Category 3 storm makes landfall in Siesta Key, Florida
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Singer Taylor Swift has donated $5 million to help relief efforts for people impacted by Hurricanes Helene and Milton.
Feeding America CEO Claire Babineaux-Fontenot announced the donation Wednesday in an Instagram post thanking Swift for “standing with us in the movement to end hunger and for helping communities in need.”
“We’re incredibly grateful to Taylor Swift for her generous $5 million donation to Hurricanes Helene and Milton relief efforts,” Babineaux-Fontenot wrote. “This contribution will help communities rebuild and recover, providing essential food, clean water, and supplies to people affected by these devastating storms.”
Over 2 million customers are without power as Hurricane Milton cut a path through central Florida late Wednesday night, according to the websitePowerOutages.us.
Energy companies serve more than 11.5 million customer accounts statewide, according to the website. The number of people left without electricity continued to grow as hurricane-spawned tornados, sustained tropical winds, and flooding inundated the region.
Nearly 100% of customers in Hardee County were without power, and people in Sarasota, Manatee, and Pinella counties were also hit hard by outages.
Milton is nowa Category 2 hurricane, crossing the Florida peninsula after making landfall along its west-central coast Wednesday night. The storm, possibly the most powerful hurricane to hit the Tampa Bay area in more than a century, is producing a life-threatening ocean surge that could result in 10 to 15 feet of water in some areas and extensive damage. Even before landfall, strong winds brought a spate of unusually strong tornadoes, including one in St. Lucie County that caused multiple fatalities.
Florida's sun and low taxes enticed many hedge funds and other financial professionals to move south. Now another massive hurricane is putting that love affair to the test, but many big-name managers are committed to remaining in "Wall Street South" for the foreseeable future.
The state, facing on Wednesday, has lured investors for years but its attractiveness only increased during the pandemic. Billionaire Carl Icahn uprooted his firm from New York to an office near Miami in 2020. Paul Singer's Elliott Investment Management followed later that year with an announcement that it was opening a West Palm Beach office. And Ken Griffin's Citadel said in 2022 that it was moving to Miami from Chicago.
Dangerous winds are still happening, St. Pete. Please stay inside until the storm passes.
National Hurricane Center advisory made on October 9
"We took the plunge with our eyes wide open," said Jack Ablin, chief investment officer at $52 billion Chicago-based Cresset Asset Management, about his move to Palm Beach on Florida's east coast in 2015. His principal residence will stay in Palm Beach even though he plans to ride out this storm from his other home in the Blue Ridge Mountains of South Carolina.
For many other fund managers, the tradeoff between lower taxes and a favorable business climate versus the specter of insurance payments and the cost of rebuilding potentially annihilated real estate, still works in favor of Florida, according to people familiar with their thinking.
The big hedge funds that moved to Florida remain committed to maintaining their operations there, those people said. Similarly, other executives who moved their personal residences to the South during the pandemic while continuing to telecommute for firms based in the Northeast have every intention of staying put, according to two sources familiar with their thinking.
Other Wall Street financial institutions, including Goldman Sachs (GS.N), opens new tab and JPMorgan Chase (JPM.N), opens new tab, have built up staff in Florida both to serve customers who moved and to accommodate employees eager to work from the South.
CONTINGENCY PLANNING
Many of the firms that moved - including Citadel, Elliott, and Icahn - are based on or near Florida's east coast where easy flights to New York and other locations were a draw, as was Miami's bustling nightlife and vibrant arts scene. That has put them some 300 miles (483 km) east of where forecasters expect Milton to make landfall and wreak the most serious damage after
"If the need to evacuate were to arise in Miami, we have robust contingency plans for our employees, their loved ones and our businesses,” said a Citadel spokesman. But the firm's commitment to Florida, where founder Griffin was born, is clear. The company plans to build a 54-story tower as its new headquarters in Brickell, the buzzing Miami neighborhood that has become the heart of "Wall Street South."
A handful of financial industry firms, however, are based in the immediate path of Milton.
One founder of an $8 billion fund on Florida's west coast flew in to the state to keep an eye on both his firm and his home, and now plans to ride out the storm on a high floor of his office building, people familiar with his thinking said.
Another firm in the path is Raymond James Financial , founded and still based in St. Petersburg. The 62-year-old brokerage and investment advisory firm evacuated staff from its head office on Tuesday.
The firm is maintaining service and support at back-up facilities and a spokesman declined to provide additional comment to its communications on social media.
Blue Ocean Technologies ATS, a Florida-based financial technology company operating an overnight trading system for U.S. securities, has its executive offices just north of Miami in West Palm Beach, and has a backup plan.
"I've been living here for 10 years, and the hurricanes have missed me for 10 years," said Brian Hyndman, president and CEO of Blue Ocean. The firm's trading system, its trade-matching engine, is based in New Jersey. "We can work remotely from home, and we've got backup and support on both the east and west coasts of the United States."
LONGER-TERM IMPACT?
