Reinventing and reemerging
Virtually every small-business owner in Ashland who was able to find enough money to stay afloat through the COVID-19 wasteland that was March, April and May — and not all of them did — has a story to tell.
And while most of those tales share themes of exasperation, dread, confusion and uncertainty, outliers also emerged.
Bloomsbury Books co-owner Sheila Burns had plenty to look forward to heading into what was anticipated to be busy spring/summer season. Besides the anticipated bump in sales, Bloomsbury’s 40th anniversary promised to be a joyous occasion. Then the virus hit, Gov. Kate Brown announced a series of executive orders, and suddenly Brooks found herself delivering books around Ashland in a desperate attempt to keep her store’s head above water.
It was April, the month she was supposed to be celebrating, and Burns was instead stuck behind the wheel, navigating the ghost town that Ashland had become in order to drop off a paperback which yielded just enough profit to cover the gasoline that got her there.
“I was thinking, this is going down the tubes,” she said.
She found the house, knocked on the door and handed over the book to a longtime customer, but as Burns turned to head back to her car, the woman said wait, she had something else for Burns. She came back with a check for $5,000. It was money that was supposed to fund a trip to London, where it would have been spent on the arts. But since the trip was off, she figured, why not spend it on her favorite access to the arts in Ashland?
Burns was floored. Then it happened again. And again.
“It was just like, this is really important to the community and it was so inspiring,” she said. “And then another woman, completely unrelated ... gave me another big check. It was just so wonderful, because the other thing was, we weren’t getting the (Paycheck Protection Program money). Even though we’ve been here for 40 years, we just weren’t getting any money even though I applied for it. Nothing was coming in. And then Blackstone Audio, they gave us a check for $2,000. They just wanted to make sure we were staying in business. I will shop from them forever.
“And so that was the turning point for all of us, but particularly for my partner [Karen Chapman] and myself to realize that we are going to endure. We are just going to be the community bookstore. People wanted a bookstore in their community. And so we started doing really well, we started figuring out how we could pay our bills and how to get the right books in.”
They had also smoothed out the wrinkles in their curbside pickup and delivery services, making six to eight deliveries a day, including one all the way up to Mount Ashland. Burns credits a pair of dedicated Southern Oregon University students who had put in long hours filling orders while the store was closed to the public. She also noted the significance of Amazon’s decision to de-prioritize books, a move that for once made the online giant by far the slowest option around for book delivery.
And then in another surprising twist, the PPP loan from the Small Business Administration for which Burns and Chapman had applied finally arrived, a “thrilling” bit of news that came on the heels of Oregon’s phase two reopening June 5.
“But by then,” she said, “I knew we could do it anyway.”
‘There was a lot of anger’
Oberon’s Bar and Restaurant owner Andy Card also knew he could do it. As in, he could afford to remain closed for what amounted to two months, if that’s what it came to. Yet to be determined as March turned into April, however, was whether it was in his best interest to do so.
The arguments against filled his computer monitor with ugly charts and red numbers every morning. Restaurant owners live, breathe, eat and sleep their restaurants, he said, and to get hit with a pandemic not two years after another surprise business-killer, smoke, delivered its own sucker punch was infuriating.
“There was a lot of anger,” he said, “and not toward anything in particular. Just, how could no one have prepared for this? You’d have moments like, ‘What was the federal government thinking not tackling this right away?’”
Like other restaurant owners in Ashland, the challenge facing Card was that he purchased food and supplies on credit, knowing that sales would allow him to cover those costs when the bills came due three weeks later. Rent, utilities and music license fees don’t vanish just because a new virus has figured out how to use fusion to inject its RNA into a host cell, an argument that Card made to Ashland City Council in a plea for grant money in early May.
His landlord gave him a break on rent, easing at least one burden. Card declined to be specific when asked about the discount, but Burns, who owns five buildings including her own, said she’s reduced rent by 50%, a figure that’s consistent with what other landlords have proposed.
Other bills still loom. The city of Ashland has allowed customers to defer utility payments with no late fees, provided they sign up for a six- or 12-month repayment plan. Similarly, the due date for the Transient Occupancy Tax was pushed from April 25 to Aug. 1, and the Food and Beverage Tax from April 30 to Aug. 1.
Helpful, Card says, but not nearly enough.
