The Art Newspaper is reporting the Chelsea art gallery district may be in danger due to the re-drawing of flood hazard zones by FEMA. This will cause the price of insurance to skyrocket, possibly forcing galleries to close or relocate, or pay the increased overhead expenses.
The Art Newspaper reports
Source: The Art NewspaperThe cost of insurance coverage is set to skyrocket. “We are certainly living in a post-Sandy world,” says AXA president and chief executive Christiane Fischer, referring to the superstorm that struck New York at the end of last October. “If you are in a high-risk flood area, it will either be impossible to buy coverage or it will just be really expensive,” she says. “We have not had big storms in the north-east for several years, and now we’ve had two storms in two years [Hurricane Irene in 2011 and Sandy in 2012]. We always thought a certain amount of water could accumulate in Chelsea, but the amount was around twice what we expected after Sandy. We now know that a gallery on 24th Street could get six feet of water above ground.”
She estimates AXA’s insurance claims post-Sandy at around $40m, but total loss could be several times that. “It is a big number—years of art insurance profits will be wiped out. Everyone is paying attention. Of course there will be higher rates.” Fema’s business insurance programme offers little help, as it pays no more than $2,500 per damaged work.
Fema, which is a government agency, recommends that buildings in the flood-hazard area be 11ft above sea level. The real estate broker Faith Hope Consolo, the retail group head at Douglas Elliman, says that some galleries may move to higher floors while others may move out of the neighbourhood altogether.
Down in the flood
“It’s a new reality for galleries,” says Jeff Bailey, whose eponymous gallery was closed for more than two months after Sandy. Gallerist Zach Feuer won’t know how his gallery will be affected “until premiums come up”. In the meantime, he has moved his art storage off-site and uses his ground-floor space for exhibitions only.
The Jack Shainman gallery is “repurposing the downstairs that was for storage for short-term installations and to meet with clients”, says associate director Elisabeth Sann. The gallery has moved much of its art to upstate New York, where it is building an exhibition space. It is also temporarily moving some work to a higher floor of its West 20th Street location.
Most art dealers contacted were unsure what they would do should their insurance policies rise in cost or have a flood-exclusion clause introduced. “I like my space,” Feuer says. “Besides, I have seven or eight years left on my lease.”
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