Two sources familiar with executive recruiting in Florida told Reuters they are concerned that experienced staff may become more reluctant to shoulder the growing expense and risk of living in a hurricane zone, and that hiring may become more costly or difficult.
Average homeowner premiums in Florida rose 57% between 2019 and 2023 according to data from Benjamin Keys of the University of Pennsylvania and Philip Mulder of the University of Wisconsin, a steeper rise than anywhere else in the nation. Average insurance costs were $4,060 last year, according to Keys.
A step chart showing claims paid by FEMA in Florida under the National Flood Insurance Program.
Mel Montagne, president of FIRM, a nonprofit that lobbies for fairer insurance rates for Floridians, and who also sells commercial insurance, said clients have been getting nervous and wracked with buyer's remorse.
"They are looking around and saying, 'what the hell is this?'" said Montagne, whose clients include finance industry executives who migrated to Florida during COVID.
"They are looking to sell to get the hell out of Dodge."
Hurricane Milton threatens to swamp Florida's troubled property-insurance market, potentially pushing prices higher and threatening coverage in a storm-prone region that already has the highest insurance costs in the nation.
The mammoth storm, which analysts estimate could cause $60 billion to $100 billion in insured losses, is churning toward a state that has been shunned by national insurers, leaving residents to seek coverage in a market where commercial providers regularly fail or refuse to pay claims.
"These are additional risks that, based on the fundamental principles of insurance, should not be present," said Martin Weiss, founder of the independent Weiss Ratings analysis firm. "Your insurance company is supposed to be your backup plan."
On top of that, Floridians could also face additional charges if the state-run insurer runs out of money to pay claims.
U.S. forecasters are describing Milton as a "catastrophic" major hurricane, packing maximum winds of 160 mph (260 kph). It is projected to make landfall in the Tampa Bay area around 2 a.m. EDT (0600 GMT) on Thursday. The low-lying region, home to 3.1 million people, is still cleaning up from Hurricane Helene last month.
National Hurricane Center advisory made on October 9
Forecasts suggest the damage could be on par with 2005's Hurricane Katrina, the costliest natural catastrophe in U.S. history, which caused $100 billion in insured losses when it swamped New Orleans.
For the past several years, Florida has been one of the most visible fronts of a nationwide property-insurance crisis that has caused premiums to rise across the U.S. by an average of 31% between 2021 and 2023, according to research by Benjamin Keys of the University of Pennsylvania and Philip Mulder of the University of Wisconsin.
Those factors are all at play in Florida, which has led the nation in population growth since 2021 despite a low-lying topography that leaves it vulnerable to rising sea levels and hurricanes. Florida ZIP codes account for 78 of the 80 riskiest areas in the country, according to Weather Source, an environmental risk consultancy.
Some insurers pulled out after Hurricane Andrew in 1992, leaving the market to smaller companies that often lack the resources to sustain significant losses.
Some 41 Florida insurers have declared bankruptcy or otherwise failed since 2003, while only 37 have failed in the rest of the country over that time period, according to public filings. Those that stay in business can be tight-fisted; Weiss Ratings found that six of the state's largest providers rejected nearly 50% of their claims in 2023, an unusually high figure.
The state set up a nonprofit, Citizens Property Insurance Corp, in 2002 to provide coverage for homeowners who cannot find it through the private sector. With 1.2 million policies in force, it is now the largest provider in the state.
Sofia Andreeva and her uncle Ivaylo Kanchev board up their home ahead of the arrival of Hurricane Milton in St. Petersburg, Florida, U.S., October 8, 2024. REUTERS/Octavio Jones Purchase Licensing Rights, opens new tab
Unlike private companies, Citizens will not run out of money to cover claims, as it has the power to charge policyholders an extra 15% if it runs out of cash.
If that fails to cover the bill, it can add a 10% surcharge to anybody in the state who has taken out any sort of insurance policy at all - from boats to pets to vehicles - whether or not they obtain their coverage through Citizens.
Citizens said in July it had $14.4 billion on hand to cover any losses. "We will always be in a position to pay claims," spokesman Michael Peltier said on Tuesday.
Collectively, the market has shouldered Florida homeowners with average insurance costs of $4,060 last year, nearly $1,000 higher than any other state, according to Keys' data. Those figures many not include the cost of flood insurance, which is typically purchased separately.
Average premiums rose 57% between 2019 and 2023, a steeper rise than anywhere else.
SCALING BACK COVERAGE
Karyn Roeling, president of Seibert Insurance in Tampa, said those spiraling costs have prompted some of her clients to scale back coverage or opt to go uninsured.
While banks require people who have mortgages on their homes to carry insurance, it is not mandatory for those who do not owe money on their property.
Roughly one in 13 homeowners in the United States is uninsured, according to the Consumer Federation of America, with Black, Hispanic and Native American households more likely to lack coverage.
State officials and industry trade groups say the market has stabilized over the past year, thanks to legal reforms that cut back on what they characterize as frivolous lawsuits and questionable claims.
