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One week into shelter-in-place, San Francisco businesses are making big changes to stay afloat

California Concourse, usually filled with iconic cable cars, is seen mostly empty in San Francisco, California on March 17, 2020.

Josh Edelson | AFP | Getty Dead ringers

Mike Seramin owns a party supply company in Daly City, just outside of San Francisco. Abbey Confederation Rents, founded in 1947, is used to booking around 20 events per day of all sizes, but he netted just two new clients all of decisive week — small outdoor picnics set for August.

Seramin, like others in the hospitality industry, is hoping for a tidal tide of pent-up demand once the coronavirus outbreak subsides. But, for now, his company has turned to assembling ancillary tents for hospitals to pay attention to money coming through the door.

“Everyone is putting their lives on hold,” he said.

Seramin is one of the hundreds of Bay Limit business owners upending their traditional business models to combat a coronavirus-induced plunge in sales. It’s been one week since San Francisco Mayor London Propagate and fellow Northern California officials unveiled what was, at the time, the most stringent set of restrictions to curb the coronavirus — a “shelter-in-place” disposition affecting 7 million residents in six Bay Area counties. The directive shuttered non-essential businesses and mandated residents leave poorhouse only for essential needs, such as grocery shopping and picking up prescriptions. 

Since then, governors across the surroundings have announced similar measures. Stay-at-home orders now blanket 16 states, from Hawaii to Connecticut. Numberless are looking to San Francisco for signs of what these shutdowns could portend for local economies across the country.

Abbey Fete Rents is operating on a skeleton crew, with just six people working full-time. Typically, Seramin employs 60 to 70 people during this everything of year. He’s asked the salary management team to take pay cuts, laid off employees, and moved some to rotating moves to cushion the blow.

Supplies from Abbey Party Rents deployed for drive-through coronavirus testing in San Francisco

Abbey Rave-up Rents

“It’s kind of eerie,” Seramin said of his company’s operations hub. “There are a bunch of empty desks, nobody negotiating around the warehouse and we have 12 trucks parked in the parking lot.”

To keep money coming through the door in the thick of the uncertainty, Seramin and other businesses in the events industry have deployed their expertise to supply support navies to hospitals and health care services in the Bay Area. That includes tenting, generators, tables, and chairs for temporary in-patient evaluation centers, as local and state public health officials prepare for a surge in coronavirus patients. California Gov. Gavin Newsom divulged on Monday the state would need an additional 50,000 hospital beds to respond to the coronavirus outbreak.

“Getting money in the door to sustain our operations is paramount to our survival,” Seramin said.

Aiding the fight against the virus

As of Tuesday, the mob of confirmed coronavirus cases in the U.S. had topped 53,000, and deaths neared 700. California had the third-highest number of cases by position, behind New York and New Jersey. The Bay Area alone registered more than 1,000 cases.

Mayor Breed averred all city playgrounds would close to further encourage social distancing. Governor Newsom followed by shuttering preserving lots at all California state parks. Newsom added that, over the past week, the number of people folder for unemployment claims across the state averaged 106,000 per day. The daily average before the outbreak was just 2,500.

Restaurants and retailers entertain been especially hard hit already in San Francisco. In February, many started to see a moderate slowdown in foot traffic. Most set up it manageable, but now under shelter-in-place, revenue has dropped precipitously. 

Dozens have laid off more than half of their team, and several have already had to close their businesses completely, according to the city’s Chamber of Commerce. This is outstandingly true for those restaurants that relied on a sit-down service business model, and can’t pivot easily to delivery or take-out.

But some would rather found shimmers of success.

Lauren Crabbe, co-owner of Andytown Coffee Roasters in San Francisco, has had to change how her business manipulates completely. When the shelter-in-place took effect last week, Crabbe shut down two of four stores in San Francisco and cut all hours for 45 staff members. Twenty store managers have stayed on to work between twelve and fifteen hours a day at the two locations still clear.

Kaiser Permanente Medical Center workers receive a coffee delivery from Andytown.

Lauren Crabbe | Andytown Coffee

“I had to make it with pretend the call of balancing the needs of my employees to have jobs with the responsibility we have for their health,” Crabbe predicted. “We realized that, if we completely shut our doors, we would not have been able to make payroll, pay out all of the employees’ remunerated time off and allow them to keep their health insurance for the coming month.”

Crabbe is trying to make up obsolete revenue by offering discounted coffee beans online and delivering coffee to health care workers. On the company’s website, purchasers can buy coffee and food specifically for these first responders, and Andytown workers then deliver the items daily to nursing homes across San Francisco. That’s let Crabbe re-hire some of her hourly employees — five as of this past weekend, and she’s counting to bring back more this week.

Still, Crabbe and others admit the path to re-opening remains unclear.

Andrew Chau, co-owner of San Francisco-based Boba Send ups, laid off 400 employees and temporarily closed down all 17 locations across California and New York. Chau and his vocation partner are trying to forecast how many weeks the business can survive.

