Little Rock shops try to do without customers

Pedestrians cross President Clinton Avenue around lunch hour in downtown Little Rock on Wednesday. The usually busy street was mostly devoid of traffic.  Full coverage of coronavirus at arkansasonline.com/coronavirus/.
(Arkansas Democrat-Gazette/John Sykes Jr.)
Pedestrians cross President Clinton Avenue around lunch hour in downtown Little Rock on Wednesday. The usually busy street was mostly devoid of traffic. Full coverage of coronavirus at arkansasonline.com/coronavirus/. (Arkansas Democrat-Gazette/John Sykes Jr.)

This was scheduled to be a week to celebrate economic development in downtown Little Rock, but small businesses in the area are on the sickbed as they adapt to the new virus economy.

Nearly every business is being affected in some way: Banks and retailers are shortening opening hours; restaurants are shifting to take-out and delivery services; hotels have fewer customers staying overnight.

To beat back the economic impact of the coronavirus, Gov. Asa Hutchinson has declared the state an economic disaster area so that small businesses can become eligible to apply for U.S. Small Business Administration loans. The governor on Wednesday also pledged to shift other federal and state funds to support businesses as they struggle to get customers into their shops and restaurants.

Just last week, the Downtown Partnership was running through final preparations for its annual meeting, which was scheduled for Tuesday along with hundreds of other meetings and public events in Central Arkansas that also have now been canceled.

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"Just a week ago we were looking at long-term plans for the coming year and the coming decade and the great things ahead," said Gabe Holmstrom, executive director of the Downtown Partnership. "Things have been changing rapidly."

The organization, like other business-support groups, has reached out to downtown businesses to help them share best practices that work in the new environment and to find out what support the businesses need to remain healthy.

"The true impact of all this remains to be seen," Holmstrom said. "Right now, it's first things first -- we have to see how the next few days and weeks shake out."

Businesses are adjusting to the new dynamic: trying to keep sales moving forward when they can't put customers in the seats -- or in the beds, as is the case with one of downtown Little Rock's newest businesses, the AC Hotel.

Travel is shrinking, driving down occupancy at hotels nationwide. The AC Hotel has been especially hard hit -- the 114-room facility had fewer than 10 guests Wednesday. "We're definitely in unchartered territory for the hospitality industry," said General Manager Josh Castle. "I've been in the industry more than 10 years and I've never seen single-digit occupancy. The hotel is absolutely dead."

The AC, opened for just over a month at Capitol Avenue and Louisiana Street, was off to a rollicking start. "We were doing pretty well with our promotions and attracting attention until the bottom dropped out in the last week or so," Castle said.

A restaurant and bar in the hotel have been closed and the recreation center is shut as well. Staff members are spending time cleaning and sanitizing frequent touch points to maintain healthy conditions.

In the Heights, The Toggery owner Jon Holcomb got in the driver's seat -- literally -- to keep his business going. Holcomb formed an army-of-one delivery service and this past week began dropping off orders at customers' homes for the first time. The retail store specializing in children's goods has two locations -- the Heights and Pleasant Ridge shopping center.

"We're learning as we go," Holcomb said. "We've obviously seen a decrease in foot traffic so we're doing whatever we can to keep things going."

Restaurants across the city are shifting to an emphasis on carryout orders and delivery services to keep the registers ringing. The industry is especially challenged by the current environment because of its lean profit margins -- any event that cripples sales can be devastating.

"The entire hospitality industry is suffering severe damage and our top concern is for the hourly and front-line workers that make this industry shine," said Montine McNulty, chief executive officer of the Arkansas Hospitality Association. "The long-term consequence is the economic damage this will do to most Arkansas communities where restaurants, lodging and attractions are the cornerstone of their economy and the quality of life."

Uncertainty abounds -- consumers are being urged to continue spending but they're also encouraged to practice social distancing and not gather in groups of more than 10, recommendations that damage retailers, restaurants and other service industries.

"Business loves certainty, and right now, things couldn't be more uncertain," said Arkansas Commerce Secretary Mike Preston. "We don't know what's going to happen in a week or a month or a year. That's what has businesses nervous."

On Wednesday, Preston appeared at a news conference with Hutchinson to announce a financial-stimulus package to help businesses, particularly small businesses, survive the current virus-driven troubles. All small businesses that can prove they have been "significantly and directly impacted" by the virus are eligible for up to $2 million in low-interest loans from the U.S. Small Business Administration.

In addition, Hutchinson advocated redirecting $12 million in Community Development Block Grant funding to support a loan program for small businesses. CDBG funding is typically used for housing or infrastructure development. "Small businesses are worried about making payroll and other issues with liquidity so they don't have longer-term problems," Preston said, noting that the state program should address that need.

The governor also will set aside $4 million in his quick action fund to support small business that provide supply-chain or logistics support to larger business. Individual applicants are eligible for up to $250,000.

The prevailing mood, and rapidly changing conditions, was captured over the past few days by The McNellie's Group, which owns Dust Bowl Lanes & Lounge and Fassler Hall, next door neighbors on East Capitol Avenue in downtown Little Rock.

Dust Bowl began offering curbside food pickup on Saturday, but by Wednesday the business shut down operations entirely. St. Patrick's Day, normally an event that boosts business, was the last day of operations for the time being, the company said in a Facebook announcement.

"Normally, this is Christmas for our company," the St. Patrick's Day posting said. "It's the best day of the year, both financially and in spirit."

This year the virus economy changed the tone entirely. "Today is not that day" of celebration, the notice said. "It feels more like a wake than a celebration."

Fassler Hall is still open and offering curbside and other pickup and delivery options.

Small businesses make up more than 85% of Central Arkansas' companies "and they stand to be particularly hard hit during the coming weeks and months as business as usual becomes anything but," said Jay Chesshir, president and CEO of the Little Rock Regional Chamber of Commerce.

Supporting small businesses today "could mean the difference in a business being able to survive the coming weeks of this uncertain time," Chesshir said.

Business owners are moving swiftly to meet customer needs, Holcomb said. "It's just a really bizarre time to be in business," he added. "All of us are operating in unchartered waters."

Business on 03/19/2020

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