Businesses stagger from virus’ economic blow
Small to mid-size businesses in Glen Ellen, Kenwood, Oakmont, and the rest of Sonoma Valley were recovering from the “new normal” of wildfires in their backyard and forced power outages when they got hit with a “newer normal,” one that for some poses an even bigger threat to their livelihood.
While business owners understand the danger of COVID-19 to their families and friends, and are taking precautions like anyone else, the reality of temporarily closing or paring down businesses they’ve built over the years is profound.
“We are most concerned about the safety of everyone in our community, but the worries about the business are always sort of hovering in the background, a nagging worry that keeps me up at night” said Betty Kelly, who, with her daughter Caroline, owns Wine Country Chocolates in Glen Ellen and Sonoma.
Both of the Kellys’ retail shops have closed, but their bills still have to get paid. To survive, the Kellys are trying to boost their Internet sales. But the most difficult impact is having to lay off all eight of their employees.
“It breaks my heart because I know this is difficult for everyone,” said Betty.
On March 17, Sonoma County health officials issued its shelter-in-place order, which told people to stay in their homes to help prevent the spread of COVID-19. Certain “essential businesses,” such as grocery stores, pharmacies, banks, gas stations, and of course, hospitals can stay open.
The county’s order technically lasts through April 7, but you’d be hard pressed to find anyone who thinks that date won’t be extended.
Restaurants and other facilities that prepare and serve food are allowed to operate, but only for drive-thru, delivery, or carry out, which puts a serious crimp in your average eatery’s business model.
Some local restaurants are giving the take-out method a try, with mixed results.
“The take-out is not great,” said Suzette Tyler, who owns Palooza Gastropub with her husband Jeff, in Kenwood. It’s enough on most days to cover payroll, but it’s not as much that’s needed.” Nevertheless, Tyler said the plan is to stay open for take-out as long as it’s economically feasible to do so.
“This is economically devastating for our business and our employees,” said Tyler.
At Café Citti, take-out business has been steady, serving about 40 people a night.
“We have people calling in and picking up for their neighborhoods – everyone is doing their part to help each other out,” said Linda Citti.
However, the impact on Café Citti has been “extreme,” with business already down 50 percent before the shelter-in-place order, said Citti.
“We had to dip into reserves to make payroll and rent,” she said. “That’s why we’re putting ourselves at risk by staying open right now. We are desperately trying to keep our business afloat, and as much as I would feel more comfortable sheltering in place at home, we just don’t have that luxury.”
TIPS Roadside in Kenwood tried to make a go of lunch and dinner take-out but pulled the plug on March 27, writing on their Facebook page that all restaurant operations and their Tri-Tip Trolley food truck were shutting down, with the situation being reassessed in two weeks.
In an earlier email, TIPS owner Susie Pryfogle said that even with the take-out service, sales were down 50 to 70 percent from a normal time. And, they had already had to lay off most of their employees.
“The economic impact on our employees is much harder,” said Pryfogle, who owns TIPS with her husband, Andrew. “Restaurant workers are check to check… service staff depend heavily on gratuities which is a massive hit to them.”
The Pryfogles have set up gofundme page for their employees to help them get by.
Sondra Bernstein, owner of the fig café & winebar in Glen Ellen, decided to shut down the restaurant, as well as her other eating establishments and her catering business, and was forced to lay off 170 employees.
“The financial burden of the payroll was too much to bear with no revenue,” said Bernstein, who stopped taking a salary along with managing partner, John Toulze.
The two have a number of efforts in place to provide food and financial assistance to their laid off employees.
“John and I are in it for the long haul and are determined to get back on track as soon as it is safe,” said Bernstein. “But that is the real question – an unknown for all of us.”
Local lodging businesses haven’t fared much better. The Olea Hotel in Glen Ellen lost $50,000 in revenue in March. If the restrictions stay in place in April, owner Sia Patel estimates that would be a loss of $80,000, and if things continue like this, May losses could reach $120,000.
Patel and her husband, Ashish, had to lay off 14 employees. They have cancelled/moved reservations through April 10 as of the moment, but they’ll have to wait for the county’s and state’s next steps.
“Technically, we can begin accepting reservations April 8,” said Sharon Rooney of Four Sisters Inns, which operates the Kenwood Inn & Spa in Kenwood, and the Gaige House + Ryokan in Glen Ellen. “But, honestly we don’t know whether the stay at home order will be extended, or if people will even feel like traveling for leisure so soon after its lifted.”
That unknown of when things can get back to even a semblance of normalcy puts extra stress on businesses already hurting, and the list is long.
Calvary Tire & Brake’s business is down 60 percent, contractors are having some jobs disappear or be postponed due to clients waiting out a volatile stock market, and real estate deals are falling through.
Kenwood-based Cuvee Wine Country Events has had its events and wine tours cancelled for the foreseeable future.
Promotion products business Focus 4 in Kenwood anticipates a 65 percent loss in business due to many trade show cancellations because of COVID-19.
Dr. Keith Boxerman in Kenwood said his dentist business could lose between $30,000-$90,000 depending on how long his doors have to be shut.
“Between fires, power outages, and air conditioning failures, it seems that I’ve been closed more than I’ve been open,” said Dr. Robin Lowitz, a medical acupuncturist in Oakmont. She’s not sure she’ll be able to reopen.
Local businesses are eager to look into help offered by the local, state and federal government, if it be through low interest loans, extended tax deadlines or the mammoth $370 billion approved by the U.S. Congress to try and stem the decimation of small businesses, and help workers keep their jobs. This was part of the $2 trillion economic relief package passed on March 27.
“The stimulus plan seems promising, but until I see all the details, it is not what we’re counting on,” said Suzette Tyler of Palooza. “Really, there can be no set plan because there is so much uncertainty right now.”
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