“You cut as much expenses as you can,” he said. “If you’re going to have zero revenue, you shut the place down. ... So, yeah, you lose sleep over it because you think, is your business gone? Are we going to lose everything? We work seven days a week, 10-hour days.
“Then you just realize, ‘OK, well this is it,’ and there’s literally nothing I can do except just wait and spend as little money as possible in our personal life. ... Then you go through this phase of ‘OK, you’ve accepted it’ and you’re just living a very modest lifestyle, and then you just try to enjoy your day because you don’t have any work to do.”
It was during that nebulous void between the March 17 executive order that closed restaurants and bars and the May 15 phase one reopening that Card received a call from friend and fellow restaurateur Kevin Broadie, owner of Eleven on the Creek. Broadie wanted to put together a private Facebook group that local business owners could use to connect, bounce ideas around and perhaps unload their shared misery. The product of that conversation, Ashland Oregon Small Business Collaborative, had 117 members as of Monday morning.
“It was almost my therapy going on there,” Card said. “Everything I was learning, I was updating the group. It almost gave me a purpose, having that. Because I think our skill set is being able to read complex information and synthesize that, explain it to others who may not be strong in those areas.”
In a sign of the times, Broadie announced June 18 via Facebook that Eleven on the Creek was shutting down.
Frustrating Card almost as much as Ashland City Council were the writers of the Coronavirus Aid, Relief, and Economic Security Act, which he said was, at a whopping 335 pages, so restrictive and unnecessarily complicated that he almost had to hire an accountant to translate it. He applied immediately and received a PPP loan April 15. Initially, the CARES Act rules stipulated an eight-week window in which to spend the money, and for the loan to be fully forgiven 75% needed to go toward payroll.
Those constraints have since been altered. Now, 60% of the funds must go toward payroll, and the employer has 24 weeks to spend it. That came as a huge relief to people like Card who couldn’t refresh their web browsers fast enough while researching possible changes to the legislation.
“Here’s an eight-week solution for a potentially 12-month problem,” he said of the pre-mutated CARES Act.
Before the change from eight to 24 weeks, Card’s plan was to open the restaurant then dump the money right before the deadline on payroll and bonuses. That way, at least he would be able to keep the 25%, which was needed to cover rent and utilities.
The changes to the CARES Act helped smooth the reopening once Oregon’s phase one kicked in, but other segments of the legislation — namely, the parts related to unemployment benefits — created new problems its authors may not have considered.
“It’s hard, because now everyone is making all this money and not working,” Card said. “So, the challenge is how do you get them back? ... At Oberon’s everyone came back. At Masala, we lost three of 13 people.
“A group of people were excited to come back, a group of people were hesitant, and I get it. I think more so, they felt like, ‘Hey, I’m getting out of debt, I’m building my savings.’ I would say that with our staff, I think it had less to do with it was nice sitting on the couch and collecting money. It was more that they were getting so much money that they could actually start solving more of their problems. So I have total respect for that.”
An Easter like no other
Just up the street, Paddington Station mother-daughter co-owners Pam and Kelly Hammond had a completely different set of problems. After laying off everybody but General Manager Joe Collins, the Hammonds knew that, like Burns, they would have to develop an efficient curbside pickup and delivery system, and they’d have to do it fast. That happened in time for Easter (April 12), one of Paddington Station’s most important holidays of the year. Their method was a miracle of ingenuity and resourcefulness, exactly what you’d expect from a family who moved here from Los Angeles in 1992 and quickly turned what had been a struggling gift shop into a winner, quadrupling annual sales by 2009.
Using a dedicated cellphone line, customers were instructed to text orders complete with pictures, if need be. Greeting cards proved to be the most challenging because they required a back-and-forth text chain to find a winner, all for a net profit of about $4 per card. Pam Hammond said she brought back some of the staff to help build custom Easter baskets, which were also hand-picked thanks to the miracle of smartphone technology. The process was a multitasker’s fantasy — this color dinosaur for a 6-year-old boy, and that color candy for an 8-year-old girl, and don’t forget the allergies, or the $30 budget. Now go!
“And they’d say, ‘Yeah, you nailed it,’ or they’d say, ‘That pink uniform is way too pink, do you have one that’s not that pink?’” Hammond said. “And then he would go sub it out.”
