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RECOVERY-FLOOD 2008(impact on your facilities, business and community)

Connie Chapman, RPA, Iowa Broker Regional Director of ManagementRyan Companies US, Inc.

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Meet Our Presenter:Connie Chapman, RPA, Iowa BrokerRegional Director of ManagementCommercial Real Estate Ryan Companies US, Inc. - Midwest Region

Introduction, background and information on Ryan Companies

Regional Director-18 team members for Midwest Region (Iowa, Illinois, Wisconsin)1.4 million sf of commercial real estate; facility, commercial and maintenance management: multi-tenant/single office, medical, shopping center, transportation center, museum, entertainment venue, R&D, and land under developmentYears in real estate 25 yearsby accident; started as a temp job; prior included retail management JCPRyan Companiesfamily company, Mnpls based, 75 years old this year, commercial real estate development, construction and property management.Office in Mnpls, Iowa, Wisconsin, Illinois, Texas, Florida and Arizona. 700 employees; 180 in real estate management11 million sf under management

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Learning ObjectivesImpact of a natural disaster on Cedar Rapids

Preparations by facility-property management team and Community on properties

What went well, not well and what to do differently

What does Cedar Rapids look like 5 Years into Recovery

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CEDAR RAPIDS

Every day view of Downtown Cedar Rapids.Population 120,000 residents (CR) another 30,000 immediate surrounding suburbsSplit by the Red Cedar Riverwest/east with an Island (houses City/County government)Compare to Paris (island)Typical water levels in the 3 (low) to 8 feet;Downtown on east side; Quaker Oats (plant) to North; New Bo to South-point out areas.Sides connected by 7 bridges4 downtown (Hwy 380)Last major flooding was 1993general low areas flooded (streets, parks) along river and water/sewer back-ups due to saturation of the ground (April-July 1993). Never went over the banks.Getting ready for the perfect storm in 2008.record snows to the north, monsoon type rains, urban spread in communities, run off from fields into small streams into rivers.

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FLOOD 2008

On Friday, June 13th.here is what downtown Cedar Rapids looked like!

31 + feet under waterleft only 1 bridge open for vehicles (hwy) as the community watched for 4 days until we could reenter the areas safely to begin cleaned.

PersonallyI watched live video on the TV day/nightto the point, I am sure I was in shock and my husband turned off the TV. To this dayI still can not believe this is what the city looked like then.and fast forward to 2008it looks like the previous slide with many new buildings and improvements.

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8Facts1,126 city blocks impacted-561 block severely damaged-estimated 14% of the city flood-majority in the downtown-business areas/neighborhoods18,623 persons live in flood impacted areas1,360 jobs lost45 day cares damaged1800 elementary students displaced423 boat rescues310 City facilities (buildings, ramps, parks) floodedZero deaths5390 residential, 1049 commercial, 84 industrial, 51 agricultural, 486 tax-exempt (gov, church) 138 other (utilities, railroad) impacted properties.3 out of 4 collector wells disabledfought hard to keep 4th upcity water50,000+ tons of debris collected and sent to landfill (reopened)who knows how much went down the river.Estimated damageearly on was $500+ million

9Talk about the pictures.

Residential neighborhoods looked like a warn zone

Downtown.

A&W neighborhood.now demoed 2 weeks ago after a failed attempt to restore

10Talk about volunteers and sandbagging efforts

City governmentflooding on island

County jail evacuation sent 150+ prisoners to other prisons/jails in Eastern Iowa

Downtown streetscape

Quaker Oatsbeen the core of downtown since late for 100+ years

11Downtown Cedar Rapidspicture says it all

History of Flooding in Cedar Rapids

Topography Impacts

Weather Conditions

What Happened Leading Up to the BIG Day of June 12, 2008

Background

12Now you have seen the results of the Flood of 2008.

Here is what lead up to the FloodHistory of floodingTopography impactsWeather conditionsWhat happening lead up to the big day of June 12-13th.12th was the day we all knew this was going to be historical; 13th is when the waters crested

History of flooding in Cedar Rapids

13HistoryUntil 2008, the worst floods were 1851, 1929 *this picture, and 1966.

Close calls in 1993 with water levels up/down the last few yearsSpringtime-July has people watching the river closely since 1993.

Currently the water level of the river (2013) is around 3drought with recent rains has raised it very little.

