vertical crack on the Lower East Side, represented his immediate priority. The profitable firm, which generates more than $1 million in annual revenue, is generally handling one to three jobs a day. Urban has no plans to hire more employees because its projects require “highly skilled” workers, Mr. Logan said.

While Urban’s tree-removal fees can go as high as $10,000, depending on a tree’s size, condition and location and whether equipment is required, the post-superstorm work, said Mr. Logan, comes at the expense of designing gardens and fall plantings, which represent “a great deal” of the firm’s revenue.

Tree-removal jobs also take their toll on the human spirit. “It’s exhausting and sad work,” said Mr. Logan. “We love trees and don’t like them destroyed.”

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