Citizens has been able to reduce its exposure by transferring hundreds of thousands of policies to private providers, according to state data.
A damaging hurricane could spook private insurers that have begun to return to the Florida market.
"Rates are going to continue to just go up and up, insurers could go bankrupt and Citizens will be on the hook to pick up that much more of the slack," said Sam Boyd, a Sotheby's real estate adviser in Melbourne, Florida.
But others note that real-estate prices have continued to rise despite the state's exposure to extreme weather, and they doubt Milton will dull Florida's appeal.
"In a couple months, once the weather gets nice, people are going to start coming down, sight unseen," said Bruce Loren, a Palm Beach lawyer who specializes in high-end real estate.
Hurricane Milton landedonFlorida's west coast on Wednesday, striking a little sooner and further south than forecast, offering the state a glimmer of hope it might be spared the worst of the anticipated catastrophe.
The storm made landfall around 8:30 p.m. EDT (0030 GMT) as a Category 3 hurricane with maximum sustained winds of 120 miles per hour (195 kph) near Siesta Key, the U.S. National Hurricane Center said.
Siesta Key is a barrier island town of 4,500 off Sarasota about 60 miles (100 km) south of the Tampa Bay metropolitan area, home to more than 3 million people.
With the storm coming ashore before high tide, Governor Ron DeSantis said he hoped the west coast of Florida could avoid the worst of the predicted storm surge. Forecasters said seawater could rise as high as 13 feet (4 meters).
DeSantis also expressed hope that Tampa Bay, once seen as the potential bull's eye, could avoid major damage and allow shipping to resume promptly after the storm passes.
Even so, Milton had already spawned at least 19 tornadoes, causing damage in numerous counties, and destroyed around 125 homes, most of them mobile homes, DeSantis said.
The Hurricane Center labeled it an "extremely dangerous" storm capable of deadly storm surge, ferocious winds, and flash flooding across Central Florida.
Hurricane Milton will continue to bring “devastating rains and damaging winds” across the central Florida peninsula throughout Thursday before exiting the state late in the day for the Atlantic Ocean, the National Weather Service says.
The hurricane had maximum sustained winds of about 105 miles per hour (165 km/hour) at 11 p.m. Wednesday, according to the weather service, and storm surge warnings were in effect for parts of Florida’s western and eastern coastlines.
The weather service said Boca Grande, Florida, could see a surge as high as 13 feet above ground if it hits at the same time as high tide
The service also said tornadoes were possible through early Thursday morning over parts of central and eastern Florida.
Multiple tornadoes spawned by the storm caused major damage to several communities Wednesday evening before the hurricane made landfall.
Cyclone, typhoon, hurricane-what's the difference
While technically the same phenomenon, these big storms get different names depending on where and how they were formed.
Storms that form over the Atlantic Ocean or central and eastern North Pacific are called "hurricanes" when their wind speeds reach at least 74 mph (119 kph). Up to that point, they are known as "tropical storms."
In East Asia, violent, swirling storms that form over the Northwest Pacific are called "typhoons", while "cyclones" emerge over the Indian Ocean and South Pacific.
Bands of intense rain and heavy winds whipped across south and central Florida on Wednesday night, as Hurricane Milton began to churn from the west side of the state’s peninsula to the east.
Even as a Category 2 storm, the Florida Division of Emergency Management warned Milton would be “continuing to bring life-threatening weather hazards” to the state.
Take a look at some of the intense rainfall drenching the area below.
Max Watts of Buford, Georgia, walks through a parking lot to check on a trailer parked outside the hotel where he is riding out Hurricane Milton in Tampa, Florida [Julio Cortez/AP Photo]A man in Sarasota, Florida, records the storm as Hurricane Milton makes landfall [Marco Bello/Reuters]Chris Nation of Commerce, Georgia, climbs a tree outside the hotel where he and co-workers are riding out Hurricane Milton in Tampa, Florida [Julio Cortez/AP Photo]
What are the deadliest hurricanes in US history?
Authorities have confirmed the first deaths related to Hurricane Milton, but the toll of the storm will likely not be known for some time.
It made landfall just days after Hurricane Helene cut across the southern United States, leaving at least 230 people dead across six states. That puts that storm among the deadliest in modern US history.
The most devastating storm on record came in 1900, when the Great Galveston Hurricane tore across Texas, killing at least 8,000.
More recently, Hurricane Katrina in 2005 left 1,395 people dead when it hit the southern United States. The storm’s severity caused the levees around New Orleans to fail, allowing for deadly flooding.
Other deadly hurricanes in the US include 2012’s Hurricane Sandy, which left 219 people dead across New York and New Jersey, and 2022’s Hurricane Ian, which killed 156 when it came ashore at Cayo Costa Island, Florida.
An American flag waves as Hurricane Milton pushes past Orlando, Florida [Jose Luis Gonzalez/Reuters]
