San Diego Business Journal

San Diego County businesses are scrambling to find ways to keep their doors open as the economic impacts of the worldwide coronavirus pandemic begin to take their toll on the local economy.

At the same time, government agencies, nonprofits and private companies and organizations in San Diego are ramping up efforts to assist the business community and the county’s workforce, as an unprecedented health and financial crisis grips the United States and countries around the world.

Jerry Sanders, president and CEO of the San Diego Regional Chamber of Commerce, and a former San Diego mayor and police chief, said he has dealt with natural and man-made emergencies, from the aftermath of the 9-11 terrorist attacks to devastating wildfires. But the current crisis is uniquely challenging, he said.

“This is completely different, it’s moving so quickly and we’re in uncharted territory,” Sanders said.

The chamber quickly set up a special webpage where members and the public can go for updates on available resources for businesses and employees. Sanders also tasked his staff with contacting all the chamber’s 2,500 members — including some 1,500 small businesses — to find out how they are coping with the crisis and what assistance they might need.

“We’re calling as many as we can as quickly as we can. We want to know what they need so we can advocate for them,” Sanders said.

Schools, Businesses Close

Over the past week, school districts across San Diego County have closed their doors in an effort to slow the virus’s spread, and many businesses and organizations have shut down their offices, directing their employees to work from home when feasible. Sporting events have been cancelled, and gatherings of 50 or more people have been prohibited.

At the beginning of the week, county health officials announced a sweeping set of measures, including the closure of all bars, breweries and tasting rooms; an order that restaurants must close their dining rooms and only serve food for takeout or delivery; and a prohibition on visiting patients in hospitals or long-term care facilities. In addition, hospitals must postpone all elective surgeries. Those measures took effect on Tuesday, March 17, and will run through March 31.

As of Tuesday, the county had 55 documented cases of COVID-19, the illness caused by the coronavirus, according to County Supervisor Jim Desmond, who spoke at a teleconference hosted by the North San Diego Business Chamber. Of those cases, 47 were county residents and 8 were non-residents. The U.S. total stood at more than 4,000 cases, up from 600 a week earlier, Desmond said.

As the crisis intensified over the past week, businesses in the tourism and hospitality industry were among the most immediate casualties, with some restaurants reporting their business down by 70 percent, and hotels in downtown San Diego with occupancy rates at 10 percent, officials said. Closures of such tourism stalwarts as SeaWorld, LEGOLAND California and the San Diego Zoo created ripple effects through the local economy.

Restaurants Among Hardest-Hit

Jeff Rossman, owner of two San Diego restaurants, Terra American Bistro near SDSU, and Bunz Burger Joint in Hotel Circle, said he’s had to cut his staff by 60 percent due to the county’s closure order and the drop in business as residents practice “social distancing.”

Rossman, a chef and president of the San Diego chapter of the California Restaurant Association, said he was revamping his menu to eliminate items that require a lot of prep time, as well as items that don’t travel well. He is also setting up an online ordering portal for customers and creating a family style menu in which entrees and sides are priced by the pound. He’s also thinking of creating do-it-yourself pizza making kits and pre-packaged cookie dough that parents and children can make together.

Customers will have the choice of curbside pickup, coming inside to the bar area to get their orders, or delivery through services such as Grub Hub and Door Dash, Rossman said.

“We’re doing it just to see if it works. If not, our next alternative is to close completely,” Rossman said, noting that it’s a two-way street – his restaurants can feed people who may have limited access to food during the crisis, and residents can support local businesses such as his. “We’re trying to be socially responsible and stay in business.”

The local chapter of the restaurant association on Tuesday sent out an email survey to its 1,000 San Diego members to find out if they are remaining open and if so, what services they are offering, Rossman said. The group plans to compile the information and put out a neighborhood guide to restaurants for the benefit of customers.

Rossman acknowledged the stress he’s under as he works to keep the lights on at his businesses, which he has built over the past 22 years.