How a river can rise and fall so fast causes a lot of questions

Flood 2008 worst national disaster in Iowa

FEMA has listed Flood 2008 as 6th largest disaster based on financial public assistance; could be bumped with recent floods (TN and CO).

Topography impacts

14This picture show how the flood waters invaded the community, specifically the downtown area. Point out the GAB buildingwhere I work/manage .

While areas along the river are in the 100 year flood plan; the outer areas were in 500 year flood plan. The Flood went outside of the 500 year flood plan!

Westsideconsists of parks, industrial areas, affordable housing older neighborhoods, historical Czech villagesome berms for low level flood protection. Have problems with storm/sewer back ups with minor flooding/rain.

Eastsideconsists of central business district, industrial, historical New Bo, some berms for minor protection..generally higher than Westside, so impact in minor flooding is very minor-drain/street issue.

North of townurban sprawl, parks, undeveloped land, farms/fieldsrun-off; streams feed into the river.

Weather conditions

15Weather conditionsRecord snow falls winter 2008in Iowa and north (Minnesota);

Ground saturation

A monsoon type weather pattern late Springlooked live above. June 2ndthe rains were non-stop as shown.

I headed to Mnpls early in the weekdriving through heavy rains, farm fields flooded all the way to Mnpls. It looked like troublebut I had no idea what was in store later that weekwhen I bailed out of corporate training on Thursday when I kept getting calls from my maintenance team.

Communication

Supplies

All call for volunteers

Sandbagging

River level monitoring

Evacuation plans

What happened leading up to the BIG day of June 12, 2008

16CommunicationsNot much happened until 6 days before floodbusiness as usual; monitoring river levels-rain; normal spring timemid-weekno relief in rain, predictions river levelslots of chatter Trulymost people were thinking there maybe a bit of extra waterso those who normally prepare, prepared; others thought about it more.City/County/Federal were all in line of being impactedthus busy with their own issues.Formal communication 12-13thget out and evacuateCity.As a building operator; prepared as in past; talked to our tenants; monitor news/city communication.

Suppliesscrambling for hundreds of miles for sand/sandbags; best people could do.

River level monitoringtook on a new twist. Website crashing

Evacuation called for on Friday, June 13 at 149PMfor everyone in the 500 year flood plain; people in 100 were already preparing for the worse the day before.

Supplies, Volunteers and Sandbagging

17City had lots of sand and sand bagsbut not enough; Pumps mobilized in low areas; Extra water among other food runs going on at grocery stores; Looking for more plastic, barriers; setting up barriers. Property owners were soon on their own.

All call for volunteers went out the the community to help anywherebusiness let employees volunteer; schools, family, friends. Helpful to work for a construction companyadded personnel.

Sandbaggingdidn'tt know if would be futile, but it went onagain, thinking just a little flood water in majority of areas. We called in resources from Omaha to Minneapolis for additional sandbagseven handed out neighbor bldgs who had no idea what to do or resources;

River Monitoring and Evacuation

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This slide was and continues to be our key monitoring source for river levelsnorth, south, west, east and right outside our office building location.

The main river gauge downtown CR broke Wed June 10..thus uncertain on how high the river was going to get and when. Pretty much that told everyonethis is going to be VERY bad!

EvacuationStated mandatory Evacuate 149PM-Wednesday June 10th 500 yr flood plainCRAZY;

Set up shelter in schools-one had to move due to higher river levels;American Red Cross mobilized;

National guard called (150 soldiers) in and set up to stop people from entering flooded areas and help with evacuation.

yes, some arrests; all happened from June 8-12; 13th-out.

GreatAmerica Building

19Personal storyGreatAmerica Building140,000 SF multi-tenant office building; 2 parking lots and no basement.-Ryan Companies built

Owner-out of state with partners near CR (also flood impacted)

Had Federal Flood insurance ($500K max) and no excess floodOnly building with a formal Flood Plainrequired by code at the time the building was built.

Review and discuss the plain each April; inventory supplies; didn'tt think much about it.

Since 1997 the only water from the river has been a tiny bit in the storm sewers out in the lot. Have put plugs in floor drains and few sand bags around lot drainsas much of the plain we have needed to do to date.

