South Beach restaurant denied flood claim after city raised street

Nov. 17--Miami Beach has spent tens of millions raising streets in the low-lying Sunset Harbour neighborhood to prevent rising tides from flooding the area.

That left some establishments a few feet down at a lower sidewalk level. Unknown to their owners, their businesses are also at a level not usually seen in South Florida: the basement.

That's what an insurance adjuster decided was the new status of a restaurant at the low corner of 18th Street and Purdy Avenue. Because basements are below ground level, Allstate is saying federal flood coverage doesn't apply to a restaurant that claims it had $15,000 worth of damage after recent torrential rains.

While city leaders have touted the dry street during king tides during the past two years, showing off dry streets on days where coastal flooding inundated other parts of South Florida, they may not have realized the unintended consequence of raising the road.

Restaurateur Antonio Gallo is dealing with it firsthand. The owner of Sardinia Enoteca Restaurant filed an insurance claim after water sloshed into his business when the city failed to turn on anti-flooding pumps during a heavy thunderstorm that swept through during high tide on the night of Oct. 3. With only one of six pumps working, the heavy rain overwhelmed the drainage system and backed up into businesses.

The estimated $15,000 in damages in Sardinia -- tables, chairs, equipment in the back -- are not covered by Gallo's National Flood Insurance Policy, according to a letter he received from Allstate.

"It doesn't make sense that we're a basement just because the city raised the road," Gallo said on Wednesday.

Gallo is appealing the decision, but his problem raises the question of how the insurance industry will respond to sea level rise and the measures being taken to keep roads above water. Ten businesses lie below the street level on the block hugged by Purdy Avenue and 20th Street.

The work in Sunset Harbour is one portion of a $400 million plan to install 80 pumps and raise roads in low parts of the city to safeguard the city from rising sea levels.

An owner's National Flood Insurance Policy is offered through private insurance companies, like Allstate. In a statement Tuesday, Allstate officials said all coverage decisions are made by the federal program.

"Although policies are sold and serviced by private insurance companies like Allstate, all coverage and claim decisions are made by the National Flood Insurance Program based on their policy language," said spokeswoman Carla P. Signoret. "As such, questions regarding flood insurance coverage and claims should be directed to the NFIP."

The Federal Emergency Management Agency, which manages the flood insurance program, did not respond to a request for comment Wednesday.

On Tuesday, city officials said they wers talking to the FEMA and pushing back against the basement designation. City spokeswoman Tonya Daniels told the Miami Herald the administration has received assurances from FEMA that the restaurant does not count as a basement according to its definition, which states that a dwelling with a floor below ground level on all sides is considered a basement.

"We're fighting this all along the way," Daniels said, arguing that the public sidewalk that remains in front of the business negates the basement designation and the adjuster made a mistake. "And we'll be working with Sardinia."

Sardinia's predicament was mentioned during a commission committee meeting Wednesday, during which Assistant City Manager Susy Torriente said the city was working with the adjuster to get the restaurant covered.

"We are working with the adjuster to reinterpret that guideline," she said.

Sunset Harbour's low-lying land, along with the southern stretch of West Avenue, represent the most extreme road-raising project in the city. But other streets could get lifted.

Assistant City Manager Eric Carpenter, who oversees the city's public works projects, told the Herald he wouldn't design streets in way that would harm private properties.

"We are not going to knowingly create a scenario where we adversely affect private property owners," he said.

The flooding that damaged Sardinia could have been prevented had the city's system been operating at full capacity. Because pumps were either turned off due to nearby construction or out for repairs, only one of six pumps was working. Along the lower sidewalk, water pooled and seeped into some storefronts.

Gallo said when flood waters rushed into his restaurant in 2009, back when the street and sidewalk flooded at high tide or in heavy rainfall, he got a check two days after the adjuster saw the property.

Now, with a re-engineered street, he worries the city's "experiment" in combating sea level rise might come with some collateral damage.

"It's an experiment," he said. "We're going to have to pay the price for their experiment."

Joey Flechas: 305-376-3602, @joeflech

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