The whirlpool that sucked water through a largely forgotten tunnel into the basements of Chicago`s business district also created a financial undertow that will siphon off hundreds of millions of dollars in sales and profits.
The losses go far beyond the property damage, which will be substantial.
As thousands of Loop workers left for home early Monday, boxes of clothes and appliances in store basements were becoming waterlogged, hotel rooms were emptying out, banks were unable to process transactions and potential travelers to the city were changing their plans.
For every 100,000 workers who were sent home, downtown business would lose $80 million to $106 million, said Samuel R. Mitchell, president of the Chicagoland Chamber of Commerce. State employment records indicate that more than 200,000 people work in the flood-impacted downtown area south and east of the Chicago River north of Adams Street.
If by Tuesday the work stoppages are confined to the hardest-hit area between Adams and Washington Streets, which contain 50,000 workers, the direct economic impact should be down to $40 million to $53 million per day, Mitchell said.
Mitchell was handicapped in his attempts to keep track of developments Tuesday because his office is at 200 N. LaSalle St. ”Even though we weren`t taking any water, they notified us that they were shutting off the power. I`ve been working out of my pocket ever since.”
A retail analyst estimated the stores on or near State Street would lose a total of $1 million to $1.5 million for each day they are closed due to the flooding.
Marshall Field & Co., Carson Pirie Scott & Co. and Filene`s Basement were forced to close Monday.
The flooding may have done its worst damage at Filene`s, one of the newest retailers on State Street, leaving it partially under water and without power.
Two levels under the store`s main selling floor were flooded Monday morning. Filene`s general manager Janis Okerfelt said this is where the stock for the main selling floor is stored.
”The water hasn`t reached the selling floor yet, and we`re hoping that it doesn`t, but there`s plenty of water on the stock floors.”
Across the street, Roberto Nassiri was closing up his shop.
”There`s no (flood) water in the store, but I can`t operate in the dark,” said Nassiri, who owns Roberto`s men`s clothing store.
Nassiri estimated he would lose at least $1,000 in expected sales Monday because of the closing.
”I hope we can open tomorrow,” Nassiri said. ”I can`t think of anyone who can afford to be closed right now.”
The basement storage area of Field`s downtown store was also underwater, said spokeswoman Sue Sorensen.
Carsons spokesman Ed Carroll said the flood affected all three lower levels of the State Street store. The boiler room is on the first level, some stock is on the second level, and the Corporate Level selling floor is on the third level.
”The lower levels of the store have been affected by the floodwater big time,” said Carroll, senior vice president of marketing. ”There is water on each of the three levels.”
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Carroll was unable to assess how much damage had been caused to store equipment or merchandise as a result of the flood.
Some of the city`s largest banks were forced to shut their doors Monday because of power outages or flooding in their own basements.
Citibank, Harris Trust & Savings Bank and LaSalle National Bank closed their main offices, but officials said the banks were able to continue processing checks and automatic teller transactions from other sites.
Even banks that remained open faced massive disruptions, operating under emergency plans and losing customers as downtown was evacuated. None of the local institutions was willing to make a dollar estimate on losses due to the flooding.
Illinois Banking Commissioner Robert Piel issued an emergency proclamation allowing banks affected by the flooding to close without incurring legal liability for delays in check processing or wire transfers. It was not certain how many banks had suspended operations Monday.
The Federal Reserve Bank of Chicago continued clearing checks for Midwestern banks from its 230 S. LaSalle St. headquarters despite some flooding in lower levels. A spokeswoman said the bank has a backup generator above the water line, so it should be able to continue operations even if flooding worsens Tuesday.
Harrison Tempest, chairman of the parent company for LaSalle National, said the bank probably would not be able to reopen its headquarters at 120 S. LaSalle St. by Tuesday because floodwaters had risen above the building`s pumps. But the bank hoped to have its offices at 135 S. LaSalle St. open.
LaSalle National lost only ”about an hour” in its foreign currency and other trading operations before resuming them at its computer center near O`Hare International Airport.