Prepping, Sandbagging and Communication at the GAB

20Tell personnel storyon the GABOut of town, call from maintenance supervisorthe river is not looking goodPut the plan into place-just like we reviewed, but this time we are not the only onesSandbagging-getting materials a challenge; Omaha/Des Moines-trying to purchaseCall for volunteersemployees, tenants, people just walking by, friends, familiesPrepared the building and tenants for a wet floor..stuff up on the desksCity not helpinghad their own problems, plus worked to help residentialSent staff to Town Centrecheck the pits there (had a flood pump) to help themCommunications by staff on-site on what they could find out, give them some guidance..walk thin line on telling what to do.I communicated via email/phonein Mnpls; finally said I have to go homeVisual checks of the river/banksknew we were in trouble if levels got to 23City/Chamber/Countydealing with other issuesevery person was helping and doing what they couldAlliant (electric company) on 3rd floordisaster group; kept updated as they received other information.3 of plastic; sandbags around entrances; floor drains pluggedonce done, we knew this was not going to be enough.

21Exterior picture of the flood protectionper the flood plain3 high

22More flood protectionon 3 sides of the building-river side, no protectionhad a built up berm (small) thus a bit higher

23Prep work involvedFlood plan-including taking elevator up to 2nd floor and just what you see in pic.Threat of losing building systems-called vendors (mech, elev, electricians) to survey equipment-serial/model numbers, makes, etcOur own companys office was going to be put out of commission (4th floor)-how will we operate our construction and other property management assignments? Communication? Computers? Phones?, files?...wait, we are only going to have wet carpet on first floor-so we will be open in 1 day. (Not what happened). No one took anything with them.Kept monitoring different news sourcesand helping tenants and others where we could.Againthe carpet is doing to get wet, maybe a little morebut not 8 of water into the building for 2-3 days.

Annual review Flood plan and inventory of suppliesTenant communication about Flood and other Spring weather conditionsAnnual review of Flood insurance policy(s)Monitor River levels starting March 1st on http://www.water.weather.gov

Annual Property preparations

24The above preparation stepsare what we do every year prior to the Flood, with the exception now we have added excess flood insurance policy to review.

THE PROPERTY GOES DARK 1015 PM THURSDAY JUNE 12, 2008

25Thenthe city went dark

CLEAN UP BEGINS.

26On Monday, June 16thlimited access to the property; National Guard was still keeping a tight rein on who could get into the areas.

I had been contacted by our cleaning company about a contractor who could help clean up the propertyfrom out of state (many were starting to arrive). Over the weekend, we discussed and signed up to start as soon as the City opened downtown back up.

WATER LINE 8

27The first floor had 8 of water..with only 1 cracked pane of glass; overhead door blew open due to pressure; River had changed its courseyou would see the impact to the landscaping.Left from rivermud (lots of it), trash, debris, dead fish, dirty (contaminated) ground/water.As soon as we got clearance, the disaster mucking contractor started in on first floor.Tuesday, June17th, we set up for tenants to reenter in afternoonstairwells, dark, humid, flashlights, light sticks and escorts to get to offices; remove what they could carry (many had not back up to serverscomputers/servers came out).SURPRISEwater leaking up on 5th floorran up stairsmultiple floors; Liebert unit did not shut off (valve)..upper water damage on 4 floors! Nowmore problems.Had a real estate team of 2 come from Mnpls..to help with other business (Maintenance) and start auditing leases for termination, force majeure, rent abatement and other language. Made list of contacts for tenants for potential temp offices.

VIDEO

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Who would have thoughtKeeping the team togetherand operating portfolioEmotional toil at work, home, employees, familiesDisplaced property management/construction officeSupplies for operationsTenant displacement, temp space, leases, clean upCommunication challengesInsurance companiesOut of state clean up companiesOwner and partnersCity and County at a standstillDocumentation

Challenges of keeping our business operating while handling a restoration project-communications, equipment, long hoursPeople were stressedas impact of flood was far reaching into extended family/friends; some citizens didnt get it cuz they were not impacted.We had to regroup on where to operatesplit up our team; construction was all over town working on restoration.Work with tenants to find temp spaces, how to clean up their spaces, haul away their contents, deal with lease language impact-no cashNo powerbatteries were going down; had to email tenants at home emails since some servers were not up; websites to communicate; city communications impacted how we were doing businessInsurance companiesslow to respond (our opinion); put an adjustor on site who challenged after it was done; caused delays and emotionsCompanies who do clean upwork force challenges, licensing challenges, documentation and billing challengesOwner had partners (also impacted)all 9 decided to show up and try to take over. Angst among the group.lots of $$ and stressCity/Countyhad to get their operation set up (distress mall)thus weeks for them to get it togetherDocumentationdont think you will forget, but you willlawsuits 2 years laterbetter have files.29

