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A Business Ponders Whether Its Location Is Perfect, or a Disaster

Pulling Down the Moon provides services like yoga classes, acupuncture, massage therapy and nutritional counseling to women undergoing fertility treatments. Based in Chicago, with satellite locations in Arlington Heights, Ill., and Rockville, Md., the nine-year-old company has grown to 35 employees with $1.3 million in annual revenue.

Flooded streets, Cedar Rapids, Iowa.
AP
Flooded streets, Cedar Rapids, Iowa.

THE CHALLENGE: To continue serving 200 patients after a July 24, 2010, deluge flooded its 1,850-square-foot offices and treatment rooms on the first floor of a repurposed Montgomery Ward warehouse along the Chicago River. The United States Department of Labor has estimated that 40 percent of businesses never reopen after experiencing a disaster. Of those that do, at least 25 percent close again within two years.

THE BACKGROUND: In 2002, Tamara Quinn approached Beth Heller, a fellow yoga instructor, about starting a business. Ms. Heller was surprised; she had been thinking of starting the same kind of business: one offering yoga classes specifically for women going through fertility treatments. While not scientifically linked to higher pregnancy rates, yoga, the founders say, is known to decrease stress and help improve circulation and may therefore enhance fertility.

Ms. Quinn had gotten off the fast track as Midwest ad sales manager for Martha Stewart Living Omnimedia to devote more time to her twins, who had been conceived with the aid of fertility treatments. Ms. Heller, a nutrition researcher who had suffered a stillbirth at 38 weeks, was then undergoing fertility treatments. (She has since given birth to two children.)

The partners opened Pulling Down the Moon — named for a Buddhist meditation — in the Chicago suburb of Wilmette, designing their own six-week series of six 90-minute classes. “Lo and behold, if you build it, they will come,” Ms. Quinn said.

In 2004, the business made a symbiotic move. To make referrals from one of the nation’s largest fertility clinics as easy and convenient as pointing a finger, Ms. Heller and Ms. Quinn relocated their business down the hall from Fertility Centers of Illinois, settling in on the ground level of a landmark building on Chicago’s Riverwalk. The floor-to-ceiling windows framed passing boats and Riverwalk strollers.

A sublease with the fertility clinic at what they considered “really fair market value” seemed just as salubrious to the health of the business — until, that is, seven inches of rain swelled the Chicago River up over the walls of its engineered channel and throughout the clinic and Pulling Down the Moon, both located on the first floor.

When Ms. Quinn and Ms. Heller arrived early on a Saturday morning, ready to mop, they were not terribly alarmed. The water was only about an inch deep. “It wasn’t like on TV, where you see it six feet deep and things are floating,” Ms. Quinn said. “It was like, everything will be O.K. Let’s light some candles, get the aromatherapy going.”

But it was not O.K. The building’s drains and sewers backed up, adding to the inflow of river water. They were told it would take weeks, maybe months, of restoration work. This they knew: They had patients scheduled that day, and they owned a service business that tallied about 60 percent of its revenue from this now-unusable location.

That morning, Ms. Heller called the doctors at an upstairs OB-GYN practice to ask if she could relocate some of Pulling Down the Moon’s operations and classes there temporarily. The upstairs doctors agreed, and yoga classes were held after hours in the reception area, with the furniture pushed aside. Ms. Quinn, meanwhile, e-mailed everyone in her local Women Presidents’ Organization, asking: “Do you know of a space where we can live?”

The business was lucky in other respects. Only one computer was ruined by the flood, and no data was lost because the company had no on-site servers. Patient information and schedules had been saved on the Web by outside providers.

Seven days later, Pulling Down the Moon moved into loft space a half-mile away. Not only was the search for a short-term lease made easier by the recession-fueled glut of commercial real estate, the relocation was smoothed by an operations manual the women had written to make the business scalable — one already road-tested by the opening of the company’s satellite centers.

Similarly, they were well served by having paid sufficient attention to business insurance when they founded the company. A business-interruption rider paid for the move to temporary quarters and reimbursed the ailing company month by month for lost revenue as patient visits slid by as much as 30 percent. Initially, it looked like all restoration costs would be covered by their general liability coverage. But the flood uncovered an overlooked potential downside to subleasing: being beholden to your landlord’s disaster response, as if riding on the rear seat of a bicycle built for two.

Assessing the extensive damage to its quarters, Fertility Centers of Illinois decided the time was right to redesign its space and brought Ms. Heller and Ms. Quinn into the process, which meant moving their subleased quarters. This delayed the build-out and ended up costing Pulling Down the Moon an extra $60,000 because its insurance covered only the restoration of existing walls, not the building of new ones. The owners considered making a permanent move, Ms. Heller said, “but we decided that we have this partnership with the doctors, and it’s a big part of our market strategy.”

It took until mid-January, four and a half months after the flood, for Pulling Down the Moon to return to its Riverwalk home. The symbiotic relationship with the fertility clinic was re-established. Then, six months later, on the eve of the one-year anniversary of the flood, another storm sent water into the first floor of the building. This time the damage was not as bad, and the company was able to stay put while waiting for wallboard replacement and restoration work. But once again, Pulling Down the Moon’s co-owners had to ask patients to put up with inconveniences until repairs were made. And once again, Ms. Heller and Ms. Quinn started asking themselves: Should we stay or should we go?

WHAT OTHERS SAY: Ken Barnett, chief executive of MARS Advertising, a marketing agency based in Southfield, Mich., that lost everything in its 50,000-square-foot headquarters to a 2004 fire: “The karma may be great along the river, the space may be perfect, but the fact is there are enough things in business that you cannot plan for. Why burden yourself with the uncertainty, lying in bed on a stormy night, that your business may not survive?”

Donna Childs, author of a book about disaster preparedness: “The answer to the question of should they move to a new location is to be found in the mission of the business, providing stress-reducing yoga to aid fertility. Disruptions are stressful.”

Frank N. Darras, founding partner ofDarrasLaw, an Ontario, Calif., firm specializing in insurance law, said that “Pulling Down the Moon enjoys 60 percent of its profit from their flagship headquarters location by being strategically located across the hall from the fertility clinic. With rent described as ‘really fair market,’ it’s hard to imagine moving despite two floods.”

He added: “Unlike 77 percent of small-business owners who have never heard of business-interruption insurance, purchased to recover lost profits due to loss of use or access, these smart insurance consumers had the right coverage in place.”

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