While several Orange County companies assess the damage of operations, equipment and property from Hurricane Harvey, others are pulling resources to provide relief for as many as 30,000 displaced residents in southeastern Texas and the Louisiana Gulf Coast.
More than a dozen big employers in the region with headquarters here told the Business Journal last week that they had not reported any deaths among their workforces, though hundreds were forced to flee their homes and seek shelter elsewhere as the storm dumped nearly 52 inches of rain in some areas through Aug. 30, setting a record in the intercontinental U.S.
Irvine-based Taco Bell Corp.’s Employee Hardship Fund is assisting workers who have been affected by the hurricane, which unleashed 130 mph winds and inundated about 20,000 square miles in 72 hours.
Its Spectrum headquarters is organizing a hurricane relief drive to collect essential items, and the Yum Foundation is contributing $100,000 to the American Red Cross and matching employee donations—a dual effort that’s also under way at several other local companies. It also sent a food truck to feed evacuees and emergency responders.
“Many of our restaurants remain closed in the impacted areas, and thankfully we’ve confirmed that all of our employees are accounted for and safe at this time,” the company said in a statement sent to the Business Journal.
Irvine-based Mazda North American Operations closed all eight dealerships in the Houston area. The closures in Conroe near the southern end of the Sam Houston National Forest, and Webster, which is under a curfew along the swamped shores of Clear Lake, are more than 65 miles apart.
“It is too early to estimate vehicle loss,” Mazda spokesperson Carlye Hummel said.
The automaker also closed its Gulf Region office in Houston last week. All of the company’s employees have been accounted for, and those with homes under flood threat are seeing waters subside.
“We continue to closely monitor the needs of all of our employees during this time,” Hummel said.
Mazda Foundation Inc. and Mazda North American Operations are donating $100,000 to the American Red Cross Hurricane Harvey Disaster Relief fund.
Pacific Life Foundation, the charitable arm of financial services firm Pacific Life Insurance Co., provided the same monetary donation and implemented a match program for employees, who raised more than $7,000 in its first day.
Hyundai Motor America in Fountain Valley closed 15 dealerships last week, some inaccessible as waters rose neck-deep. All 43 employees in the region are safe, though the company is still tallying damages and lost vehicles.
“We are gathering this information, and it’s too early to determine the extent of the damage,” spokesperson Michael Stewart said.
The automaker’s Hyundai and Genesis brands have launched disaster relief programs for owners of damaged vehicles from Harvey, which was reclassified as a tropical storm after barraging coastal towns and overflowing reservoirs, leaving more than a quarter of the nation’s fourth-largest city under water.
Several other local companies, including Yogurtland Franchising Inc. in Irvine, Anaheim-based engineering firm Willdan Group Inc. and Santa Ana-based Nekter Juice Bar Inc., had accounted for all their employees in the region and said they were safe.
Nekter closed two stores last week for a few days, but those have reopened with limited hours.
“We are assessing the situation continually and are working on plans to offer our support to our employees and the community,” Chief Executive Steve Schulze said. “It’s a terrible, terrible tragedy, but we are also heartened to see how everyday citizens have come to the rescue to help so many.”
Fitness International LLC, the owner and operator of LA Fitness, closed 19 gyms in Houston and nearby towns, such as Spring and Sugarland, where a Pizza Hut owner and her staff delivered 120 pizzas by kayak to a stranded neighborhood of hungry residents.
Wind gusts and sustained showers damaged homes and business as far as Austin, about 170 miles from where the hurricane first hit the shoreline of Corpus Christi. The lone Texas outpost of Wahoo’s Fish Taco, in New Braunfels, roughly between Austin and San Antonio, had its roof torn off, bar destroyed, and insulation in tatters when employees showed up for work.
“It literally just got thrashed,” founder Wing Lam said.
Assessing damages in the near-term and potential fallout over the coming months has been challenging for several OC companies.
Clean Energy Fuels Corp., the nation’s largest builder and operator of natural-gas fueling stations, with revenue of $384.3 million last year, had two of its nine fueling stations knocked out but were up and running by week’s end, according to spokesperson Jason Johnston.
“Our company has deep roots in the state of Texas, and our thoughts and prayers certainly go out to all who have been affected by this tragic event,” he said.
Clean Energy raised $450 million in 2011 as part of its effort to build “America’s Natural Gas Highway,” a network of natural-gas stations spread out about every 250 miles along major transportation arteries in Texas, California, the Midwest, Southeast and Northeast.
Houston is the world’s largest energy hub, home to thousands of natural gas, petro-chemical, and oil companies, a potentially dangerous mix when natural disasters strike. Two explosions were reported late last week at a chemical plant in Crosby, operated by Arkema Inc., and some officials and scientists believe more are on the way, prompting an evacuation alert for residents within 1.5 miles of the factory.
JPMorgan Chase & Co. in an investor note last week said the insurance industry could lose $10 billion to $20 billion from Harvey-related claims.
Newport Beach-based PacLife, the largest privately held company in OC, with revenue of $9 billion last year, expects little exposure considering its core offerings of annuities, reinsurance and airplane financing far outweigh its fourth business line of life insurance. It doesn’t handle property, auto or casualty insurance, considered the likely bulk of projected claims from Harvey.
“If there are any deaths associated with it, we would be processing those claims,” said Tennyson Oyler, vice president of brand management and public affairs.
At least 44 deaths were attributed to the storm as of late Thursday, a toll that is expected to rise as emergency responders and rescuers initiate a door-to-door search throughout dozens of engulfed neighborhoods.
First Responders
A task force of 45 firefighters from the Orange County Fire Authority has been involved in more than 1,000 rescues. The group, which includes building engineers, a surgeon, and experts in water rescue, hazardous materials and canine search operations, sprang into action more than a week ago under the authorization of President Donald Trump and was one of the first responders on the scene before Harvey made landfall. The president pledged to donate $1 million to Harvey’s victims.
