Eight downtown Columbia businesses have permanently closed since the coronavirus pandemic shut the city down in the spring, but Executive Director of the Downtown Community Improvement District Nickie Davis believes the worst is yet to come.
Davis gave the Downtown Leadership Council a full report Wednesday on the impact of COVID-19 on businesses in The District. It was the first time the council had met since February. It heard not only from Davis but also from City Finance Director Matthew Lue.
“Obviously, COVID threw a wrench in everybody’s lives,” Council Chairperson Scott Wilson said.
Davis said only three businesses — Formosa Restaurant on Broadway, Bambino’s Italian Café on Elm Street and Cha Boutique on Ninth Street — specifically cited the pandemic as their reason for closing. She also expects Kaldi’s Coffee on Ninth Street to close.
While eight of more than 600 businesses in The District might seem like a low number, Davis expects most of the closures will come in the next few months.
“As optimistic as eight businesses is, I think we’ll see more,” Davis said. “Right now is when we’re going to see these businesses close.”
Davis said businesses behind on rent and utility bills will soon face serious challenges. She also worries public empathy toward struggling small-business owners is fizzling, as people are becoming more accustomed to life in the COVID-19 age.
In a May survey, Davis said, businesses reported overall revenue was down 80% or more in April this year compared to April 2019. They also reported losing more than 80% of their staff.
Eighty-two percent of businesses reported curbside pickup was the only way they were making money. The survey was done while the city and county’s stay-at-home orders were still in place.
Davis told the council she’s uncertain how things will look when college students return to campuses. She thinks downtown employees can help set a good example when it comes to health and safety practices.
“These students are looking to these bartenders and these bouncers as kind of like guidance almost,” she said. “They see them as trendsetters, so if they are enforcing these and following it as seriously as they should be, I think the student population will start to understand that.”
She emphasized another stay-at-home order in the fall would be devastating.
Davis said the improvement district is working hard to alleviate the stress downtown businesses are feeling and to help keep them afloat. It has worked with the city to reserve metered parking spaces for curbside service, something the leadership council members said they would urge the City Council to continue.
The improvement district also is exploring the idea of closing off streets to allow outdoor seating for bars and restaurants. That’s complicated, though. When Fourth Ward City Council Member Ian Thomas floated the idea early in the pandemic, City Manager John Glascock said the primary challenges would be traffic flow and access to streets for emergency responders.
Making gift cards available that could be used at any business in The District is another idea. A similar effort failed in the past, Davis said, because the balances were tracked on paper and became a logistical nightmare.
Davis said The District is also looking to make certified public accountants, bookkeepers and website designers available for businesses to use for free.
The District is also taking steps to keep employees safe. It offers education and free masks to businesses that need them. The biggest thing, Davis said, is that cleaning crews are working hard to sanitize The District.
“Pretty much anything you can touch downtown, they have been sanitizing aggressively,” Davis said.
She worries, however, that they’ll have to shift to cleaning up litter when students return.
The Downtown Community Improvement District itself faces a grim revenue situation. The majority of its revenue comes from sales tax, and the budget it submitted to the City Council earlier this month projected a 47.9% shortfall in sales tax revenue this year and only $329,861 in collections for fiscal 2021. Overall, it expects revenue next fiscal year to be 31.6% less than originally budgeted for this year.
Lue spoke to the group about the city’s revenue problems. He said that before the pandemic, the city was already suffering from lagging sales tax revenue, largely because of the rise in untaxable online sales.
The city is projecting 10% less sales tax revenue than anticipated this year, and Glascock has said he expects COVID-19 will have a long-term impact on the city’s economy. Glascock will present his proposed city budget for fiscal 2021 on Friday morning.