Andrew Leaves Behind Bills In The Billions

A Ryder rental truck sits amid the debris of a shattered strip mall south of Miami. Frances Blackwelder and her family troop between the truck and their ravaged furniture store, salvaging what they can. Blackwelder had started the business in 1978 with her husband, who died six months ago. Now, Hurricane Andrew has slammed her with $400,000 worth of inventory losses. Still, she plans to reopen once the insurance money comes through. "It means starting over," she says, holding back tears. "We started on a shoestring, and that's what we're going to have to do again."

In Dade County, Fla., starting over was the order of the day, as residents and business owners began cleaning up after the hurricane that crashed through South Florida on Aug. 24, packing the strongest winds to pound the area since 1926. By Aug. 26, Andrew's death toll stood at 14, and Dade County Emergency Management officials pegged Florida damages as high as $15 billion to $20 billion. Insurers, who may cover less than half that total, are looking at claims that may well outstrip the $4.2 billion paid out after Hurricane Hugo battered Charleston, S.C., in 1989.

To those in Morgan City, La., where Andrew made its second landfall in the early morning hours of Aug. 26, the damage was equally devastating, although dollar losses there won't come near those in Florida. The storm skirted the New Orleans area, home to half of the state's 4 million citizens. "If An-drew had hit New Orleans, we would be talking devastation," says William H. Walker Jr., president of Howard, Weil, Labouisse, Friedrichs Inc., a New Orleans investment bank. "Louisiana's economy has been severely bruised, but no massive internalinjuries."

For the many oil refineries and drilling-rig operators along the Gulf Coast, Andrew was almost business as usual. "We get a hurricane outage several times a year," says John Sauer, chief energy economist at Conoco Inc. "You would not see the shutdown on the bottom line. The big economic issue is if operations get damaged, and I have not heard of any damage with Andrew."

Insurers weren't so lucky. They suffered $3.7 billion in catastrophe losses in the first half of 1992, thanks to the Los Angeles riots, California earthquakes, and Midwestern tornadoes. Andrew's trail of damage guarantees that property-casualty payouts will hit a record high this year. Even grizzled hurricane veterans were stunned. "I haven't seen anything like this in my life," says Florida Insurance Commissioner Thomas Gallagher. "It's like someone put a nuclear bomb off in south Dade."

HOMELESS. The "bomb" blasted the region with winds of 140 mph. In southern Dade County, which took the brunt of the storm, Andrew leveled the communities of Homestead and Florida City and destroyed Homestead Air Force Base. Winds wiped out entire subdivisions and middle-class developments, leaving 50,000 homeless in south Dade alone.

Many residents will be jobless for some time. Tricycles and kitchen sinks were strewn about the parking lot of a shattered Toys 'R' Us in south Dade. Burger King Corp.'s headquarters sustained so much damage the company set up temporary quarters in trailers and told all but essential personnel to stay home. "It's like a swath was cut out of that area 30 to 40 miles wide," says Florida Governor Lawton Chiles after touring the area. President Bush wasted no time pledging $50 million in federal disaster aid and the support of 27 government agencies. He also declared Louisiana eligible for disaster relief.

Two days after the storm, some businesses, such as Carnival Cruise Lines Inc., were open and urging employees to return to work. But the situation was far from normal for hundreds of ether Dade County businesses left without electricity and air conditioning.

The travails--if not the response--of one big local employer, Ryder Systems Inc., were typical. Its headquarters in northwest Dade suffered little damage, but on Aug. 26, it was still without power. A skeleton crew of 200 of Ryder's 1,200 local employees got two emergency generators working, opened the credit union to cash checks and make emergency loans, and donated dozens of yellow Ryder trucks to relief agencies. Chairman Anthony Burns, who is also chairman of the Dade County United Way, says the immediate losses to Ryder are bearable. "There will be a cost, but in the total scheme of things, it's minuscule," he says. His own home was destroyed.

Meanwhile, some small-business owners are wondering if they'll ever reopen. Paul Lusardi, owner of Submarine King on U.S. 1 in south Dade, laments that the plywood he painstakingly nailed onto his windows did little good. Insurance will cover the interior, but the exterior is the landlord's responsibility. "We might start up again, but probably not for a month," he says, surveying the damage. "It's probably a good time to remodel."

Andrew's winds were only part of what was worrying Manny Williams, owner of Twin Power Cycles, which sells and fixes motorcycle parts. Spending the night of the hurricane with two pit bulls and two M-16 rifles in his uninsured shop, he made no bones about how he would deal with looters. Hand-lettered signs declared: "You loot, we shoot." He had fired warning shots when looters lurked nearby shortly after the storm.

Some Florida City businesses made a gift of food and supplies. Convenience store Starvin' Marvin gave away $25,000 worth of food, soft drinks, and cleaning wares on Aug. 25. "We call it controlled looting," says Marvin Smith, an executive with the store's parent, Emro Marketing Corp. in Enon, Ohio.

Yet Andrew's winds blew good for some, particularly south Florida's beleaguered construction industry. Centex Rooney Construction Co., the largest general contractor in Florida, is awash in new business. "The amount of work ahead could be a couple of years' worth of residential reconstruction," says Vice-President Larry Casey, "and a year's worth of commercial reconstruction."

FAST SALES. Disaster also means a windfall for other south Florida businesses. Comfort Suites & Quality Suites, a 208-room hotel in Deerfield Beach, 75 miles north of the hurricane area, was 100% full on Aug. 26. This is usually the slow season for area hoteliers, but the inn is packed with relief workers and insurance adjusters. In a nearby Home Depot, Assistant Manager Garon Ingram is busy selling generators. "We got in a truckload of 40 of them and they were gone in 30 minutes," he says.

To other merchants, the extra business is just a heartache. Says Debbie Chisholm, owner of Arctic Ice in Deerfield Beach: "I have people fighting in the parking lot, and I have no ice. People have been so mean all day because they think we have it and we just don't want to give it to them. I would like to just close up for the following week."

That's not really an option for Chisholm or the other merchants in South Florida. Instead, most will take some time to survey the wreckage, heave a big sigh, and set about the long, slow business of starting over.

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