Saks Fifth Avenue

New Orleans Hurricane Katrina Response (2005 – 2006)

Like the mythical Phoenix, the venerable Saks Fifth Avenue store on Canal Street in downtown New Orleans is rising from the ashes. While much of the city suffered flood and wind damage from Hurricane Katrina, the store avoided those misfortunes only to meet with another disastrous fate: fire damage.

Because the store’s location wasn’t affected by flooding, it was one of many buildings vandalized, looted, and occupied by squatters. However, no part of the city had electricity, so these temporary occupants most likely used candles (three empty candle boxes were later found in a stockroom) to see at night. The candles are believed to have ignited the men’s shoe stockroom, which set off fires that ultimately caused major smoke damage. Of course, the building’s fire suppression systems were inoperable, but the New Orleans Fire Department was able to extinguish the fire, thus saving the store but adding extensive water damage to the mix.

Even worse than the physical damage, the store’s 237 employees were unemployed. But Saks Fifth Avenue, since its inception in 1924, has always striven to take care of its employees—no matter the circumstances. According to Ed Stagman, the company’s senior VP of operations, initially the company was going to cover everyone’s salary for 30 days, but once the extent of the damage was realized, all employees were kept on full salary through December 2005. Every employee was also offered a transfer opportunity to any Saks Incorporated location throughout the United States. (Saks Incorporated, the parent company, has over 45,000 employees nationwide, including over 13,000 Saks Fifth Avenue employees.)

“We also provided full medical and dental benefits and up to $5,000 in relocation expenses per family,” Stagman said. “We offered airplane tickets if needed, and if someone, for instance, was in Destin, Florida and needed to get to Houston, we provided a bus or plane ticket to get them to their loved ones.”

Stagman added that Saks Incorporated had an existing Disaster Relief Fund for its associates, to which employees and vendors across the country added $440,000 in response to Katrina. These funds continue to be distributed as needed to the 237 affected employees to help cover various expenses.

The Scope of the Damage

Although Saks Fifth Avenue’s employees were taken care of, the company still had to determine what to do with its 105,000 square-foot building, which for more than 20 years had been one of its top performing stores in the country. The store missed out on the peak Christmas holiday season, and lost sales were “in the millions,” said Stagman.

Two bays at the northwest corner of the building were significantly damaged, as the temperature of the concrete and reinforcing steel bars is believed to have exceeded 1,100 degrees Fahrenheit during the fire. The structural damage was severe enough to require installation of an emergency temporary shoring system to supplement damaged columns and beams. The most heavily damaged area was the fourth-level reinforced concrete structural slab that serves as a parking area over the retail space.

Finishes throughout the entire third floor had to be demolished due to smoke and water damage. On the first two floors, about 75 percent of all building materials were removed, and the remaining surfaces were cleaned.

There was also substantial damage to the mechanical-electrical-plumbing system. Many of the electrical panels located in the basement got wet and had to be carefully inspected before they could be turned back on. Lights, speakers and receptacles were damaged, and the HVAC duct systems had to be removed.

Water in the elevator and escalator pits had to be pumped out and placed into 55-gallon drums, and more than 4,900 gallons of water were eventually collected—enough to fill about 90 drums. The liquid also had to be tested for proper disposal, because the potent combination of high humidity and no air conditioning resulted in mold throughout the building’s interior.

Project Challenges

To assess the damage, MACTEC sent a hurricane response team to the store as soon as city officials and the National Guard allowed access to that part of the city. Both MACTEC and Saks executives who worked on the project had to overcome numerous logistical hurdles. MACTEC employees were housed in 11 trailers about 35 miles from New Orleans, as there were no hotel rooms available in the city at the time. It took at least two hours to commute one way because of National Guard roadblocks and much of Interstate 10 being underwater. The daily goal was to arrive no later than 8 am, and it was necessary to leave by 6 pm because of the evening curfew. All food and water had to be brought in.

Ed Stagman initially flew to Jackson, MS from the New York City corporate offices. From Jackson, he had a daily 2.5-hour drive each way, including various checkpoints. One of the more harrowing tasks he faced involved removing all the cash, jewelry and furs from the store’s third floor safe. He stopped at Costco to buy two suitcases and then rented a car and two vans. The vans were for the jewelry and furs, and the car was for the suitcases of cash, along with the very nervous Stagman.

“Even though we had a police escort that day, they escorted us only to the edge of the city limits—after that we were on our own,” he said. “There were reports of snipers in the area, but fortunately we didn’t have any problems and made it back safely to Jackson where we made arrangements to have everything shipped to New York.”

Assessment and Implementation

Despite the obstacles, a preliminary damage assessment was done within days, and MACTEC prepared a project manual that included structural, mechanical, and building materials remediation. The project was divided into six key tasks:

I. Fire and water remediation design and bidding services, which included equipment, materials and suggested procedures.

II. Fire and water remediation oversight and management, which included briefing Saks executives each day and observing conditions within the work areas prior to and during remediation activities by the contractor.

III. Structural reconstruction design and management, including…

• Close coordination with the mall owner and Saks management to develop a plan for evaluation of the structural damage, stabilization of the heavily fire-damaged fourth level, and development of repair recommendations.
• Taking core samples (eight to ten inches in diameter) from columns, joists, and slab sections to better evaluate the extent of the concrete damage. Core samples were sent to labs for compression strength testing and petrographic analysis, in accordance with ASTM International standards. (This work was performed by other consultants working directly for mall management.)
• Removing sections of reinforcing steel from the fourth-level damaged slab, which were tested by MACTEC’s Atlanta laboratories for strength and ductility. Once the concrete was cleaned of soot and debris, cracks were mapped, and the limits of damage were refined through the use of sounding techniques.
• Providing a peer review of the drawing specifications and repair plans, which were prepared by the mall’s New Orleans based structural engineer, Morphy Makofsky Incorporated.

IV. Mechanical and electrical system cleanup

V. Environmental water samples, which were collected from the onsite drummed waste. Chemical analysis of each sample for volatile organic compounds helped in selecting the appropriate waste disposal facility.

VI. Indoor air quality (IAQ) assessment prior to building re-occupancy, including assessment of typical IAQ indicators such as carbon monoxide, carbon dioxide, temperature and relative humidity. MACTEC also collected air samples from areas of the store where mold was known to exist. The samples were analyzed by a certified laboratory.

Opening for Business

The environmental remediation work continues, but the Saks Fifth Avenue store is on schedule to open its doors again for business in mid-September of 2006. New Orleans city officials are thrilled the store will once again be the anchor for the Canal Place shopping mall.

“We survived Hurricane Katrina. It has been a long and challenging process, but we look forward to serving our customers again in New Orleans,” Stagman said.