Already buffeted by the recent years of business interruptions from wildfires, power outages and floods, it looks like some of Healdsburg’s downtown businesses are not going to survive the current pandemic-caused economic shutdown.
Even where some storeowners are receiving temporary or partial rent relief from their landlords, the impacts of being closed for more than two months (and counting) without retail receipts has forced some owners to drain reserves and life savings, asking themselves if it’s worth the struggle.
While several businesses have received Small Business Administration loans for 2 ½ months of payroll and others are receiving $5,000 to $15,000 zero-interest loans from the city of Healdsburg, the current economic shutdown is exposing the cumulative impacts of too many recent disasters and whipsawed market conditions.
“My savings are depleted and my unemployment has not been approved,” one downtown gift shop owner told The Tribune. “Frankly, I have lost faith that any help is forthcoming.” The merchant said he is two months behind rent with June due soon and with his landlord not offering any payment deferrals or forgiveness.
“This is a difficult situation for everyone,” said Tallia Hart, executive director of the Healdsburg Chamber of Commerce. “Small businesses are really suffering and need rent deferral or forgiveness. Many landlords have helped during this crisis but some can not as they also have bills to pay.” Hart said a good friend of hers just closed her store.
“It was heartbreaking,” she said.
Hart urged local business people to put pressure on their local, state and federal elected officials. “Remind them there is an election this November,” she said.
Several merchants, galleries and crafts people with Healdsburg studios have launched online efforts to show merchandise, take orders and do shipping. Another merchant said, “it’s better than no revenue at all, but I’m only doing a fraction of what my normal business would be.”
A small, but growing number of Healdsburg businesses have banded together on an e-commerce website called bailouthbg.com where GoFundMe campaigns and gift certificate offers are listed. A friendly local shopper, Caroline Bontia Coady, has created a website for merchants at shoplocalhealdsburg.com with listings for services, supplies, specialty foods, restaurants, florists and retail stores.
As the county public health officer is relaxing business closure rules, the Healdsburg Chamber of Commerce has compiled a Reopening Guidebook for businesses to meet continued public health safety measures and employee safety requirements.
Healdsburg’s downtown and commercial property owners include a variety of entities from “mom and pop” individuals to larger investment property companies based in San Francisco, San Jose and Palo Alto. Merchants facing the Healdsburg Plaza pay some of the highest rents in Sonoma County. A mid-block storefront, now occupied by a desperate tenant, has a monthly rent above $5,000. Two nearby storefronts rent for more than $6,000.
A clothing store owner on Healdsburg Avenue is paying $6,000 a month, and the tenant was told by the landlord to apply for loans and not to ask for a rent reduction. In response that shopkeeper said, “We have an online store and Instagram, so we are desperately trying to make sales to pay a few small bills. We have applied for PPP, EIDL, Healdsburg Small Business Loan and every grant that has come our direction.”
“Every single situation is different,” said Eric Drew, of Sotheby’s International Realty and a 46-year veteran of local real estate and property management. “Most (landlords and tenants) want to help each other, but a few cases can get adversarial.”
Drew has reworked some leases to allow for immediate discounts in exchange for a longer lease. One deal included a 20-month rent discount for a six-month lease extension. Another arrangement deferred 60-90 days of rent to be added on to regular payments over the following 10 months.
“Businesses need a little breathing room and something to ease their cash flow pressures,” said Drew.
Asked if he expected to see business closures, he said, “Yes, I think we will see some vacancies.” Devoted to local history, Drew said that Healdsburg’s commercial core has “always been shuffling” through changes.
“Healdsburg’s hidden resiliency is the strength of our local business owners,” he said. But he agreed that the recent spate of natural disasters and the current pandemic are proving to be historical challenges.
“Remember, we haven’t had just the four big blows,” said Drew. “The first and biggest is Amazon.”
To stay in business, local shops, lodging, restaurants and others need to provide “memories and service” he said.
John Dayton, of Dayton and Tremont Real Estate, manages several downtown properties for a handful of landlords. “There have been lots of conversations and some landlords have accepted half pay or deferred payments but each case is ultimately up to the landlord,” he said.
Dayton said he has encouraged his clients to offer a free month or other support to avoid future vacancies or late payments in the future, “I think most landlords have been pretty reasonable.” Still, Dayton said, he predicts as many as 15% of local stores and small businesses may be lost.
“A lot of this is the residual impact from all the fires and past (power) outages. You can’t blame some of these businesses from not wanting to go through this again, especially while there is still lots we don’t know,” he said.
Jessica Timmsen, who owns Mr. Moon’s with her mother Patti, was in her store on Tuesday putting together delivery orders. She said their gift packages were popular for Mother’s Day, but only a fraction of normal business. Like dozens of downtown businesses, Timmsen has laid off her entire staff. Her store building is owned by a San Francisco person she has never met.
Michelle Schultz owns Market 337 on Healdsburg Avenue and plans to reopen when allowed. In the meantime she is partnering with other merchants to put together gift selections. One partner is Wolfe Coffee and she is a member of bailouthbg.com.
Jennifer Cadd owns Vanity the Salon in the Vineyard Plaza. She hosted a Zoom meeting with her staff last week to go over social spacing and extra health and sterilization requirements they will have to follow when allowed to reopen. The six-foot separation requirement will limit the number of hair cutting stations.
“We will have digital thermometers and will probably have to close our waiting area. I guess the days of a bustling salon are gone,” Cadd said.
The Healdsburg Center for the Arts received a 50% rent reduction in April, but still had to lay off its executive director. “We will be persistent in asking for rent help,” said board chair Scott Lindstrom-Dake. “Landlords are feeling the pinch too, but some rent is better than none.”
The chamber is hosting a Zoom meeting with county supervisor James Gore this Friday morning (May 15.) Register on the chamber’s website to participate.