Getting the Job Done

“You put blood, sweat and tears into your business. And something comes along out of the control of everybody, it comes from out of nowhere and stuns the economy,” he said.

Peter Zien, owner of AleSmith Brewing Co. near Miramar Road, who spoke at Tuesday’s business teleconference, said his revenue has been cut by at least 35 percent as restaurants and bars that serve his beer close. But he is still operating a drive-through service and selling packaged product to retailers, and has so far avoided staff layoffs. “We’re trying to keep staff motivated and jamming, people still need their beer,” he said.

“Right now is an opportunity for us to shine. It could turn out to be our finest hour so we are trying to stay motivated and strong,” Zien said.

Organizations Rally in Support

As businesses do their part, a number of agencies and organizations are working together to disseminate information and help both businesses and workers cope with the coronavirus fallout.

Among them is the San Diego Workforce Partnership, which has set up a hotline — at 619-228-2982 — that will be open during business hours Monday through Friday to answer questions from business owners and workers, said Andrew Picard, chief programs officer. The agency has also updated its website to include resources for businesses and workers.

One key resource, he said, is the Work Sharing Program, run by the state Employment Development Department. The program is aimed at helping businesses retain their workers, allowing them to cut their hours by up to 60 percent, with the employees able to receive unemployment benefits to make up for at least part of their lost wages. State disability and paid family leave benefits are also available to help workers, Picard said.

The Workforce Partnership can help businesses enroll in the Work Sharing Program, Picard said. Gov. Gavin Newsom has waived the normal one-week waiting period for unemployment benefits, and businesses can also request a 60-day extension for filing payroll taxes, Picard said.

“Right now we are trying to make sure people are aware of these resources and are taking advantage of them before taking drastic steps to reduce their workforce,” Picard said.

Government agencies at all levels must do what they can to support businesses and workers during this crisis, Picard said. “We have every indication this is going to have profound impacts on our economy.”

Another agency offering support to local companies is the U.S. Small Business Administration, which has an office in downtown San Diego.

The SBA offers disaster loans to businesses that have suffered economic injury as a result of the coronavirus pandemic, said Mike Sovacool, deputy district director of the agency’s San Diego office. The money can be used by businesses to cover operating costs until economic conditions improve.

Nationwide, the agency has $50 billion to fund the loans, which can be made up to $2 million, for a repayment term of up to 30 years. Interest rates range from 3.75% for businesses to 2.75% for nonprofits, Sovacool said.

Businesses can apply for the loans online, or by calling a special hotline at 800-659-2955, Sovacool said. Applications take two to three weeks to process, and once all loan documents are signed, funds can be disbursed in 7 to 10 days.

Phone calls to the agency from business owners have spiked during the crisis, said Sovacool, with most of the callers calm but concerned in the face of the pandemic. But he said the SBA is staffed up and ready to handle the onslaught, as it has during many past disasters, from hurricanes and floods to wildfires and mud slides.

“Providing disaster relief is something the SBA has done for a long, long time,” Sovacool said. “The programs and process and expertise are in place.”

Coalition Launches Response Fund

Also this week, a coalition of public agencies, nonprofits and companies announced a COVID-19 Community Response Fund, which had reached $2.3 million by Wednesday, including a $1 million donation from San Diego Gas & Electric. The San Diego Foundation will make grants to local nonprofits, which will in turn use the money for food assistance, rent and utility payments and gap funding for lost wages for San Diego County residents. Grants will also be made to struggling nonprofits.

SDG&E has announced it will not disconnect service for nonpayment, and will waive late fees for businesses, as well as set up flexible payment plans for customers struggling to pay their bills.

Cox Communications has announced similar measures, waiving data usage overage charges until May 15 as customers work and study from home, not terminating residential or small business customers for being unable to pay their bills during the crisis and waiving late fees.

On Wednesday, the South County Economic Development Council announced it will offer one-time $5,000 loans with no monthly payments and zero percent interest to assist eligible restaurants in South County during the COVID-19 pandemic. Repayment will be due April 1, 2021, and a total of 50 loans will be provided.