Rolling back the clock to reconsider a financial mistake: the Sandy recovery saga of Money Island Marina

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This past weekend we rolled back our clocks by an hour.  The concept triggered me to wish I that I could roll back my own clock by two years.

On this weekend, two years ago, the residents of New Jersey’s Delaware Bay shores faced substantial damage to our homes and businesses from Sandy storm that had just left its mark as the largest natural disaster the state had ever seen. The immediate needs were all-consuming: restore utilities, clear roadways, empty the building remaining and plug the roof leaks. About half of the residents including a few of the key business owners in our small community left prior to the storm and never returned. The few who did return were determined to rebuild. The anthem phrase “Stronger than the storm” had not yet been coined by the state’s PR firm, but that was the attitude that all of us shared from the beginning of the cleanup.

I hadn’t even considered whether we might be able to reopen the Money Island Marina and its affiliated businesses in time for the next season. Yet even at that early stage I felt that the natural impulse to rebuild was also the correct business decision.  A small crew of about six residents worked 14 hours a day, 7 days a week, for month after month. We rebuild our cabins, the Money Island Marina facilities and the structures of the small businesses that utilized our small commercial seaport. Now looking back, I wonder if I exercised prudence in supporting the rebuilding of our community. Should I have known that verbal assurances were insufficient when it comes to financial commitment? If I had to do it over again, what should I have done differently?

It is clear now that my attitude and actions were influenced by a stream of statements made on television by Governor Chris Christie and other government officials over the days, weeks and months following the storm. I was engulfed in the stronger than the storm” mindset and I felt like we had government’s support. Our commercial insurance companies were initially cooperative. Claim adjusters from the various agencies spent days analyzing the damage. As the accountant and controller of the business, one of the first things I did was to authorized the use of a $40,000 cash reserve held for property taxes to be used for immediate emergency repairs. It seemed like an obvious choice at the time when we had no basic utilities and still had water coming in through broken roofs. Taxes seemed to be a secondary concern at that moment. At that time, I saw little risk in the strategy. In 30+ years of business, I have always had access to lines of credit well in excess of $40,000. It seemed highly probable that we would eventually be able to replace the tax funds from some other source. That decision turned out to be a big mistake.

Ours is simply a poor rural community. In fact Downe Township is listed as the most rural and one of the poorest areas in the state of New Jersey. Fishing, oystering, crabbing and boat repair are primary occupations of the majority of working residents of Money Island. Many of the workers here don’t have health insurance, 401(k)s, credit cards and retirement plans. One of the waterman in a nearby community recently died without ever having been issued a social security number. They basically run their businesses until they can’t do it anymore and die shortly thereafter. So when it came to funding the Sandy rebuild, financing the project fell largely on my own shoulders. I borrowed money from my retirement account, life insurance and credit cards. Altogether my personal debt totaled $160,000 to rebuild two of the cabins, the docks and the business properties. Everyone was pleased with the results and we get many compliments on the appearance of Money Island Marina today. I wound up with $140,000 personal debt remaining two years after the storm, mostly at 18% interest.

Over the next 18 months I watched every available avenue of funding close its doors on us. The commercial homeowners and flood insurance claims were denied. FEMA did a damage assessment and then advised us that Cumberland County homes and businesses were not eligible for the millions of recovery funds that were directed to the nine wealthier counties Atlantic coast counties. Some NJ government agencies gave verbal assurances that we were approved for recovery funding, but this never materialized. The U.S. Small Business Administration declined our loan request, as it did for 98% of the applicants who applied. The New Jersey Economic Development Authority denied our applications because I was not able to provide the various business owners’ financial records prior to the storm. NJ Sea Grant reversed its preliminary approval of funding for a sanitary pump out station because we now lack commercial liability insurance.

Then we were clobbered by a second wave of even larger problems that took us by complete surprise. Government turned hostile. The DEP Office of Land Use very quickly issued liens on our property in the spring of 2013 for issues that had nothing to do with Sandy issues or the recovery effort. The lien was apparently based on errant information, but that didn’t seem to matter to the state. The state and the township then blocked us from getting any building permits and then fined us $2,000 for repairs made without permits. A state inspector objected to the plans drawn by our professional civil engineer. Then a local official noticed a zoning defect that had apparently existed for decades – having nothing to do with Sandy recovery – and insisted that we address the defect though a lengthy and expensive process before we could receive any building permits. The Cumberland County Department of Health followed this antagonistic pattern a month later by evicting some key watermen who were forced to use garden hoses to supply water to their cabins on an emergency basis while water well was repaired.  The DEP then issued a false report on water quality (implying that the cause of summertime bacteria was local septic systems) and the local township solicitor followed by issuing notifications that the township now plans to foreclosure on tax liens not paid since Sandy.

The only good news is that today the Money Island Marina is stronger and looks better than ever before. Our rebuilt facilities are stronger and more resistant to extreme climate conditions. Business is slowly rebounding. It was a pretty good year for fishing and the oyster industry continues to rebound. (Crabbing was terrible, but that has nothing to do with Sandy; good and bad years are to be expected in commercial crabbing).

Now the dark clouds of financial pressure grow more threatening for the marina community each month. Despite a good track record and excellent credit history of the individual members, I have been unable to find any source of permanent funding for any of the businesses. Potential investors want to be involved but they are scared away by the hostile actions of government. I conclude that unless the marina finds a permanent source of funding soon, we will soon lose all of the properties to a tax lien foreclosure settlement. The marina would then be purchased for use as a private residence and the community would lose public access to the waterway. The commercial fisheries and oyster boats that rely on this port would lose critical docks.

In retrospect, I know that I should not have trusted the verbal assurances of government and the private insurance companies. But should have I considered the possibility that every avenue of funding would be permanently closed? Should I have factored into consideration that business funding is tougher to find than ever before in our country’s recent history? The questions weigh heavily on me and I feel responsible for the welfare of the individuals who relied on my judgment through this difficult period. We continue to work with public and private sources to seek a solution to sustain our community of Money Island as we’ve known and loved it.

3 thoughts on “Rolling back the clock to reconsider a financial mistake: the Sandy recovery saga of Money Island Marina

  1. Sadly, 60% of Sandy aid is still not disbursed. When I speak with lawmakers and their staff (which seems like a daily occurrence lately) I emphasize that is it easy to design aid programs that can say “no”. Any bureaucrat can hide behind program regulations as written to avoid taking any action. It is much tougher and actually takes real leadership to find a way to say “yes”. I don’t see that leadership at any level of NJ government. http://www.nj.com/news/index.ssf/2014/11/nj_sandy_quarterly_report.html

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