Monday November 30, 2020

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2020|12

Downtown in Winter

Small businesses give the city its character. Can they survive until spring?

by James Leonard

From the November, 2020 issue

"It was like a bad horror movie," recalls DDA communications manager Maura Thomson on driving into town after the Covid-19 shutdown began in March. "Nobody was downtown."

Six months later, "it feels a lot better," says Thomson. "There are people downtown, [and] everybody's outside," agrees DDA director Susan Pollay. "I see a lot of people walking around. I see people dining. If you're on Main St. on a Friday night, it feels fairly full."

But that's just looking at the tables that restaurants have set up on the sidewalk and, on weekends, in the streets. Inside, they're limited to half capacity. While no one gathers data on how individual business are faring, objectively downtown is more empty than full. In late September, the DDA's hourly parking revenues were running at 30 percent of normal--and that's "a fragile number," says Pollay. "We've had really good weather."

Nine downtown restaurants have closed, and others are "surviving based on a robust carryout [and] street closures," Pollay says. "Retailers who either had an online presence already or who were nimble in getting it up and running quickly are doing better than those that weren't." But "there really isn't a whole lot now that people are optimistic about," says Thomson. "I don't think we're even halfway through this thing. I don't think we're going [to have] clarity until six months from now."

"That's the challenge of the pandemic," agrees Pollay. "We've never experienced it for a hundred years, and it's being managed locally and on a state level but not managed nationally. We could be seeing another outbreak." And with winter coming, only the hardiest souls will be dining outdoors.

"We're living in historic times, almost biblical times," Pollay says. "Many people have never lost that absolute dread and panic [from] when it all shut down in March."

"The loyalty of our community is frankly our lifeline," Thomson says. "Because I don't know that we can rely on anybody on the outside saving us."

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The impact

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on the DDA's finances is huge. Income from monthly parking permits has held constant, but hourly parking on streets and in lots and garages has collapsed. Overall, the garages are less than half full.

Before the pandemic, the DDA projected $25 million in revenues for the fiscal year that started in July. But the pandemic cut revenues for the prior fiscal year by $6.7 million, and so-called "optimistic" projections show a $9.1 million drop this year. So the DDA had to cut expenses by at least that much.

The biggest cut came to the biggest budget item: capital improvements. "We've put the garages back into very good shape," says Pollay. They figure they can go "a couple of years without doing repairs." Along with putting off installing new lighting fixtures and electrical capacity, the capital improvements budget is down from $10.4 to $3.7 million, a savings of $6.7 million.

The next biggest cut was to operations--down from $9.7 million to $7.6 million, a saving of $2.1 million, most of it via a 30 percent cut in Republic Parking personnel. The city contractor laid off twenty-three people, mostly from the night shift, since folks aren't coming downtown for movies, shows, and concerts. Republic also cut operational spending 20 percent by deferring noncritical repairs and purchases.

Pollay says the DDA's six-person staff didn't take a "major hit"--the budget is down $300,000, from $1.8 million to $1.5 million. "I took a voluntary salary cut," says Pollay. "Nobody got pay raises."

Some budget items will stay the same, chiefly the $2.7 million for debt service. But the city's 20 percent off-the-top payment drops in sync with revenue, which means a projected $2.3 million less flowing to the city's general fund.

The lone upside of a 70 percent drop in hourly parking revenue is that with fewer folks using their credit cards to pay for it, card fees are projected to be down half a million dollars, from $1.5 to $1 million.

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"It's only going to get harder this winter," says Pollay. "I was downtown eating at a restaurant and there were heaters. But the heaters will only carry you for so long."

"The two things we have on our side right now are this weather and the ability to repurpose our streets," says Thomson. "When winter comes, that pretty much is taken away. What the next lifeline is--I don't know. Is there one? I don't know."

Bivouac founder Ed Davidson has been in business downtown for nearly fifty years and says he's never seen a harder time.

"People love the downtown," he says. "When the university recruits people, they take them downtown." But the stores and restaurants that give downtown its character, are walking a knife's edge. Nine downtown restaurants have already closed, and there are predictions that 20 percent or more may go out of business before the pandemic ends.

"I wish somebody would get out and say to everybody in town, 'buy a $50 or a $100 gift card" from a local business, Davidson says. "You'll eventually use it, and it's an investment in downtown.

"The dividend will be still having the diversity of restaurants in April," he says. "It's going to be a boring downtown if all the little places don't make it."

"What downtown will look like at the end will be monumentally different," Pollay says. But she believes workers and customers will come back after it's over.

"There are a lot of people [who] tell us we're not going to see any more office use downtown because everybody's working remote," she says. "Well, from what I'm hearing, people have burned out on Zoom, and they really are missing other humans."

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Disolve the DDA?

One proposed resolution directed "the City Administrator and City Attorney to Conduct Due Diligence and Prepare an Ordinance for Dissolution of the DDA." The other called for waiving attorney-client privilege covering a previously prepared memo studying how that could be done.

Councilmember Anne Bannister submitted the resolutions after hours on Friday, October 2 for consideration the following Monday. Though that left little time to respond, "Quite a few people were very upset," says DDA head Susan Pollay. "Everyone knows downtown is fragile right now."

The DDA has long been a target of what the Observer calls the "Back to Basics" faction. In control of council since 2018, they'd already laid the groundwork by having a memo drawn up to assess how the city could take over its functions.

By Monday, Kathy Griswold had joined as a sponsor--but the uproar was so great that Bannister withdrew the dissolution motion at the beginning of the meeting. The motion to release the memo passed 9-2, with only mayor Christopher Taylor and councilmember Julie Grand voting against. Released in redacted form by week's end, it describes how the city could take back control of the parking system and pay for the bonds issued to pay for them using the income from the system.

A week later, the annual joint session of council and the DDA started with the DDA's presentation of what it'd done to mitigate the pandemic's impact on downtown businesses--converting 150 parking spaces into curbside carryout spots, repurposing other spots for patios and retail spaces, covering all of the city's expenses related to sidewalk occupancy, and funding the weekend street closures, among others.

Bannister had questions afterwards. "Does DDA have performance metrics?" she asked. "We have a lot of smart residents who would like to help with performance and tracking performance and management decisions." Pollay replied that the DDA would provide "as much metrics as we can." But since Bannister lost her August primary and will be leaving council, someone else would need to follow up on that request.

Then Jane Lumm spoke. "I want to thank the DDA for all the support that's been provided businesses," said the long-serving councilmember. "We've received many emails from businesses [that] have commended the DDA." She also praised the group's presentation, calling it "the meatiest, most informative, detailed presentation that I can recall."

And with that, all discussion of dissolving the DDA ended. "There was this brouhaha last week regarding the DDA," she said. "I am not supporting dissolving the DDA." With council control returning to the "Activist Coalition" this month, the authority's future is secure for now.