The fleet drove 20 straight hours from OC in a 16-vehicle caravan stacked with four flat-bottom boats, three inflatable Zodiac boats, and enough rations and supplies for 72 hours of self-sufficiency.
“We’re covering as much territory as we can,” said public information officer and Capt. Larry Turtz.
The task force, which includes four firefighters who went to the Gulf during Hurricane Katrina, is part of the Federal Emergency Management Agency run through the Department of Homeland Security.
The group has two command centers, one at Fire Station 21 in downtown Houston and the other on the Katy High School campus, which is doubling as a staging area for newly arriving military troops called to combat the once-in-a-millennium storm.
Turtz, who traveled to the ravaged Gulf in 2005 with the task force for similar missions during Hurricane Katrina, painted a grim reality of the recovery as water recedes.
“I don’t know how many dead they’ve found. There have been some,” he said.
The Orange County Sheriff’s Department has not sent resources to Houston but is ready to assist and respond if requested, Lt. Lane Lagaret told the Business Journal.
Paul Thomson, the owner of wholesale insurance brokerage Scottish American, is among the throngs of everyday citizens pitching in for rescue and recovery efforts.
The company has an office in Santa Ana, the home of parent Scottish American Capital.
Thomson, along with three co-workers from the Dallas area office in Grapevine, are taking a flat-bottom boat to Houston to help stock shelters with diapers, water, soap, socks, toys and other supplies.
“We’ll be going around in our boat and taking supplies and helping however we can, including digging out dirt,” he told employees in an Aug. 30 email. “We figured we’re close enough to help and we had the resources and time to make a difference.”
OC Steps Up
Many OCers are lending a hand in relief efforts, from pet recovery to fundraisers.
Longtime public relations veteran Kelly Reeves, who established Newport Beach-based nonprofit Paw Prints in the Sand Animal Rescue Inc. in 2013, has been directing countless concerned pet lovers to Utah-based Best Friends Animal Society, which sent a disaster response team to Houston, and Livermore-based Wings of Rescue, which had flown nearly 400 pets to safety in four flights as of press time, with another four flights scheduled into the week that will transport an additional 570 dogs and cats across the country, with the ultimate goal of reuniting them with their families or finding new ones.
“I think people here, and I’m sure across the country, feel helpless and not sure what to do or how to help,” she said. “I put together a list for people so they know who to contact to get more information. I know it’s not much, but I hope it helps those who are on the ground there in Houston and other areas.”
It’s a sentiment shared by Rance’s Chicago Pizza co-owners Rance Ruiz and Aaron Tofani, who set up donation centers this week at their Costa Mesa and Long Beach eateries for customers to bring in nonperishable foods, as well as clothes and blankets, in exchange for gift cards.
“It’s time to lend a helping hand to those who need it most,” Ruiz said. “We hope that guests will come in, donate for a good cause, enjoy a Chicago deep-dish pizza, and a cold one.”
Irvine-based In-N-Out Burger has made financial contributions to relief groups and donated its cookout trucks in Dallas to feed evacuees in several areas last week.
“We did feel obligated to help because it’s the right thing to do,” said Vice President of Operations Denny Warnick.
Some of Yogurtland’s Dallas locations have delivered yogurt and water to shelters in the city, where thousands of displaced Texans are stationed, spokesperson Barbara Caruso said. Its Louisiana stores are also taking donations for new clothes, toiletries, books and toys, which will go to the Red Cross.
The Fashion Island and Tustin Marketplace locations of Austin-based Hopdoddy Burger will be among the chain’s 20 U.S. outlets raising funds throughout September for the Hurricane Harvey Relief Fund, which was established by Houston Mayor Sylvester Turner and County Judge Ed Emmett.
The Los Angeles Chargers are finalizing plans beyond a monetary donation that may include sending nonperishable food items, personal hygiene products and bottled water to the hardest hit areas, according to spokesperson Josh Rupprecht.
“This franchise has been on the front lines of a natural disaster in the past (the devastating San Diego wildfires some years back) and knows firsthand how recovery is a process. It doesn’t just happen overnight,” he wrote in an email. “We want to tangibly aid the victims of the flooding in Houston.”
The devastation particularly hits close to home for defensive lineman and Houston native Damion Square, his teammates Russell Okung and Derek Watt, and head coach and Dallas area native Anthony Lynn, who have friends and family in affected regions. Derek Watt is the brother of J.J. Watt, the Houston Texans star who has raised more than $10 million to aid Harvey victims.
All told, the historic flood could cost the region anywhere from $30 billion to $100 billion, according to forecasts. A few sources peg Harvey’s price tag at $190 billion, which would make the storm the costliest natural disaster in U.S. history.
Irvine-based real estate data and analytics provider CoreLogic rated as much as 52% of residential and commercial properties in the Houston metro with a “high” or “moderate” risk of flooding. It estimated that insured property losses for homes and commercial buildings could hit $1 billion to $2 billion and that 232,721 susceptible homes along the Texas coast could carry reconstruction costs to nearly $40 billion.
The latter two projections were made before Hurricane Harvey touched down between Port Aransas and Port O’Connor, Texas.
Hurricane Katrina, by comparison, totaled about $160 billion in economic damages and killed more than 1,830 people, primarily in Louisiana and Mississippi.
Katrina’s wrath wasn’t fueled as much by the hurricane as the failure of the levies, according to OCFA’s Turtz.
“The problem with Harvey is the amount of rain coming down. It’s such a slow-moving storm,” he said. “Normally they come in one day and go out. This is a guest that overstayed its welcome.”
