N.Y.C. Contractors Still Recovering

September 11, 2006
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Although the pain will never go away, the impact of the 9/11 terrorist attacks on New York City and Washington D.C. have not defeated the entrepreneurial spirit of the HVACR trade. Contractors and distributors have stepped beyond the shock and horror and put their lives and businesses back in order.

In the days following the attacks, The NEWS spoke with some businesses that had been directly and indirectly affected. The story appeared in the Sept. 24, 2001, issue of The NEWS. Five years later, the people involved in that story - as well as others - are speaking about the impact of 9/11 and how they have moved forward despite the huge obstacles created by the attacks.

In the days after the collapse of the twin towers, a firefighter (top) surveys the remaining shell and debris of the World Trade Center. The World Trade Center Memorial (above), scheduled to open on Sept. 11, 2009, consists of two voids that reside in the original footprints of the twin towers surrounded by a forest of oak trees. (Click on the memorial image for an enlarged view.)

Fortunately, through their efforts and the efforts of the American Red Cross, victims of the attacks and their families have also moved forward.

Following the death of Norma Khan, member services manager for the Plumbing-Heating-Cooling Contractors - National Association (PHCC), during the attack on the Pentagon in Washington D.C., the PHCC established a scholarship fund for 13-year-old Imran Khan, the son of Norma Khan.

PHCC is in the process of transferring to Imran Khan close to $160,000 for his education. "Imran reached his 18th birthday in April of this year," said D. L. "Ike" Casey, PHCC executive vice president. "He will be attending a four-year college near his present home in Orlando, Fla. He moved to Orlando to be under the guardianship of his uncle after the loss of his mother."

The American Red Cross established the Liberty Fund, created as a separate, segregated account to provide assistance to individuals and families most affected by the tragedies. The Liberty Fund received nearly $1.1 billion. Subsequently, the Liberty Fund has provided over $1 billion in financial, material, physical, and emotional relief to more than 59,000 families in all 50 states, five U.S. territories, and 62 foreign countries. The latest March 2006 report on expenditures is shown in Figures 1 and 2.

OTHER CONTRACTORS RELIVE THE CHANGES

The contractor possibly suffering the biggest impact of the World Trade Center collapse was BP Air Conditioning Corp., a New York City mechanical service contractor. BP lost two service technicians who were working in Tower 1 of the World Trade Center during the attacks. Jack Fanneron, BP vice president, said there are still reminders around the company of the fallen co-workers. Pictures still hang in the dispatch office.

BP installed a plaque on their building, dedicated to all of the victims of 9/11. There is a plaque at the union hall where the service technicians were members, memorializing them and one other union worker who died on 9/11.

Fanneron said his company has lost touch with the family of one of the victims, but has hired the cousin of another who will be starting an apprenticeship program this fall. Beyond the loss of life, Fanneron talked about the impact the attacks had on his and other New York City-area businesses.

"Most of our clients have relocated to other areas," he said. "We are still waiting for the new World Trade center project to take off. In fact, the whole industry is waiting while politics hold up the work.

"We sucked wind for three years. Businesses relocated and refocused and the work on our books had just stopped. For the first two years no one would rent down there. Once the cleanup was done, there was still a lot of anxiety to relocate.

"Security was crippling for a few years. You used to be able to walk into a building and visit who you wanted. The labor costs are tremendous now due to the security involved. You have to get passes to visit every floor and business. At first the security was welcomed, then it was a pain in the neck, and now people have accepted it as a way of doing business."

Figure 1. The total dollar amount of Liberty Fund expenditures from its March 31, 2006 report. (Click on the chart for an enlarged view.)

Fanneron said that the residential market eventually began to grow and it was soon followed by business relocation. He said that the cost of business insurance after the attacks often doubled and tripled, likely putting some small contractors out of business. But the pace has accelerated lately.

"There is a hunger down here," he said. "People are excited. Now we are very busy - the whole city is busy."

John Ottaviano, co-owner of Air Ideal in Mineola, N.Y., said his company was fortunate not to lose any workers in the attacks, although he attributed the non-fatal heart attack of his project manager directly to the stress brought on by the events.

"I knew two people who lost their lives on 9/11," he said. "One was the father of my son's friend. He was the president of one of the financial companies on one of the highest floors. The family was devastated, but he had made sure that they were well cared for through estate planning. His wife has since remarried and my son's friend seems to have adjusted to life with a stepfather and will be heading off to college soon.

"Another friend was a wife and a mother who was an insurance actuarial with AON on the 102nd floor. Since her death, her husband has struggled raising three young children and working. Fortunately, his sister was there to help him care for and raise the children."

Ottaviano said that while the World Trade Center site has become a tourist attraction, there has been little done to rebuild. "I think that tourists have been going to gawk for five years in search of some feeling of connection to this great tragedy, as opposed to New Yorkers who have tried to get by it and move on with their lives.