RESTORATION 2008

WATER LINE 8

Restoration work started immediatelyclean up, mucking, demo, project manager/costs/contracts, hiring/firing contractors licensing, out of state inspectors, owner shock, on-site job trailer, tenant needs to reenter to get more items, lease/rent communication, ,environmental testing, lawyersLots of emotions and unrealistic expectations.Businesses moving to new locations (temp)some handled better than others.Everyday was something newoverall cost $3M to clean up and restore the first floor and lots, landscapingbuilding a new building from inside out!Took 7 weeksall except the last week without electricity. 2nd building to open up downtown CR-first was the Electric company.

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As the building was cleaned uprestoration work began

All new interiors (with exception of the granite flooring) were in process. Didnt realize how you could forget where things needed to go once restoredblue prints destroyed; fortunately, we had extras up in penthouse.

Generator lifted out for restoration workfuel contaminated the siteor other sites.31

Exterior of the building with generators and air moving machinesto dry it out

Insurance would not pay for dehumidifiersbig ones; things got sticky with insurance adjustor about 3 weeks into the projectlots of miscommunication with contractors; the owner just said get it donewill deal with them later (lawsuit in the making).

At one point, the ownership wanted flags on the building to show we are strong and going to get through thisnot waiting for anyone.

Upper water damage restoration challenges32

Interior lobby shots as it was put back together.

All granite was removed from the walllike a jig-saw puzzle approximately 2000 pieces, put on pallets, cleaned/sanitized in the parking lot piece by piece, then reinstalled.

All mechanical rooms replaced with most equipmentpiping stayed in place. Restrooms restored; revamped tenant spaces on 1st floor-one tenant chose to put some people on 2nd floor; Owner paid for all restoration even though it was not his fault. One tenant had medical records and was caught up with attorneys trying to figure out what to do with fileswe moved their stuff to parking lot and told them to deal with it cuz they were holding up restoration.

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Post restorationLobby34

Lessons learnedAnything can happen and will happenAnnual review floor plan and monitoring of riverInventory check of equipment lists and suppliesBe prepared to document dailyReview of flood insurance with owner and agentOwner signs all contracts for service

Be prepared for anythingproperty management is about solving problems; prepping and be agile. Some people dont like that we ask the hard questions.

Annual review of the flood planor make a flood plan (many more exist today); tenants (existing and new) will be asking questions; monitor the river and communicate to staff, management, owner and tenantsthey can all monitor too.

Documentationif you have a disaster, there is no many moving pieces; find a method to document daily (maybe 2-3 times). Have files, save emails and voicemails. Voice recording device is most efficient.

Review annually the flood insurance with the owner/management and their agentdo not assume it is in place. Important for you to know what their expectations are and how to handle/report/document.

Have the owner sign all contractsespecially for clean up and construction. Might save on the finger pointing and arguing over how they will be billedit got ugly.35

Lessons learnedVendor relationships matterTenant demands and site visitsHave waivers for re-entry written by attorney

Regularly update property files and leases to keep off site (CD, hard copies, memory stick)Ask for Help

Know who your allies arenational contractor for waste was not helpful; went local and they were there with what we needed; rewarded them with giving them the day to day contract.

Tenants can be demandingtheir business is at risk; they will want access to everything, make multiple visits, stress about reentering and progressbe patient and listen. Be honest and have open communication. Website was greatupdated every couple of days, had pics, answered phones 24/7, made visits to their temp locations.

When your office and storage is impacted..whether on first floor or not..be ready to take files with you; make electronic copies of information; dont assume your server will be accessibleor your corporate office is prepared. Larger businesses may have better plansbut small businesses may not.

Ask for helpfrom other co-workers in other locationshelp keep your business running while dealing with the damaged property. Call your City officials or other organizations who are helping find volunteers, paid help, housing and even financial assistance.36

Monitor organizations such as FEMA, State, County, City websitesSign up for alert servicesLessons learned

Be active in organizations such as SafeGuard Iowa Partnership, Chamber, Rebuilding organizationsMultiple bids for clean up and restoration

