Hoping for business: Steamboat shops have started to receive COVID-19 relief funding. Will it be enough to keep them afloat? | SteamboatToday.com
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Hoping for business: Steamboat shops have started to receive COVID-19 relief funding. Will it be enough to keep them afloat?

Winona's Bakery and Restaurant, a popular restaurant in downtown Steamboat Springs, has been shut down since mid-March as a result of the COVID-19 pandemic. While federal stimulus money has assuaged some of the economic impacts of widespread closures, business owners said they need to return to some sense of normalcy to survive in the long term.
Derek Maiolo

STEAMBOAT SPRINGS — For the past month, Jamie McQuade has been looking for ways, any way at all, to stay busy.

The owner of Winona’s Restaurant and Bakery spent most of Thursday cleaning and doing minor renovations to one of Steamboat Springs’ most well-known and long-standing restaurants.  It was one of the first local businesses to close its doors as COVID-19 spread into the community, a decision McQuade made for the sake of her employees and the safety her customers.  

Immediately, she had to cut her staff from 22 full-time employees to eight. Without hungry mouths to feed, her remaining staff has struggled to find enough tasks to fill their shifts. 

“It’s not exactly business as usual,” McQuade said.

Despite not having any customers, she still has bills to pay, from payroll to rent and utilities. Finding the money for those expenses has been like trying to grow a garden without any water.

While she hopes to reopen Winona’s when the laws allow, it is unclear to what extent the restaurant could operate or what business would look like under the new guidelines. 

Looking to the summer months, when McQuade depends upon a busy tourist season to make the bulk of her business, a cloud of uncertainty looms. No one, not even the country’s leaders, know exactly what the future brings, and optimism is hard to find.

“It is scary what’s coming,” McQuade said.

Help from the government

As the nation took drastic steps to slow the spread of COVID-19 — shuttering businesses and restricting people to their homes — concerns over the economic fallout were at the top of people’s minds, surpassed only by the fear of losing more lives to the pandemic.

Hundreds of thousands of people lost their jobs. Business owners lost sleep over how to make ends meet. Among the saddest stories are those about people who took their own lives due to the panic, isolation and financial hardship.

In an effort to keep industries afloat, the federal government passed the Coronavirus Aid, Relief, and Economic Stimulus (CARES) Act on March 27, a $2 trillion stimulus package meant to staunch the economic bleeding. A major provision of the CARES Act included the Paycheck Protection Program, which authorized up to $349 billion in forgivable loans to small businesses to pay their employees during the pandemic.

That funding quickly ran dry, and millions of companies were unable to get their applications approved. The program also received criticism for failing to help businesses that needed it most after news surfaced that large restaurant chains received big payouts, while many smaller companies got nothing.

On Thursday, Congress approved an additional $484 billion package, which President Donald Trump endorsed earlier in the week. Most of the money would go toward the Payment Protection Program, with additional funding for economic disaster loans, relief for hospitals and improved testing for COVID-19. 

Through the help of Yampa Valley Bank, McQuade was able to receive funding through the Payment Protection Program, which will cover eight weeks of payroll. On Thursday, she also got a $10,000 grant through the small business loans. McQuade is grateful for the money, but she said it will not be enough to make up for the damage. Her business lost $100,000 of estimated revenue for the last two weeks of March alone, she said.

The $10,000 grant does not even cover one month of Winona’s expenses, according to McQuade. What frustrates her most is the lack of clear guidance from the federal and state government about how to plan for the weeks and months ahead. Summer is the most lucrative time for the restaurant, when people are lining up to wait for a table or arriving early to snag some of the coveted baked treats. She relies on the busy months to get through the rest of the year.

“Without that volume, it will be really hard to pay our bills,” McQuade said.

Assessing the damage

McQuade is not the only local business owner worrying about how to endure the pandemic.

During a presentation to the Routt County Board of Commissioners on Wednesday, John Bristol, economic development director with the Steamboat Springs Chamber, painted a grim picture for the state’s industries. 

He cited the latest Leeds Business Confidence Index from the University of Colorado Boulder, which he described as the leading authority on the subject. Looking ahead to the second quarter, from April through June, respondents recorded the sharpest single-quarter decline of confidence in the index’s 17-year history. The vast majority, 86%, of the 423 businesses that participated stated COVID-19 as the reason for their pessimism.

Business confidence for the second quarter of 2020 dropped at a historic rate, according to the latest Leeds Business Confidence Index. It marks the sharpest decline in the index’s 17-year history, rivaled only by the Great Recession of 2008.
Source: University of Colorado Leeds School of Businesss

The findings point to the belief that even when some businesses can reopen, it could take months of further economic turmoil before profits and jobs might begin to recover.