"In business, there really isn't any significant construction work going on downtown. It was obviously our hope that a swift redevelopment would occur to rebuild lower Manhattan from the ashes like a phoenix and that this would create a booming commercial construction economy centered in the area. This would in turn become a magnet for all of the big contractors who have had to bottom feed in the meantime, giving back the middle market to smaller contractors. That hasn't been the case though."

Figure 2. The percentage breakdown of disbursements from Liberty Fund expenditures through March 2006. (Click on the chart for an enlarged view.)

But like BP Air Conditioning, Air Ideal is staying busy and Ottaviano is optimistic. "We have managed to slowly increase our revenue, even in the wake of slowed commercial construction," he said. "We have remained relatively busy throughout the last five years. It is my opinion that revenue growth has primarily been the byproduct of the astronomical increase in construction material costs, which have been passed on to consumers in the form of higher contract prices."

Brian Hughes, of Hughes Environmental Engineering in nearby Montvale, N.J., said that his company played a small role in the aftermath of 9/11, delivering a couple of reach-in freezers to ground zero for the American Red Cross to store food for the rescue workers. "But it was at the end of September and rescue had already turned to recovery at that point," said Hughes. "The American Red Cross called the following spring and asked us to pick the freezers up. We said they could keep them but they did not want to have the burden of relocating them or disposing of them."

Hughes said the mood the past few years has been cautiously positive but added that it would be wrong to say that people have put the event completely behind them. "Doing business in New York City, particularly Manhattan, has permanently changed," he said. "The days when a service technician could walk into a building with his tool bucket and go right to the seventh floor to begin a service call are over. Now it's standard practice to check in with security, show picture ID, and get announced upstairs. Many buildings will check a technician's tools, open boxes, and give him extra attention if he carries in a B-tank or refrigerant jug. The work is the same, but the logistics, especially parking, are much more difficult."

Hughes added that there has been an uptick in business since 9/11, as many corporations are investing in suburban back-up locations in case of another disaster.

"Case in point," he said, "Hughes has a maintenance contract on a data center in Brooklyn that is completely unoccupied. The place is empty, yet they pay us to maintain the a/c. Its sole purpose is to be a back-up site for a Manhattan operation, and they have the ability to switch their entire network over to Brooklyn with the touch of one button, and instantly have 50 people re-routed to work there the next day in case of a disaster in lower Manhattan."

He noted that another affect on the HVACR trade is that it is a little harder to attract service technicians to work for contractors that service New York City accounts. "I know for a fact that there are suburban service technicians out there that have dismissed Hughes as a prospective employer because they don't want that occasional service call in New York City."

Fortunately, according to Hughes, most technicians that live in the surrounding areas recognize that servicing New York City accounts are part of life in the commercial HVACR business.

A plaque memorializing fallen BP Air Conditioning workers Felix Calixte and Angelo Sereno, killed during the collapse of the World Trade Center towers, is displayed prominently on BP's New York building. (Click on the photo for an enlarged view.)

DISTRIBUTOR'S PERSPECTIVE

Michael Senter, CEO of ABCO Refrigeration Supply and a member of The NEWS' Distributor Consultant Panel, said his company was deeply affected by the 9/11 tragedy.

"In the immediate aftermath of 9/11, business in New York slowed dramatically, with HVACR contractors solely engaged in service work, clean up, and repair work as opposed to new construction work which is so essential to the lifeblood of New York HVACR contractors," Senter said. "In many ways, it is hard to believe it has been five years since the attack on the World Trade Center.

"When we drive by the site or meet the widow or widower of one of the victims of 9/11, it seems immediate and it is easy to recall the events of 9/11 as though they had occurred yesterday. This must be a feeling the rest of the country feels when it sees a movie or television special about 9/11, but we in metropolitan New York have this feeling on a regular basis."

Senter said that New Yorkers are very resilient and determined more than ever to stand tall in the face of terror and to build and rebuild in terror's wake. He noted that within the industry, refrigeration and air conditioning contractors and HVACR distributors have continued to participate in healthy competition, which is essential to the economy. "But there is a civility and a remembrance as well that didn't have such a presence prior to 9/11," he said. "All of us also have noticed in our travels in connection with national organizations like HARDI, ACCA and MCA, that the rest of the country feels a greater camaraderie with New York; a feeling of teamwork that didn't exist so substantially before 9/11."

Senter said that business began to turn upward for area contractors and distributors when real estate activity picked up about a year after the attacks. He noted that the lowering of interest rates had a tremendously positive effect on the economy throughout the nation, adding, "but definitely in metropolitan New York City, where investment in building new residential high-rise buildings and in remodeling commercial buildings to house support businesses skyrocketed - businesses like new restaurants and markets to service the influx of individual and corporate investment in residential real estate throughout New York."

The buzz has returned to the daily routine of doing business in and around New York City. But for now, the empty space where the World Trade Center once stood still continues to be a reminder of the work that is still to come for the HVACR community.

Publication date: 09/11/2006

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