Earlier in the day, security guards at Harris Trust moved cash, securities and records from subterranean vaults to a special vault above the water line. That vault normally houses only safety deposit boxes.
By midday, Harris had sent employees home and closed its 311 W. Monroe St. check processing center but set up an alternative operation. A
spokeswoman, citing security reasons, would not disclose the new site.
Citibank shut down its telephone banking service and mortgage service office, said a spokeswoman. A number of Loop branches were evacuated for safety reasons along with Citibank`s headquarters in Chicago.
Officials at Harris and Citibank said they anticipated reopening their main offices on Tuesday.
First Chicago, the city`s largest bank, was largely unaffected by the flood because its headquarters building is not connected to the tunnel system and lies just outside the area affected by the power outage.
Customer traffic at the One First Chicago Center office was nonetheless off by 30 percent, and one executive said little work was being accomplished as bankers gathered around radios for news of the flood.
First Chicago did fly a team of specialists to London to supplement its traders there in case its main Chicago trading floor was disrupted. Two Loop branches were shut when Commonwealth Edison turned off power to them.
Continental Bank stayed open through the day despite flooding in a sub-basement but sent non-essential employees home. A spokesman said he believed the bank would be open again Tuesday.
Hugh Strawn, director of catastrophe services for the Property Loss Research Bureau of the Alliance of American Insurers, said, ”This event has caused a tremendous economic loss. We`re talking multimillion dollars, but it is far too early to put a specific figure on it.” He added, ”It would be hard to pick any other six ZIP codes, unless in midtown Manhattan, where such a catastrophe would cause so much economic disruption.”
For some businesses there were economic positives.
One was the Hyatt Regency Chicago Hotel, which took in guests who had to leave hotels such as the Palmer House and the Executive House, and workers who elected to stay downtown overnight.
”We are extending a convenience rate of $49 for those people,” said spokeswoman Nancy Ruth. The hotel`s standard rate is $205.
The Chicago Hilton and Towers filled 300 rooms with guests moved from its sister hotel, the Palmer House, which was evacuated.
Hugh Harper, manager of the new Sheridan Chicago Hotel and Towers at Columbus Drive and the Chicago River, 301 E. North Water St., said the hotel`s meeting rooms were quickly booked Monday to accommodate changes in business meeting sites.
Businesses of all types scrambled to maintain communications, as did the City of Chicago.
Leader Communications, a unit of Cellular One, received calls for a hundred cellular phones from the mayor`s office and from the Chicago Mercantile Exchange.
”The mayor`s office wanted to be able to communicate privately and without the congestion that comes with two-way radios,” said Robert Holliday, manager of Leader`s branch at 170 W. Ontario St.
Gerald Roper, president of the Chicago Convention and Tourism Bureau, said things were bad, but they could have been worse.
”I can only assume that people who were going to come in for corporate meetings will probably use the telephone and the fax until this calms down,” he said.
The fact that the flood occurred during the week of religious observances before Easter was, in a sense, a godsend, said Roper.
But the week before Easter is an important time for State Street retailers. Many of them never opened Monday, or shut down after their power was cut off before noon.
Monday`s shutdown of the Loop sent ripples through suburbs that will be felt for days.
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Suburban office managers at banks, brokerage houses and other corporations were busy fielding phone calls and setting up desks and computers for their displaced Chicago workers.
Nicky Bank, branch manager at the Shearson Lehman Hutton brokerage firm`s Northbrook office, said judging by the phone calls he received Monday, dozens of Loop workers will be operating out of suburban offices in Northbrook, Barrington and Flossmoor on Tuesday.
Many ”have called to reserve desks for tomorrow,” Bank said.
Said Don Linse, who works for Prudential Bache Securities in Orland Park: ”The plan to move people out to the suburbs from downtown is being looked into, but nothing is really formal about any of the talks. I guess it depends whether the mattress (one suggestion for plugging the leak at the river was to use mattresses) is holding or not.”