Business is ramping up slowly for Madelaine Chocolate, the Rockaways chocolatier that reopened two weeks ago after Superstorm Sandy shuttered operations last year. The Queens company is among the many small businesses that has had to decide whether the cost of rebuilding in a flood zone is better than relocating outside city limits altogether.
Areas beyond the city have dangled incentives in front of Jorge Farber, Madelaine Chocolate’s CEO, but right now there are too many reasons to stay, he said. Farber and most of his employees live within miles of the facility, making a move to New Jersey or north of the city less attractive. Plus, local relationships can tip the scale: the company has been planting roots and reinforcing its network in the Rockaways for generations.
When the next storm hits, though, it all comes down to money. Last year, before the storm, Madelaine made about $50 million in annual sales. They expect to make half of that this year. While business is indeed growing, the damage that future flooding and wind could inflict might prove too costly to rebuilt altogether, no regardless of where.
“Another storm like this would probably just do us in totally,” said Farber.
Roughly 23,400 businesses had some level of flooding as a result of Superstorm Sandy, 650 of which received more than $20 million in loans and grants from the NYC Small Business Services, according to an SBS spokesperson.
Madelaine Chocolate’s 200,000-square-foot chocolate factory flooded with more than four feet of water, destroying tons of wrapped chocolate ready to sell. More importantly, and certainly more costly, the hurricane damaged mechanical and electrical equipment. As part of the rebuilding effort, the factory raised its electrical panels higher to protect against future flooding, but the machines themselves cannot be elevated much higher than they were before the storm, leaving operations vulnerable.
With help from Gerber Finance, and a loan from the Small Business Administration that came “just in the nick of time,” Madelaine has been slowly but steadily adding major equipment to expand back to what it was before. As they work towards a full-capacity facility, the company is focused on meeting short-term seasonal goals. Halloween production targets were mostly met, aside from a delay that forced the cancellation of an order, and chocolates have almost been completed for Thanksgiving and Christmas. Still, production is less than half of what it was pre-storm despite the factory starting operation in July of this year.
While Madelaine has a long way to go, they have the help of loans to fuel their re-growth. Other businesses have not been so lucky. The federal and local governments have been slow to award disaster loans and many businesses are still waiting to see the money that will help them move forward. Now that Madelaine is reopened, though, they are working on recovering their old contracts.
The chocolatier was out of the game for so long that other retailers filled in the hole left when they were forced to close. But the company has benefited from long-standing relationships with both customers and vendors and has mostly gotten its customers back.
Despite these strong relationships, Farber said that the decision to leave or stay is a continuous conversation. For now, though, the company has decided to dig in their heels and stay.
“Once you make a decision, you don’t look back,” he said.
Map Data Source: www.nyc.gov
Photo source: Madelaine Chocolate