Hammond estimates that business was down 60% to 65% in March and 85% in May. The days were as long and hard as ever, but the actual business didn’t reflect that.
“So many sleepless nights early on, I just could not sleep,” she said. “I just sat there and thought, ‘Oh, my gosh, I just ruined 40 lives, I had to lay them off. To the next thing, ‘Oh, my gosh, am I going to be able to keep my business?’ I have worked so hard at it; I am obviously near retirement age, I’m 64. And my daughter is going to be in the driver’s seat soon. And I am not going down now. I put too much into this. I am not going to walk away from this.”
Hammond said her “team” had the same mentality, which helped keep her spirits up.
Good news came in bits and pieces. She credits People’s Bank with helping her become one of the first locals to receive a PPP loan. She also applied for an Economic Injury Disaster Loan through the Small Business Administration and was thrilled to receive the maximum amount — $150,000, which must be repaid over 30 years at a low interest rate.
One change that may have been neglected before but became a necessary upgrade in the wake of COVID-19, Hammond said, was Paddington Station’s website. It was fine for promoting the stores, but completely useless for making purchases. That changed during the shutdown, during which the Hammonds aligned with Shopify and began the arduous process of inputting products. Collins was the front man for that effort.
Considering how bleak things looked only weeks earlier, the quick foray into the E-commerce game provided a reason for optimism. She knew she wouldn’t come out ahead when it was all over, but at least, Hammond figured, the company would be better positioned for the next disaster. Finally, things were looking up. Then, Paddington Station’s checking account was hacked.
Looking back at the breach, Hammond threw up her hands and exhaled a mask-covered laugh. Everything has since been put right, credit cards reissued, numbers changed. And really, when you’re trying to survive a pandemic, what’s a little identity theft?
“And I am proud to say we had our 100th sale three days ago,” she said of the online store. “You might go, ‘Pam, that’s only 100 sales.’ I’m gonna say ‘no, that is 100 victories.’ We reached out to 100 people that found our new E-commerce site, found products on it, and we have about 2,500 items on it now.”
No more deferments
For Arden Forest Inn co-owners Corbet Unmack and William Faiia, navigating their way through the COVID-19 economy has proven to be far more difficult. For them, sources of stress go far beyond the zero-income reality. Faiia has been approved for CARES Act assistance, but 11.5 weeks later — in mid-June — Unmack was still waiting. The day before he was interviewed for this story, he dialed the CARES Act hotline 200 times and got 200 busy signals. Over the previous week, he said, he’d been on hold four hours or more.
The PPP loans that have been a godsend for other small-business owners aren’t on the table for Unmack and Faiia, because their one employee is seasonal and had not started before the shutdown.
In late March, the longtime partners knew they had better be up front with their bank and try to get a deferment on their mortgage payment. They did, but only for two months (the deadline’s weeks away). Suddenly, their retirement plan was slipping away.
“Now they’re saying we can’t do any more deferments,” Unmack said, “and we’re getting notices that they’re going to have to take severe action because we’re not paying.”
When Faiia required a transplant eight years ago, it ended up costing $500,000 out of pocket — enough to wipe out their savings. They were saved from bankruptcy, which amazes Faiia. But the executive order prohibiting large gatherings and thus shutting down Faiia and Unmack’s bread and butter, the Oregon Shakespeare Festival, may be too much for local bed and breakfasts to overcome.
“And now we’re in this mess and there is nothing to fall back on,” Faiia said. “We had hoped to sell this place — it is on the market actually now. Our plan was to sell it and reinvest in some income property like an apartment building or something like that because we blew everything else. That is our only retirement plan at this point.”
With little to do but wait and hope for the best, Unmack said he’s trying to stay positive. But that’s hard to do when the cancellations keep coming. So far, they’ve been able to convince at least some customers to accept an open-ended voucher redeemable anytime next year rather than a refund on their deposit. Still, Faiia and Unmack have had to refund over $12,000 in deposits.
How can they afford that with no income to speak of? The answer conjures images of a bridge-maker laying down planks just before his next step into the abyss.
“You pay two people one month and then the next month you pay a couple more people,” Unmack said.
“It’s like, you have to remember that it’s just a day at a time. After everything we have been through in our life, we still have survived, and there has been a lot of things we have gone through that have been major issues. But again, nothing like this.”
Joe Zavala can be reached at 541-821-0829 or email@example.com.