Bristol also discussed a survey the Chamber sent to local businesses asking how long they could stay open under a complete or partial shutdown. Of about 250 respondents, 11% estimate they could survive just one to five weeks. Another 27% said they could last six to 10 weeks. Less than half of businesses, 44%, said they could survive longer than 11 weeks. 

“The longer this goes on, the harder it is going to be for them,” Bristol told the commissioners.

One ray of hope has been the success businesses have seen in receiving government stimulus money. Through the help of local banks, Routt County has secured about $60 million in relief funding, Bristol said. Access to capital is the primary type of assistance local businesses need, according to the survey, to cover bills and plan for a reopening.

What remains unclear is what happens when that stimulus money runs out in the coming months and how quickly the economy could return to a sense of normalcy.

Commissioner Tim Corrigan spoke of approaching an “impending cliff” in the next two to three months when the absence of further relief funding could leave businesses scrambling for money. 

Source: Steamboat Springs Chamber

Economists do not yet have a comprehensive sense of how severely the pandemic has besieged the U.S. economy. Brian Lewandowski, executive director of the Business Research Division that conducts the University of Colorado’s confidence index, said that national GDP could see its worst fall since World War II. 

Mountain communities like Steamboat could face severe consequences, Lewandowski added, due to a lack of strong economic diversification. The city’s primary industries, namely tourism and service, are expected to suffer among the largest losses due to the pandemic

As Corrigan said during Wednesday’s meeting, “There is not a lot of good news to go around these days.”

Finding a new normal

The question on many people’s minds, from business owners to the unemployed, is when life might return to a sense of normalcy. Normal, meaning the ability to enjoy things like concerts, farmers markets and happy hours after work — or a job to work in the first place. 

Starting Monday, Gov. Jared Polis plans to transition the state from a stay-at-home order to a safer-at-home phase. This will allow some businesses, such as salons and retail stores, to offer services as long as they have health measures in place to protect employees and customers.

Barb Porteous, who owns 10th Street Barber Shop, one of Steamboat’s most popular places for a haircut, plans to reopen next week. Due to a lack of clarity over what policies she needs to implement to keep people safe, she is waiting until Friday, May 1, before offering services. 

Customers likely will need to wear face masks, Porteous said, and no one will be allowed to wait in the shop. All of the barbers also will wear masks along with protective gloves. Many other details of how her business will operate remain unclear, such as if barbers will start taking reservations.

“It’s such an odd time, and nothing like this has ever happened before,” Porteous said.

Other businesses have tried to find creative solutions to navigate the restrictions. Déja Vu Boutique, a local consignment shop, has been posting videos on its social media to give virtual fashion shows of the available clothing. Some restaurants have been mixing cocktails to offer alongside their food options for takeout and delivery. 

An announcement will be coming soon with info about limited shopping and consignment hours next week! These items are among hundreds of others are ready for a new home!

Posted by Deja Vu Boutique Steamboat Springs CO on Wednesday, April 22, 2020

Johnny B. Good’s Diner, a longstanding restaurant downtown, has completely revamped its business model to offer not only its standard fare, but also groceries, such as produce and meat. People can see the options and place an order at us.orderspoon.com/johnny-b-goods-diner

Lisa Popovich, executive director of Main Street Steamboat Springs, said these examples reveal a harsh truth to surviving these difficult times.

“Businesses that innovate, that find opportunity in the challenge, will succeed,” she said. “Those that give in will fail.”

Her nonprofit organization has been hit hard, too. About 80% of Main Street Steamboat’s funding comes from events like the farmers markets and vehicle rallies. 

“A lot of those aren’t going to happen this year,” Popovich said. 

Despite the bleak circumstances, she refuses to give up. Her organization received $12,000 through the Payment Protection Program, which will cover payroll for two months. In that time, Popovich plans to come out with a guide to help people shop safely amid the pandemic. It will be crucial, she emphasized, for people to continue to act responsibly in order to continue easing restrictions.

Popovich is looking for other creative ways to support local businesses.

“Now is not the time to pull back on everything we do. It’s time to work harder and work faster to help downtown be all it can be,” she said.

Through it all, Popovich is trying to stay optimistic. She talked about the possibility of a “renaissance for small businesses,” in which locals will flock to downtown shops that sometimes are seen as tourist traps. She encourages customers to peruse stores they may have avoided in the past and speak up if shops do not carry what they are looking for. 

It is that opportunity for social connection that Popovich hopes will prevail as businesses open their doors again.

“Now that we have been in our homes for — I don’t know how long it’s been — it will be hard for us not to run toward each other,” she said. “We need human connection. Those businesses that can connect will be successful. I think we are all longing for that right now.”

To reach Derek Maiolo, call 970-871-4247, email dmaiolo@SteamboatPilot.com or follow him on Twitter @derek_maiolo.


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