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Manhattan Blackout

Hurricane Sandy damages a major medical center. American Appraisal provides much-needed asset management expertise during disaster recovery.

 

On October 29, 2012, Hurricane Sandy struck New York City, causing widespread damage to properties throughout the region including a 13-day blackout of lower Manhattan. Among the damaged properties was a major medical center, with operations encompassing healthcare and medical research. The facility suffered extensive damages and losses to property, mechanical systems, equipment and materials. All of its operations were impacted, with substantial business interruptions and significant costs to repair, replace, and remediate.

The devastation placed immense demands on the medical center and its fixed asset, finance and accounting resources. Post-superstorm, its tasks consisted of assessing all of the damages, arranging for disposal of affected fixed assets and an insurance appraisal of affected personal property, and tracking of fixed assets as departments moved to available spaces during disaster recovery. The medical center also needed to update its fixed asset management policies, and account for fixed assets acquired via FEMA remediation and risk mitigation funds, as well as fixed assets acquired through normal capital expenditures. 

American Appraisal was ready to assist. Our fixed asset management practice has served healthcare and higher education facilities throughout the United States for more than 50 years and 7,000 engagements. We have extensive fixed asset management experience related to some of the most devastating natural disasters including Hurricanes Katrina and Ivan. In addition, our global insurance valuation team comprises more than 100 seasoned professionals who annually value insurable property aggregating hundreds of billions of dollars.

American Appraisal immediately committed 15 of its most experienced consultants, implementing a fixed asset management strategy that blended day-to-day fixed asset management and the resource-intensive requirements of fixed asset management under disaster recovery.

We isolated all property affected by the storm and assessed damages. During our review of the client’s policy and procedures, we incorporated the addition of a fixed asset subledger for all disaster remediation and risk management, along with regular monthly capital activity. This separate subledger was critical in tracking all capital expenditures, both regular and remediation- and risk mitigation-related.

Once all damages were assessed, we recorded losses and write-downs and conducted an independent insurance appraisal of all damaged personal property, which formed the basis of the client’s insurance reimbursement. We kept the property schedule updated, recording all departmental moves as new spaces were leased almost daily to assist the client in reestablishing its operations. We tracked all updates to the fixed asset ledgers, pre- and post-inventory, and followed up on equipment affected by the moves. The client received continuous progress updates throughout the process.

American Appraisal’s efficient, comprehensive fixed asset management strategy assisted the client in receiving funding from FEMA for remediation and risk mitigation – to date, the client has received the highest level of FEMA funding of all the nonprofit organizations affected by Hurricane Sandy. In addition, the client met and passed its fiscal year, calendar year, and A-133 audits, and has updated its fixed asset management policies to mitigate the impact of any future natural disasters.

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