UPDATE: Downtown power outage costs South Bend businesses $3M

SOUTH BEND A new study shows that the commencement weekend power outage in South Bend cost the downtown about $1 million a day.

The study was done by DTSB and puts the total price tag of the –Thursday night through Sunday afternoon—outage at $3 million.

The figure itself is being called the “negative economic impact,” of the outage. “The negative economic impact number would include business losses, lost sales, lost productivity or decreased productivity, lost inventory, things of that nature,” said DTSB Executive Director Aaron Perri. The figure also includes money spent by the City of South Bend on extra police patrols and traffic controls.

Decorating a cake is no piece of cake on any given day. It was even harder on commencement weekend. “Some of our employees brought flash lights, lanterns, to do the decorating,” said Dainty Maid’s Amy Flaherty. “We kind of lost money but we didn’t lose that much because our Notre Dame people did pick their cakes up.”

At the Magnuson Grand, a hotel that was close to being sold out for commencement weekend—was instead forced to close. All 163 rooms were empty from Friday through Sunday afternoon.

“Certainly downtown South Bend has experienced some power outages in the past but nothing to this extent, and certainly it couldn’t have happened on a worse weekend so that $3 million figure had it been on any other weekend might have been quite a bit lower,” said Aaron Perri.

But the study also shows that the damage could have easily doubled had businesses and organizations not taken charge and spent $125,000 out of their own pockets to bring in generators.

“I think it’s safe to say that any business that temporary restored power was profitable that weekend and would not have been had they not been able to restore power,” said Perri. “Now it’s, again, everybody got through this in a pretty remarkable way. Now it’s figure out how to move forward. What went wrong? How do we ensure that really doesn’t happen again and how are businesses able to cope with the losses?”

Perri says that a meeting took place this morning between the business owners and the power company. The search for the cause of the outage continues and Perri says the answer could determine whether or not the power company would be liable to pay any damage claims.

It’s estimated that a Notre Dame Football game brings in about $18 million into the local economy, and that commencement is responsible for about $7 million.

The entire DTSB media release:

The recent power outage in downtown South Bend was disruptive and devastating to the city. With the ultimate goal of framing up important conversations on this topic, Downtown South Bend, Inc. (DTSB) has worked to aggregate the combined economic impact of this recent event.

The following should be noted when referencing these figures:

The data used to estimate the negative economic impact relied on self-reported numbers from a sample representation of businesses affected by the outage.

The submitted data was analyzed and used as a tool to estimate a figure for the entire outage area.

Reported costs included, but were not limited to: lost sales, unrecognized revenue, lost inventory, decreased/lost productivity, and damages to equipment/technology.

No specific data sets or individual submissions from this study will be made public.

Calculations submitted for the purpose of this memo are estimates only and are not to be used as the basis for any future claims that individual organizations may file.

This analysis only considers direct financial consequences and not residual impact, such as damages sustained to the reputation of the community and its enterprises.

DTSB estimates that the recent downtown power outage had a collective negative economic impact of $3 million at a minimum.

In addition, downtown businesses and organizations spent over $125,000 on solutions to restore temporary power and mitigate further losses.

Several of these solutions relied on donated equipment or labor, which prevented this figure from being even larger. It is anticipated that the negative economic impact of the power outage would have doubled without these efforts.

Temporary power solutions and effective emergency protocols not only prevented more substantial economic ramifications but many other potentially adverse situations as well.

DTSB looks forward to continuing to work with the City of South Bend, the business community and I&M to not only recover from this recent event, but to ensure that suitable plans and infrastructure are put in place to prevent these types of incidents in the future.

Finally, any communication on this topic would feel inadequate without highlighting, once again, the remarkable efforts and cooperation from everyone involved in this situation. It gives me great pleasure to work alongside such quality businesses, residents and city officials.

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