After the Flood — Final Chapter: 143 Days, and Finally a Settlement!

As regular readers to these pages know by now, on October 10th, 2017 the Red Dragonfly Gallery's physical location suffered severe flooding after a brief freak weather event overwhelmed city storm sewers and flooded the entire "Undertown" shopping arcade where our gallery is located.

The good news is that this will (hopefully!) be the final update on this incident, as we finally received a check for damages and losses from the Washington Cities Insurance Authority on March 2nd!

It had been 143 days since the actual incident.

A Cautionary Tale

We have offered periodic updates in the course of the past almost five months, primarily as a cautionary tale to those who maintain physical locations for their art studios or galleries.

Now that we are finally able to put this event behind us, I can can with great certainty say that nothing is ever as "simple" as you think it might be, and it will almost certain take longer than you expect.

Having a flood on your premises is a devastating and disturbing event, at the best of times. We arrived for work in the morning to find between 8" (20cm) and 18" (50cm) of dirty floodwater in the small shopping arcade we call "home." 

Once you're past the shock, it takes many steps to get back on the road again. And you aren't necessarily thinking straight, at the time.

What we did do right was to immediately start shooting "walk through" film footage (with commentary) of every corner of the premises. That saved us later when we realized we hadn't gotten around to shooting stills of everything we lost, just damaged artwork and most of the electronics. When you're busy trying to "save things," it doesn't occur to you that you should be photographing everything before you move it.

You may believe you're thinking straight, but trust me, you're not!

"It Takes Time, Part I"

It took nine days for our premises to be fully dried out. That meant nine days of being closed; nine days of zero cash flow. 

Maybe that doesn't sound too daunting, but now let us add that you're trying to get your business ready to open again, which means you have to probably buy a whole lot of replacement items — so you've actually got no cash flow and triple your normal expenses or more.

"But what about your insurance?" 

What we learned the hard way is that it's surprising (a) how little insurance actually covers and (b) how slowly it moves. 

Because we live in a somewhat remote area, it was actually 7-8 days before our insurance company had an adjuster on the premises. Maybe that sounds slightly negligent, but I suspect the insurance company knew ahead of time that the claim would be "exempt," so the adjuster's visit was more of a formality than anything.

In fact, we were told that our flood was "probably not a covered loss," long before the adjuster showed up.

The Effect of Interrupted Business

We were able to open the Gallery again after nine days of being closed.

Now, nine days may not sound like an eternity — and it definitely isn't — but the interruption still had a remarkably strong longer term impact. The old "Rule of Ten" is alive and well. 

The Rule of Ten basically theorizes that when something bad happens to a business (like a customer showing up and finding a "closed due to flooding" sign on the door), they will tell ten people, who will tell ten people. Even though our closure was temporary, it took about two months before we stopped having people come by the gallery being "surprised" that we were still open. 

Having been through a similar thing before, many years ago, I was aware that might happen... and we minimized the effect by advertising rather aggressively as soon as we reopened.

At which point we get to revisit the "increased expenses with diminished cash flow" issue. Most small independent art galleries don't sit on a large cash reserve "in case of disasters."

"It Takes Time, Part II:"

In our case, we were fortunate enough that we were able to put in a claim with our local city authorities, on the grounds that there had been negligence on the city's behalf, in terms of maintaining the drains that failed and caused the flooding.

However, this was another case of "you might get compensation, but it will take time."

The thing few businesses realize — and what often causes their demise after a disaster — is that it takes a lot of time to run paperwork through "channels." 

The other thing that becomes apparent is that large insurance funds tend to stall "for this and that" along the way. It's not that they don't intend to pay, and it's not that any one small business' $13,000 claim is "a big deal;" what is actually going on is that if they have maybe 1,000 claims working at any one time, they are earning daily interest on $13 million they haven't yet paid out.

A lot of time passed while we sent various documentation back and forth, researching invoices, getting estimates for painting restoration and so forth.

All of this took ever more time.

Final Release... And THEN?

A few weeks ago, we finally received a final settlement document and waivers, with lots of legalese and required notarized signatures. 

Whereas I certainly can appreciate that these are necessary to protect the insurance fund from "double jeopardy," once again this set another clock ticking. The city insurance adjusters assured us that "once the final claim paperwork was submitted" we could expect payment in "about two weeks."

It was, indeed, just about two weeks... and a little bit more because the Presidents Day holiday didn't count as a "business day."

But we have now received reasonable compensation for our damages and losses resulting from the flood, which means we can finally pay a lot of past due bills and very patient artists who have had their work on consignment, but we fell behind on paying them for sales.

Reprise: A Few Closing Thoughts

I suppose we can say that "all's well that ends well." We did end up getting "fair" compensation, and we ultimately ended up only about $1,000 out-of-pocket as a result of the flood incident. 

On a cautious plus side, we were "forced" to buy some new electronics and equipment, so we have new gear that replaced things that were definitely "well past their prime," before the flood. 

There was also a great deal of "bonding" with our three neighbors in our small shopping arcade, and we're far more actively engaged in helping each other than we were before — including our newly minted "co-op advertising" program.

More than anything, we were helped by our landlord. The quite large 5-story building we're in is the single highest valued property in the county, meaning that our landlord is one of the biggest taxpayers. Which gave him-- and us, by proxy-- a lot of influence in getting "fair treatment" (even if it was slow) for our claims. We were also able to run a month late on paying our rent, without penalties or "nasty grams."

On the not so good side, we work with artists. And most of them are not particularly affluent. So when we suddenly can't pay for work sold until 90 days after the fact, that's also a financial strain on them. Although most were very understanding, we did have a couple decide they wanted "out" once everything gets squared away. Whereas I can appreciate their perspective, it's still sad.

Anyway, this will be my final "journal update" on the flood. Hopefully you have found some of this at least interesting, enlightening or informative.

Thank you for reading! Red Dragonfly is a proud member of the @sndbox creative initiative.

The Red Dragonfly is an independent alternative art gallery located in Port Townsend, WA; showcasing edgy and unique contemporary art & handmade crafts by local and worldwide artists. All images are our own, unless otherwise credited. Where applicable, artist images used with permission.