With barrels of cash on hand, the CrowdStrike co-founder is sinking $1 billion into transforming a former sleepy Scottsdale, Ariz., amusement park adjacent to the Promenade (which he also owns) into the Parque, an apartment/tech office/retail center on Scottsdale Road.
While Kurtz surely can handle it, the billionaire's portfolio — as well as his company's heretofore spotless reputation — was dented over the last week: CrowdStrike stock plunged 30 percent, after a security update it pushed caused a terrifying freeze.
As CNBC put it, "When computer screens went blue worldwide on Friday ( July 19), flights were grounded, hotel check-ins became impossible, and freight deliveries were brought to a stand-still. Businesses resorted to paper and pen.
"Initial suspicions landed on some sort of cyber terrorist attack. The reality, however, was much more mundane: a botched software update from the cybersecurity company CrowdStrike."
Like first responders around the world, the Scottsdale Police and Fire departments are increasingly reliant on technology, for everything from the 911 system to social media posts.
And, like thousands of other emergency agencies, Scottsdale had to scramble July 19.
After relying on computers and technology, emergency responders and others went into "old school" mode — though the system-wide freeze lasted for only about half a day.
This Is No Drill
Scottsdale Fire Chief Tom Shannon is no stranger to emergencies, though this one didn't have any smoke.
"I was notified shortly after the outage by the alarm room," Shannon said. Almost immediately after, one of his lieutenants told him fire departments around the state were also offline.
This was an actual emergency, not a drill — but Scottsdale Fire was prepared for it, Shannon said.
"The Fire Department is practiced in operating in 'manual mode' where alarm rooms and responders utilize alternative methods to call take, dispatch and deploy resources."
Somewhat spoiled by computer-assisted routing, Shannon's emergency responders "used hard copy mapping systems or even their personal devices (if operational) to help map" as they raced to answer distress calls.
"The majority of our systems were up within several hours after city IT got involved," Shannon said.
Asked if there were any "lessons learned" during and after the computer freeze-up, Shannon pondered, "There are always additional safeguards that can be taken to shore up our emergency response systems.
"We perform after action activities after each incident like this and I am certain that the city's IT, Public Works, PSAP, Emergency Management and Fire Department will work together to implement any additional actions."
Police dispatchers and officers had similar challenges and responses to the CrowdStrike computer freezes.
"For the police department, our communications staff and officers had to handle responding to calls differently by manually documenting locations and types of calls," said Sgt. Allison Sempsis, a Scottsdale Police spokeswoman.
"That said, all 911 calls were still received and responded to accordingly," she added.
"We always have contingencies in place for technology issues that arise. Officers and dispatch were still able to respond to 911 calls as normal."
Kelly Corsette, a city spokesman, downplayed the flight-freezing event.
"The city has hundreds of different software programs, along with backup and recovery procedures so that city operations are minimally interrupted when something like this occurs," Corsette said.
He said the city's IT staff brought "all systems back online within a few hours, and backup procedures for systems such as Police emergency dispatch were employed so that zero downtime occurred in those critical areas."
The Parque
In Airport and Planning commission meetings last fall, Kurtz was not physically present.
But he loomed over the proceedings as his representative repeatedly referred to him as "a visionary" and "the man you want to transform Scottsdale."
The plan calls for 1,200 apartments/condos, 200 hotel rooms and 250,000 square feet of commercial floor area on the 33-acre site that formerly was CrackerJax.
Kurtz finally surfaced Nov. 13, successfully pitching the Parque to Scottsdale City Council.
"Transformation begins with a vision," the ginger-haired, mustachioed Kurtz said, reading from a prepared statement. "In the case of The Parque, our vision is to create a true mixed-use project that not only represents how special Scottsdale is, but a project that respects residents' values and embraces our community's high standards of sustainability.
"I believe the park will be a catalyst that attracts the company's top innovators, technology entrepreneurs, venture capitalists and knowledge workers."
While several neighbors complained it would create a parking lot of bumper-to-bumper traffic on Scottsdale Road, City Council approved Kurtz's "transformational" project at the former CrackerJax site by a 5-2 vote — with council members Barry Graham and Kathy Littlefield opposed.
The Parque is still in pre-construction phases, according to John Berry, an attorney on the project.
"The builder is taking the next steps in the process and preparing an application for submittal to the Development Review Board," Berry said.
"No timeline on when that will be completed since it is a large and complex project."
Worldwide Stoppage
Eight months after Kurtz received the green-light for his "visionary" project, the usual lightning fast internet access around the globe slowed to the crawl that some fear Scottsdale Road in front of The Parque will become.
Managed Detection and Response, or MDR, is a big deal in cybersecurity.
On July 15, a tech company excitedly sent out a press release, datelined at the company's Austin, Texas, headquarters.
CrowdStrike crowed over its "Falcon Complete Next-Gen MDR to stop breaches with unprecedented speed and precision across the entire enterprise attack surface."
The upgrade was run by CrowdStrike's "cybersecurity platform and elite cyber expertise."
Three days after the CrowdStrike press release, Scottsdale city workers and tens of thousands of other government agencies looked at their computers and saw a chilling sight:
The dread blue screen.
Indeed, the very system CrowdStrike promised would "stop breaches" hijacked and froze systems around the world.
"Early on Friday, the company issued a defective update to its Falcon vulnerability-protection software that caused PCs, computer servers in data centers and display screens to crash," CNBC reported.
Kurtz scrambled to address the outage.
On social media early in the freeze-up, he said CrowdStrike was "actively working with customers impacted by a defect found in a single content update for Windows hosts.
"This is not a security incident or cyberattack," he stressed.
"The issue has been identified, isolated and a fix has been deployed."
One expert told CNBC it may be the "largest IT outage in history."
And, though Scottsdale and other cities, agencies and businesses returned to normal later that day, the fix was not swift for some.
Airlines struggled to get back on line through the weekend, with most operating as usual by the Monday following the snafu.
But on Tuesday, July 22, Delta Air Lines canceled hundreds of flights for the third day in a row.
The same day, however, CrowdStrike's stock price had a mild rebound — suggesting the mini-crash after the outage may have been temporary for a cybersecurity company that has had its stock price soar 70 percent in the last year.
(c)2024 East Valley Tribune (Mesa, Ariz.) Distributed by Tribune Content Agency, LLC.
