Reeling and Dealing
THE NEW YORK OBSERVER
October 15, 2001
By Petra Bartosiewicz and James Verini, with Blair Golson
Earlier this month, City Comptroller Alan Hevesi tried to put a number on the economic fallout from the World Trade Center attack, releasing a report that estimated the loss at somewhere between $90 billion and $105 billion over the next two fiscal years. Of that, $45 billion was for the loss of the buildings and the future earnings of thousands of victims, and $45 billion to $60 billion for “ongoing costs.”
But even Mr. Hevesi — who produced his report, in part, as a lever to gain more federal aid more quickly — wasn’t able to identify the full effect being felt on every city block. His spokesman, David Neustadt, explained the problem: “It happens that, on one block, 20 people lost their jobs, so the bodega on that block is in real trouble, whereas on the next block, just out of chance, no one got laid off, so that bodega is O.K.,” Mr. Neustadt said. “How do you identify that? I don’t know, but it’s there.” And so are the stories.
Harvey Weitz’s firm, Schneider, Kleinick, Weitz, Damashek & Shoot, the Cochran Firm (as in Johnnie … ), is located in the Woolworth Building at 233 Broadway, where the physical effects of the World Trade Center’s collapse can be seen and felt every day.
“My office just plain stinks,” said Mr. Weitz, a personal-injury litigator. And that’s with the windows closed.
Overall, conditions are “intolerable,” he said. Until recently, the normally slow elevators were running on makeshift generators. The air-conditioning doesn’t work. Checks coming in couldn’t be deposited because the local Citibank branch was closed. Phone service is still spotty. On Oct. 8, one of Mr. Weitz’s clerks was locked in the file room for two hours, in the dark, when the power suddenly shut off.
And then there’s the stench. Mr. Weitz says he has a perpetual headache, a metallic taste in his mouth and an electrical smell in his nose. Employees with asthma or allergies are miserable. Some have chronic nosebleeds; others wear dust masks at their desks. One secretary had to quit.
But Mr. Weitz called such things “small inconveniences.” What bothers him more is the loss of business: “We’ve lost a month of incoming matters, and we’ll never make up the loss.”
For the two weeks after Sept. 11, Mr. Weitz said, “we were, as a practical matter, out of business.” Since then, the courts and the insurance companies that are so essential to Mr. Weitz’s income have begun to pick up. But it’s slow.
Mr. Weitz, who works on contingency, not billable hours, said he’s had to let go a number of people — clerks and secretaries as well as attorneys.
Yet, he continued, there’s a new wave of business starting to roll in. People affected by the attacks have been calling Schneider, Kleinick “by the dozen,” he said. For now, he’s telling them to wait and see what compensation the government offers. Except for relatives of the plane passengers or people working in the World Trade Center who were told to return to their offices, he said he will probably encourage most clients to take the no-fault compensation and not sue — rare advice from a lawyer in the peronal-injury field for 40 years, he admits.
The Debt Man
“There is a major liquidity problem in the country now,” said Charles Starace, a debt collector. “Companies are looking for money, because they don’t want to have to lay off people. The money we collect means salaries.”
Mr. Starace, 35, who prefers to be called a “recovery specialist,” has worked for the Bilateral Credit Corporation, a collection agency based in midtown Manhattan, for one and a half years. He likes what he does, calling it “the ultimate backstage pass into American business.”
Since Sept 11, the companies he collects for have changed, he said.
“Normally, [our clients] tell us to be soft,” Mr. Starace said. “This month, they have not instructed us to be soft. We’re not going to make a phone call and leave it at that; now we’re hunting down lawyers in the area.”
He said he takes no pleasure in moving from the “soft stuff” — phone calls, letters, offers to create reasonable payment plans — to the “hard stuff” — filing lawsuits, freezing assets, foreclosing on mortgages. But he will if he has to.
Yet it’s apparently not doing much for Bilateral’s bottom line. Mr. Starace estimates that Bilateral is down 25 percent on money collected for the month — at a time when the volume of business coming in has increased. Instead of being assigned 20 to 30 new accounts (or “decks,” as they’re called) each day, ranging in amount from $200 to $150,000 and averaging about $1,500, he’s getting more than 30 new decks a day, often for large amounts of money, he said. But fewer people are paying — and when they do, they pay less.
Mr. Starace’s boss and the company president, Steve Muller, thinks this is because debtors really don’t have the money. And he sees a new dynamic out there.
“Debtors are being more honest, and collectors are becoming more timid,” Mr. Muller said. “They’re realizing that the almighty dollar has no value compared to life.”
But Mr. Starace disagrees. He thinks that most debtors are still avoiding bills for the same old reason — because they think they can get away without paying them.
“If you don’t have the money, O.K., tell me that and we’ll work something out together,” he said. “But you’ve got to tell me that. And don’t ever hang up on me. Oooh, don’t do that.”
The Furniture Saleswoman
In the last few weeks, Melanie Rappaport has spent a lot of time in her office. A district sales rep for Cort Furniture Rental for five years, she has always relished knocking on doors, drumming up new business, taking her portfolio of Cort’s wares wherever she went.
But since Sept. 11, she’s been spending six days a week on the phone with clients who are scrambling to set up new offices.
“I’m usually never here,” she said. “I like being outside better.”
