For all its romance, running a restaurant is an unforgiving business, particularly in New York.
But over the past three years, Noah and Rae Bernamoff of Mile End Delicatessen managed to beat the odds.
By last fall, their tiny food empire – numbering two small restaurants, a catering operation, and a nearly launched online store – appeared on the brink of much bigger things.
No entrepreneur could have expected what came next. When Hurricane Sandy swept into New York late on Oct. 29, it flooded the warehouse where the couple had set up a separate kitchen facility to supply their growing venture.
Inside, the destruction was near total. Everything not bolted down had been tossed like dice by the surging water. Two large ovens that together cost $80,000 (U.S.) were wrecked. A three-week supply of food – meats, vegetables, lentils and spices worth about $45,000 – was flung across the floor. A sludgy mix of grease and sewage coated the deck and walls.
When Mr. Bernamoff, a Montreal native, discovered the damage early the next morning, he was despondent. He told his investors and partners he didn’t think anything was salvageable. He considered abandoning the facility and putting it into bankruptcy.
Later that night, he wrote on his restaurant’s Twitter feed: “Home now. Crying myself to sleep.”
The ruin inside Mr. Bernamoff’s space represents a minute fraction of the estimated $50-billion in economic losses and property damage caused by Sandy.
But it points to a less noticed aspect of the storm’s fury – its effect on small businesses. In New York, more than 13,000 such businesses were in neighbourhoods severely impacted by flooding, according to city estimates.
For a small minority of those businesses, the hurricane was a blow from which they will not recover, forcing them to close. The rest are dealing with debates with landlords, unpaid bills from vendors, weeks of lost revenue, and costly repairs only partially covered by insurance.
For the Bernamoffs, the last two months have been an exercise in triage.
To survive, they pared back operations and fired staff. They worked for weeks in the cold and dark to clean the kitchen facility, filling three dumpsters with spoiled food and wreckage. They don’t know whether they can afford to rebuild there or if they want to.
And instead of dreaming of expansion, they face the uncertain task of regenerating the business that used to be.
“Now we have to basically rethink our entire future,” said Mr. Bernamoff, 30. “We’re just trying to hold on, to keep what we have running.”
In Red Hook, the waterfront neighbourhood in Brooklyn where Mr. Bernamoff set up his kitchen facility, the main street is dotted with an unusually high number of pickup trucks. Small businesses are hard at work on physical repairs; rebuilding their sales could take far longer. Many retail businesses missed their best months of the year, the holiday season, and are reopening during the slowest period saddled with new debts.
“I’m afraid that we’re going to see, six months or 18 months from now, businesses that just never quite made it back again,” said Monica Byrne, the co-owner of home/made, a Red Hook restaurant. Ms. Byrne helped spearhead an effort, Restore Red Hook, to raise money for small businesses in the area. It has distributed $200,000 in $4,000 increments, which is welcome, but nowhere near what businesses need, Ms. Byrne said.
For Noah and Rae Bernamoff, Red Hook – scrappy but hip, popular with artists and entrepreneurs – was an ideal place to root their expanding business. They found a 6,400-square-foot space in a Civil War-era warehouse on a pier jutting out into New York harbour. To one side is a perfect view of the Statue of Liberty. It was a “really unique space to go to work every day,” said Ms. Bernamoff, 28.
The couple met as students at McGill University; he was the local kid, and she was an out-of-towner from New York. Mr. Bernamoff later attended law school, which he detested. Together with another friend, they developed what would become Mile End, which Mr. Bernamoff calls a “modern Jewish deli.”
Located in downtown Brooklyn, the restaurant opened in early 2010 and immediately endeared itself to customers, who thronged the 25-seat space for a taste of its smoked-meat sandwiches, chicken soup and poutine. Earlier this year, the couple opened a second outpost in downtown Manhattan. In September, they released an acclaimed cookbook.
Underpinning it all was the kitchen facility, which started operations back in April. It produced, from scratch, smoked meats, pickles, breads and baked goods for the restaurants. But it was also an investment in the future, built to supply catering and online sales. Mr. Bernamoff declined to reveal exactly how much it cost to outfit the space, but said the figure ran to several hundred thousand dollars.
When they signed the lease in 2011, they didn’t seriously explore flood insurance. It isn’t clear whether such protection was impossible for renters – the entire neighbourhood is considered a flood plain – or simply prohibitively expensive. Their landlord, who had owned the property for 30 years, said that it had never flooded in that time.
A little while after midnight on Oct. 30, it was their landlord who delivered the bad news: The warehouse was submerged by the surging storm waters, and he was working with emergency personnel to rescue his father, trapped nearby in his truck by the flood. Mr. Bernamoff said he spent the next five hours awake in bed, staring at the ceiling.
Arriving at the pier at 6 a.m., he saw a boat stranded in the middle of a nearby street. Inside was worse. The surge had risen through every nook, cranny and drain to a height of more than a metre, toppling heavy equipment and causing an industrial-sized grease trap and sewage tank to overflow.
By earlier this month, the facility – repeatedly hosed down, cleaned with de-greaser and detergent, and blasted with bleach – had the look of a half-finished, if orderly, construction site. For Mr. Bernamoff, negotiations lay ahead: with his landlord, to whom he had not paid rent since the storm, and with vendors owed payment. There were questions, too, whether to rebuild or to move to higher ground. Both options would involve money.
“Literally every option is still on the table, except bankruptcy,” Mr. Bernamoff said.
While the business wasn’t covered for flood-related damage, it did have insurance against losses suffered due to a power outage – something which occurred before the water swept in. The insurer is still processing the claim, which Mr. Bernamoff estimates will produce a payment of $85,000 in the best case scenario.
He said that city and federal government programs to aid small businesses in Sandy’s wake – emergency low-interest loans for anywhere from $25,000 to $2-million – are out of reach, since the fledgling facility is too new to provide the necessary paperwork. With just eight months in operation, “we haven’t even filed a tax return,” Mr. Bernamoff said.
A spokesperson for New York said the city had approved 200 small businesses for loans totalling more than $4.6-million as part of Sandy relief efforts. At the federal level, the U.S. Small Business Administration has approved roughly $14.3-million in disaster loans for 133 businesses in the city, according to a spokesman.
At Mile End, the flagship restaurant now operates on a reduced schedule with a more limited menu that features higher prices. But earlier this week it held its third annual “traditional” Jewish Christmas feast – Chinese food. Nearly every available seat over three straight days was sold out.
Regulars came in droves for the special event. Many asked Mr. Bernamoff how things were going in Red Hook.
He demurred. “Can’t we just focus on how delicious the food is right now?” he said.