Destructive floods showed resilience of local businesses
When floods ravaged southern Alberta in 2013, about four in 10 Calgary businesses were affected, some suffering millions in damage. But while more than 99 per cent of local businesses affected by flooding reopened, risks remain.
Geoff Last didn’t comprehend the magnitude of the flood damage done to his company’s wine store in Mission until he waded through thigh-deep water in the parking lot.
Opening up the back door of Bin 905 on 4th Street S.W., a stew of water and muck — from the swollen Elbow River and sewer backup — gushed out.
“I was still expecting to see maybe six inches of water on the floor,” recalls the store’s general manager, five years after the massive flood caused an estimated $6 billion in damage across southern Alberta.
“We got the back door open and it all came through. It looked like the hull of the Titanic in there.”
Down the street, the owner of Wurst Restaurant and Beer Hall was uncertain what he’d find inside his business.
The beer hall in the basement was filled with water, like a giant swimming pool. A cooler was capsized, floating in the murk.
“When we looked in, we just couldn’t believe it. Tears. Tears,” says owner Dominic Caracciolo. “We couldn’t believe the destruction.”
Several blocks away in Victoria Park, the moment of dread for Krista Hopfauf came just before she entered her store, Rewind Consignment Clothing.
Without any insurance, her business was hanging in the balance.
“Before I opened the door to assess the damage, up until that point I thought, I’m ruined,” she says of her store at 10th Avenue and Macleod Trail S.E.
“It’s almost like you can’t breathe for a few seconds … You just think everything is going to be gone and you won’t survive.”
Water flooded the basement of the building. Many of her products were unrecognizable.
But her store — now called SalvEdge Boutique — survived, as did Bin 905, Wurst and more than 4,000 businesses in Calgary forced to temporarily close after the June 2013 event.
The disaster forced more than 100,000 people from their homes. It also left thousands of entrepreneurs across southern Alberta, and their employees, facing an uncertain future.
Business operators are used to dealing with the normal financial risks of buying and selling products, meeting payroll and trying to turn a profit.
Grappling with a natural disaster that leaves freezers bobbing in sewer water isn’t taught in business textbooks.
But they quickly learned lessons about being resilient, the dedication of their employees and community, the necessity of planning on the fly, and navigating unforeseen events that can derail a business in an instant.
“What it taught me was when you’re thinking about business, don’t ever underestimate the unexpected, because it could happen,” said Caracciolo, whose business was closed for six months amid a $2.5-million rebuild — a hefty price-tag covered by insurance.
Once the water dissipated, the recovery efforts in the city were followed by a gruelling two-year economic recession after oil prices collapsed.
Being forced to close for months also meant some entrepreneurs had to reconstruct their customer base.
“We basically started over,” said Last of Bin 905, which closed for eight months as the wine, spirits and craft ale store was entirely rebuilt.
“You have to re-establish yourself. That took about three years to really get back.”
Hopfauf, who owns two local clothing stores, relocated to a temporary location while her building was being repaired, before moving back in November 2013.
“Imagine starting up and your basic revenue doesn’t pay for your cost,” she says. “It’s like starting over again.”
The financial impact of the flood on businesses, employees and the entire Alberta economy was far-reaching.
According to a provincial report, about 300,000 Albertans lost more than five million hours of work because of the natural disaster. The fallout cost the province almost $500 million of lost economic output.
And the report didn’t factor in the massive property damage caused by the flooding, which ravaged communities such as High River.
In Calgary, businesses in the downtown, Victoria Park, Inglewood, Mission and Kensington neighbourhoods were forced to close — some for a few days, others for months.
One of the city’s largest tourism draws, the Calgary Zoo, was closed for 40 days, losing a reported $10 million in revenue.
The Calgary Chamber of Commerce pegs the total economic impact on the city’s economy at more than $200 million. A survey of its members found four in 10 were affected, reporting lost sales or offices being closed.
Yet, the disaster also demonstrated the resiliency of employers and employees.
The chamber reports more than 99 per cent of local businesses affected by flooding in the city reopened.
The raging rivers and pounding rain also highlighted some broader challenges for the business community.
A civic study released this spring found only 42 per cent of local businesses report having a continuity plan ready in case of an emergency or disruption, down from 53 per cent in 2015.
“We were seriously concerned in the 2013 flood that there was the realistic possibility of losing thousands of businesses and tens of thousands of jobs,” says Scott Crockatt of the chamber.
“Here we sit five years later and in some ways Calgary has advantages, were a situation like this to happen again, but in many ways we still have a number of disadvantages.”
On the plus side of the ledger, the city and province gained unparalleled experience in flood response and recovery operations.
Tom Sampson, chief of the Calgary Emergency Management Agency, points out the chamber now has a seat inside the city’s emergency centre when disasters unfold, improving communication to businesses.
“As long as we can get them good information, they can make good decisions,” he said Wednesday.
But business leaders remain worried little progress has been made on upstream flood mitigation and “the Calgary downtown business core remains today virtually as exposed as it was in 2013 to a similar flood,” Crockatt said.
Mayor Naheed Nenshi said Wednesday $150 million has been committed to flood-prevention projects around Calgary, and those efforts will reduce the risk of flooding by a third.
Yet, upstream mitigation projects must be built, he stressed.
“If we were to lose downtown Calgary for more than a couple of days, the consequences to the entire country would be incalculable,” he said. “It’s incredibly important that we are protecting the core of the city from all angles.”
Business leaders say they found out after the flood there were several provincial and federal disaster programs aimed at individuals, but little available for companies without income. Programs the province later rolled out to businesses were under-subscribed.
“It was very slow, very cumbersome,” said Adam Legge, former chamber CEO and now a director at the University of Calgary’s Haskayne School of Business.
“It just took way too long; they weren’t prepared and they put up so many barriers.”
As five years have gone by without major flooding, business groups fear the political imperative to invest money in flood prevention will fade.
Complacency also worries Steve Allan, chair of Calgary Economic Development. He points out in 2013, the city’s economy was booming, yet the flood hurt businesses that shut down for weeks.
“The key point that everyone has been missing — at least there hasn’t been a loud enough voice — is the risk to our economy,” says Allan, who had to rebuild his home after the disaster.
“If we have another flood with 27 per cent vacancy rate in the downtown area, another event of the magnitude of 2013, it would be a killer for our economy.”
Businesses that were forced to close for months say they’ve taken steps to be better equipped and prepared, should another disaster hit.
Hopfauf points out she now spends $350 a month in insurance to protect her stores against flooding, as well as the potential loss of income.
“Once you’ve lived something like that, you’re just a little better prepared mentally,” she added.
“If you can get through that, you can get through some of the other smaller day-to-day things in a business. Not many people have to go through a major natural disaster and be able to recover from it.”