Adapt or else: Downtown businesses cope with new realityTuesday, September 14, 2021
NEW YORK (AP) — Downtown businesses in the US and abroad once took for granted that nearby offices would provide a steady clientele looking for breakfast, lunch, everyday goods and services and last-minute gifts. As the resilient novel coronavirus keeps offices closed and workers at home, some are adapting while others are trying to hang on.
Some businesses are already gone. The survivors have taken steps such as boosting online sales or changing their hours, staffing levels and what they offer customers. Others are relying more on residential traffic.
Many business owners had looked forward to a return toward normalcy this month as offices reopened. But now that many companies have postponed plans to bring workers back, due to surging COVID-19 cases, downtown businesses are reckoning with the fact that adjustments made on the fly may become permanent.
In downtown Detroit, Mike Frank's cleaning business was running out of money and, it seemed, out of time.
Frank started Clifford Street Cleaners eight years ago. Pre-pandemic, monthly revenue was about $11,000, but by last December, when many downtown offices had to close, revenue had dropped to $1,800, Frank said.
Frank had to borrow money from his wife to pay the bills. “It got down to, I was almost ready to go out of business.”
Instead of shutting down, Frank adapted. He converted part of his store into a small market with toothpaste, laundry detergent, shampoo, bottled water, soft drinks and other essentials. He also delivered clean laundry and goods from the store.
Eventually, some foot traffic returned. With the combination of retail sales and dry cleaning, revenue is back up to about $4,100 per month, he said. That's enough to keep him afloat, and the figure is improving each month.
In Lower Manhattan, 224 businesses closed their doors in 2020 and 2021, according to the Alliance for Downtown New York. About 100 have opened.
“There's no question, it's hard for business districts like ours; we miss our workers,” said Jessica Lappin, president of the Alliance for Downtown New York. “Nobody misses them more than local businesses.”
A block from Wall Street, Blue Park Kitchen used to have lines out the door each weekday as office workers waited to buy one of the grain bowls Kelly Fitzpatrick served as a healthy lunch option.
“Things are completely different,” she said.
Online orders now account for 65% of the business — although they are less profitable because the online apps take a cut. Higher-margin catering orders remain non-existent and Blue Park has reduced its staff by nine workers.
“At our peak in July 2021 (before the Delta variant surge), we had about 65% of peak pre-COVID business,” Fitzpatrick said.
Fitzpatrick has seen more offices reopen and hopes more companies return in October, before the slower holiday months of November and December.
Jorge Guzman, assistant professor of business management at Columbia University, said the shift of economic activity away from downtowns is likely to last. There has been a boom in entrepreneurship in non-downtown New York areas like Jamaica, Queens, and the South Bronx.
“Downtowns are not going to die, exactly. It's not like Midtown's going anywhere. But it's going to be a little bit more of a mix, more residential and mixed-use concepts.”