COVID-19

Sunset Businesses Suffer During Citywide Shutdown

By Erin Bank

Shelter-in-place hurts local businesses. Photo by Michael Durand

On Tuesday, March 17, San Franciscans and residents of neighboring Bay Area counties woke up under shelter-in-place orders, which were put into effect to slow the exponential increase in COVID-19 cases (from 1 case on Feb. 1 to 1,583 cases and 34 deaths on March 27 in the Bay Area).

The State of California quickly followed suit: Gov. Gavin Newsom announced similar measures during a press conference on Thursday, March 19.

By limiting human interactions, called “social distancing,” the transmission of the COVID-19 virus is slowed down. Even if the same number of people eventually get infected, social distancing is important because it can decrease the spike in infection that can lead to overburdened health care systems. If hospitals see fewer cases, they are better able to care for those who are in critical condition in an environment where test kits, protective equipment and essential medical devices such as respirators are in short supply.

Under these shelter-in-place orders, all non-essential businesses must close, which means dine-in restaurants, bars and nightclubs, entertainment venues, and gyms and fitness studios had to shut their doors in a very short amount of time.

In a statement from SF Mayor London Breed, she acknowledged: “We know that this will have a large impact on people’s lives, our economy, our revenues and our small businesses. We will continue to do more to help our residents, workers and businesses through this challenging time.”

In the Sunset District, the degree to which local businesses are being affected varies based on when they were forced to close and their ability to maintain other ways to generate income. But they are all struggling to support their employees and their customers and await an uncertain future if and when they reopen.

Sunset restaurant Underdogs is experiencing a 60% loss of revenue and has had to lay off staff from its two locations (The Taco Shop at Underdogs and Underdogs Too).

Lana Porcello, co-owner of Outerlands Restaurant in the Outer Sunset, explained the impact of the new rules.

“When the mandate was announced on the 16th, our business was downsized from a full-service restaurant to a tiny to-go restaurant overnight, leaving most of our more than 50 employees without work,” she said.

Restaurants and cafes are adjusting their business models to allow for take-out orders and gift card purchases, but these methods produce only a small percentage of their normal revenue.

Even businesses that do not typically have a separate online presence are turning to alternative revenue streams.

“Our store is closed, so sales were non-existent until I launched our website shop,” said Kathryn Grantham, owner of Black Bird Bookstore. Her business model previously did not include online ordering, so she has had to pivot in a very short amount of time.

City and state measures to support businesses and employees help buffer some of the challenges, but gaps and bureaucratic obstacles remain.

“The City has done nothing. There has been no financial relief that helps my business,” said Doug Marschke, co-owner of Underdogs.

“While we [Outerlands] respect and uphold the important public health decisions our city has needed to enact, like many small local businesses we, along with our staff and vendors, are facing serious financial challenges,” said Porcello.

“Gordon Mar’s office has been great about checking in and sending out info on resources,” said Grantham. “There are still many questions that remain open. I understand the city is trying to figure it out as quickly as possible, but there are many business tax and relief issues and other questions that remain unanswered that are specific to small-to-medium size businesses.”

State Senator Scott Wiener issued the following statement: “This crisis is unlike anything we’ve ever faced, but we are a strong community and will get through this. We must continue to support each other as we move through the emergency. It’s my job as a senator to shore up our social safety net, and to communicate San Francisco’s needs to the governor and to the legislature. I will keep doing that, and invite feedback and communication from constituents right now about how I can best serve you.”

Wiener encourages citizens to visit edd.ca.gov to access resources available through the State of California, including expanded disability, unemployment and paid family leave benefits. 

Breed’s statement also includes information for struggling small businesses: “The City is establishing a fund to provide immediate relief for impacted small businesses. We will provide up to 100 businesses with $10,000 each in immediate relief. We are also working with private sector financial partners and philanthropy to identify resources like lines of credit and loans for small businesses.”

The San Francisco Office of Economic and Workforce Development has an online guide for employers and employees seeking support during the COVID-19 outbreak, and for anyone wishing to understand the City’s response: http://www.oewd.org/covid19. .

One source of funds, the SF City Option (which appears as a 6-7% “Health SF surcharge on many restaurant tabs), is proving difficult for workers to access, according to Porcello.

“It seems there is no more appropriate time for health funds to be released to the SF workers who earned them,” Porcello said, “but unreasonable restrictions in the claims process and general bureaucratic challenges have (historically and presently) made worker access to funds extremely difficult. We are calling on the city to lift these restrictions and allow workers immediate access to these essential funds during this public health crisis.”

This uncertainty and fear for what the future holds are echoed widely.

“The restaurant industry is up against unique challenges resulting from extended closure, which will likely result in many permanent shutdowns,” Porcello said. “For businesses that survive, we anticipate debt loads that far exceed income resources, narrowing of an already slim workforce, and gaps in the supply chain due to the effects of closures on industry vendors and services.”

At Underdogs, Marschke’s fears include paying bills, making payroll in the short term and finding a source of cash when all the delayed bills are due.

In the face of the enormous challenges these businesses are experiencing, they remain committed to their neighborhoods and customers and ask for continued support during the shelter-in-place order.

“The encouragement and support we’ve received from friends, neighbors, guests and fellow businesses has buoyed our spirits and kept us going in so many ways through the past couple of weeks,” Porcello said. “We feel incredibly grateful to be a part of this enduring community.”

Underdogs and Outerlands both emphasize the importance of online ordering and purchasing gift cards, as well as keeping each other safe and engaged with lawmakers.

“Stop the spread of COVID-19! Make sure you follow the shelter-in-place rules and social distancing,” said Marschke. “If you feel comfortable, order delivery or take-out from us, or purchase gift cards for a later date.”

Porcello encourages everyone to reach out to local representatives. 

“It’s imperative that our city leaders hear what we are going through and what the community needs,” she said. “Also, support of your neighborhood businesses via gift-card purchases or online sales is critical for preserving the San Francisco neighborhoods we love.”

“The fragility of small businesses is real,” Grantham said. “If we want SF to reopen with the same character and unique shopping areas, we need to figure out how to support small businesses directly.”

 


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