Spend time monitoring prior to a flood, during restoration and recoveryand post activities. One examplecity/state came up with funding sources to help property owners recover some of their loses..involved extra paperwork, copies of invoices, pictures and more paperworkchanged regularly. Never know what programs are out there for assistance. Advocate for your ownerand your tenants.Sign up for alert services through your local emergency management offices and our city even has onecomes through email, text messages or voicemails.Take an active role in organizations that assist with educating and helping you and others with emergency preparedness.Warningif I had to do it all over again, I would not push on signing up a cleaning contractorsingle source of frustration. With bankers, insurance adjustor and ownersI would get them into one room in advance and have them agree to a plan and who will be doing the work. Lots of animosity about outsiders coming inalthough the community was in shock and unable to respond for awhile.37

Update building equipment lists annuallyBusiness continuity plans and discussionsLessons learned

Involve community in recoveryBe prepared for the unexpectedCelebrate milestones

Keep your building records updatedequipment including model numbers, serial numbers, makes, vendors who have other records annually. If you have electronic work order systemgood place to keep, but having a hard copy off site might come in handy. Rememberwe had no power, cell phone batteries ran down (stores had no back stock) among other issuespaper copies came in handy.Dont be afraid to talk about how you will keep your business operating in case of a flood etc. I find the management groupsmart peoplecouldnt believe it was happening and not really sure what to do. We did a great job helping others, but not so good helping ourselves.Acknowledge there was a disasterpeople lost jobs, homes, businesses closed, properties were destroyed, kids were displaced from schools, possessions were forever lotsbecome involved in your community during this timeif you can help, then do and get others to rally. Be prepared for the unexpectedthere are bumps, emotions, scam artists, red tape that goes on for yearsCelebrate the milestonesreopening of the GABput welcome back gifts (little floatees with candy in them); community had 5K flood run the next year going through impacted areas; put up We are open for business banners, among others.38

Personal Stories About How Flood 2008Impacted Their Properties and BusinessesFrank Rainbolt Jr. United Fire Group, Inc.

Introduce Frank Rainbolttell us a story about your flood experience.39

Signs of Progress 5 Year LaterOver $1Billion dollars laterNew Federal Courthouse $120MNew Cedar Rapids Library $50MNew Double Tree Hotel, Convention Centre, Arena $130MNew (relocated) National Czech Museum $16.8MNew Human Services Campus $14MNew Outdoor Amphitheatre $7.1MNew City Services Building $36MNew Central Fire Station $20MRestored Ground Transportation Centre $10.5MRestored City Hall $10MRestored Theatre Cedar Rapids $8MRestored Paramount Theatre $33MRestored Vets Memorial Building $20MAnd many more

Here is a list of buildings and their restoration costsin 2008 (5 years later) we are almost at the end of this work.Private buildings were quicker to get back openPublic buildings were slowerpublic money, FEMA and just trying to operate; hired Ryan Companies to CMA many of the City projects; couldn'tt do it all internally.Some buildings went back to the bank..one building cost $3M+ to clean it upfirst floor plus basementsmade it very expensive. Lawsuit, fire-sale and restoration.Flood did clean up some of the blighted areasand moved restoration work in and around the downtown that would not have happened. Helpful when money is there from FEMA, Ijobs, insurance and other capital campaigns.New building designs have changedparking on first floorand office above; moving of building systems up to upper floors; not practical for many existing buildings.

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Future ProtectionFlood Wall Protection PlanArmy Corp of EngineersEast side vs. West sideCosts $$$Timeline In the meantime

Whats next for Cedar Rapids? How about a FLOOD WALL?Lots of political issuesmainly the Army Corp of Engineers.West side damage doesnt meet their formula for $1 lost for $1 to build a wall.East side meets their formulaPlans are in processbut 5 years post flood, still not activity. Combination of permanent wall,temp walls, pumping stations, berms and more green space (where houses have been demoed)Community didnt support additional taxing for the west side; City trying to figure out how to fund.Cost estimated at $116M (East) and $175M (West). Tentative start date to building is 20179 years post flood; will take 2-3 years to complete.82% of the businesses flood impacted have reopened (national average is 55%).City bought 300+ properties; demoes over 1700 structures; buy-outs were offered, not all people took them.Good information on flood or other disaster planning and recovery can be found on the following websites: FEMA, Safeguard Iowa and Weather.gov.

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City of Cedar RapidsCedar Rapids GazetteRyan Companies Inc. Real Estate and Construction TeamCedar Rapids Economic AllianceIFMA Eastern Iowa Chapter Members

THANK YOU TO FOLLOWING FOR PROVIDING INFORMATION AND PICTURES

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QUESTION/ANSWERS43