Ms. Rappaport’s biggest client is Bank of America, which had trading floors in the north tower of the World Trade Center. By the end of the day on Sept. 11, she got a furniture “panic call” — the first of many — from Bank of America. Then the Secret Service called. Then FEMA — the Federal Emergency Management Agency, which has overseen the rescue efforts at ground zero.
Ms. Rappaport spent a lot of time on the phone to Cort’s warehouses in Brooklyn and New Jersey, and to suppliers as far off as California, to help her clients. “They were like, ‘We need 1,600 of this, 1,600 of that,'” she said.
As business returns to something like its normal state, Ms. Rappaport would like to get back in the field. But she knows that with tightened security in even the least-celebrated office buildings, this will not be easy.
“You can’t just show up at a building anymore and see who you need to see without an appointment,” she said. “They won’t let you in. Waiting on line at the MetLife Building for 20 minutes? I’m not going to do that.”
The Flower Distributor
On Oct. 1, a memorial service was held at the Cathedral of St. John the Divine for the 80 Windows on the World employees lost in the World Trade Center attack. The flowers adorning the cathedral’s interior — 500 stems of muted blue delphiniums, white hydrangea and sprays of orchids — were a gift from Bianca Jaigla, owner of Banchet Bianca Flower Design. Windows on the World had been Ms. Jaigla’s biggest account.
“We were in there seven days a week. We’re very fortunate our people didn’t get caught in there that day; they were on the way,” said Ms. Jaigla. Of the restaurant’s employees, she said quietly, “They were our good friends.”
Windows on the World also represented approximately 35 percent of her revenue, not including the flowers she regularly provided for private parties held there by Trade Center tenants like Morgan Stanley and Cantor Fitzgerald. All in all, about half of Ms. Jaigla’s business was lost in the collapse of the Twin Towers.
“The day before the attacks, the flowers had come in for Windows on the World,” Ms. Jaigla recalled. “The flower cooler was full.” That day, she said, “we tried to give some of them away. Some we sold. Half of them we just had to throw away.”
The timing of the hit to Ms. Jaigla’s business was particularly inopportune. For 19 years, the Thai-born Ms. Jaigla had worked out of her Chelsea studio, running a word-of-mouth business that catered primarily to high-end clients in the financial industry. Earlier this year, she and her sister, Pisamai, rented out an expensive space in the meatpacking district, stocked it with the biggest flower cooler in New York City and set about launching an exclusive shop, with a room for private parties.
Now, with the shop still a mess of raw beams and drywall, Ms. Jaigla has struggled to keep her business afloat. Two of her staff have already been laid off.
The Nanny Service
“We went for two weeks without the phone ringing,” said Cliff Greenhouse, owner of two nanny agencies. “To add insult to injury, this is our Christmas season: Between Labor Day and Thanksgiving, we normally generate about 50 percent of our business — nannies go off to college, people are making changes in their lives.”
Mr. Greenhouse and his brother, Keith, have run the $2.3 million two-agency business started by their father — Pavillion Agency in Manhattan and the Nanny Authority in Newark — since 1962. For a business that normally receives hundreds of calls a week, the last month has been unsettling.
“I think I’m kind of fortunate that I accommodate a very small percentage of the population, very-high-income people who will always need our services,” he said. Still, “I’m petrified. I’m always hearing from my mom about the Depression.”
In the last few days, demand has started to pick up. Yet, said Mr. Greenhouse, he’s facing another dilemma: nanny flight.
“After Sept. 11, I had at least a dozen nannies saying their parents want them to come back home. What’s worse, the nannies that we’re placing are saying they don’t want to come to New York City … That’s their dream, normally, to work in the city. Now they’re requesting Atlanta, Philadelphia, Maryland, southern New Jersey even — but not close to the city.”
Had the Twin Towers still been standing on Sept. 23, their plaza would have played host to 5,000 cyclists at the start of New York City’s National Multiple Sclerosis Bike Tour. It would have been a big, colorful affair, and, just like last year, it was expected to have added $1.5 million to the society’s coffers.
But the events of Sept. 11 laid waste to those plans. With their rally point in ruins, M.S. tour organizers had to postpone the event until Oct. 14 and move it to Westchester. And while that’s not Siberia, no one expects more than 500 cyclists to show up. That will most likely translate into a loss of more than $1 million in pledges and donations.
“Losing that means we’ll have to consider cutting services,” said Carol Kurzig, the executive director of New York City’s chapter of the National M.S. Society. “We’ll never be able to replace everything we’re losing from this bike tour.”
Crises like Ms. Kurzig’s are endemic across the American nonprofit landscape. Donations that would normally go to any number of charitable causes are now flowing into W.T.C.-related funds. In addition, direct-mail solicitations are largely going unanswered if they’re not for World Trade Center victims.
But there’s also a great deal of anecdotal evidence to suggest that donors simply haven’t been given the opportunity to give: In the aftermath of Sept. 11, so many fall fund-raising events — typically the year’s most lucrative — have been canceled that perspective donors have gone untapped.
Like the M.S. bike tour.
“We cannot regenerate the momentum that we had for the World Trade Center ride. Everybody’s all thrown off-base,” said Ted Beyda, who was on track to be this year’s top fund-raiser. “It’s difficult to get people restarted. Now we’re stuck betwixt and between.”