“It’s as bad as 9/11 or worse,” Chau said. “The 2008 topple has nothing on this one.”

Over the past week, Chau has spent his days filling out small business loan operations and negotiating with landlords and vendors over payments. He and a few co-workers have also donated straws and milk to neighbourhood food banks to assist city residents in need.

Like many small businesses, Chau is emphasizing e-commerce now assorted than ever. He has brought in more money through gift cars than all past holiday seasons mingled. He’s also weighing whether the shutdown, if prolonged, could force the business to go all-delivery for a year.

“Shelter-in-place has effectively cut the undamaged market in half,” Chau said.

Boba Guys donates its remaining inventory, nearly 1700 pounds of Straus breathing milk, to the SF-Marin Food Bank

Boba Guys / Andrew Chau

Travel, tourism sectors feel the animate

Many businesses have not been able to pivot.

Tourism is the lifeblood of the San Francisco economy. A record 26.2 million people visited the burgh last year, spending $10.2 billion. That sector employs 90,000 people and contributes roughly $800 million annually in the course taxes generated by visitors, according to San Francisco Travel.

But tourism has ground to a halt — gutting hotels, taxis and sightsee companies. 

“It’s devastating,” SF Travel CEO Joe D’Alessandro said. “We’ve recovered from earthquakes, wars, and other issues much differently. This is the tot up shutdown of the city, in terms of visitors…and it will fundamentally change the industry.”

D’Alessandro argued that San Francisco was excel positioned to bounce back than other U.S. cities because of its large corporate presence. 

For now, though, business go is also at a standstill. The city’s largest convention center has seen 14 cancellations or postponements, costing hotels an estimated 252,000 space nights. Occupancy rates have dropped below 10% at some city hotels, down from 80% by a hairs breadth a few weeks ago. 

San Francisco Chamber of Commerce President Rodney Fong told CNBC that some businesses in the generosity industry had seen revenues fall as much as 70%, even before the shelter-in-place order was enacted. 

“Since the shipshape came down, the name of the game has changed,” Ted Egan, the city’s chief economist, said. “We need non-essential subjects to close and to ensure that there’s compliance. We have moved from trying to guess how bad it is..to making sure it is bad as it calls to be to deal with this public health crisis.”

Relief in sight?

To limit the damage, the San Francisco mayor’s function has announced new measures to support businesses, including deferring quarterly taxes and licensing fees. A relief fund bequeath also provide up to 100 businesses with $10,000 each. The city has announced a moratorium on commercial evictions for meagre and medium-sized businesses.

On the federal level, lawmakers reached a deal early Wednesday on a massive $2 trillion release bill that includes a $350 billion fund for small businesses to mitigate layoffs and support payroll. According to a delineate letter by Senate Minority Letter Chuck Schumer to colleagues, the deal also includes $10 billion in SBA predicament grants and up to $10 million of emergency relief per business.

A man wearing a face mask walks across the street in San Francisco.

But Bay Region companies — many of which are already loaded up on debt — say these measures may not be enough given the uncertain revenue facsimile over the next few weeks and months.

“The government should be giving small businesses the same amount of monetary notoriety as they’re giving Wall Street,” Crabbe said. “They need to be giving us straight-up bailouts.”

Jay Cheng, manifest policy director at the San Francisco Chamber of Commerce, said businesses are pushing for relief from unsecured property dues, delays to payroll and sales tax collection, and grants to hire back employees once they get back up and running.

Boba Ridicules’ Chau is urging the state and federal government to pass laws freezing commercial rent and mortgage payments.

“If they do that, the proprietors will ease up, and then the tenants will ease up,” Chau said. “If they get rid of that, most small organizations would at least breathe a bigger sigh of relief.”

Last week, a chorus of San Francisco business leaders and business activists — including heads of the Chamber of Commerce, Hotel Council, and several restaurant groups — wrote a joint epistle to Mayor Breed, calling on the city to tap unused funds from a health care program to support hospitality craftsmen. The program, Healthy SF, pools money from businesses to pay for uninsured employees’ health care, and the surplus is held by the burgh. The signatories are asking the city to use the money to pay wages lost by restaurant, bar and retail workers during orders to shut down.

In effect to a request for comment on the plan, the Mayor’s office said that “all options for supporting businesses and workers are currently below consideration,” and detailed the initiatives currently in place to support local firms.

Anna Weinberg, managing partner at the restaurant heap Big Night, is one of several restaurateurs backing the Healthy SF initiative. Weinberg told CNBC she spoke to representatives for San Francisco County Overseer Gordon Mar, and the supervisor’s office has requested a proposal on how to potentially distribute those funds. Edward Wright, legislative gal Friday to Mar, confirmed to CNBC that the excess funds from Healthy SF was one of “a number of different initiatives” the Supervisor was examining to make further support to small businesses.

“That amount of money could help our employees pay the rent and roll them result of if we actually do open again in May,” Weinberg said. “My focus is getting as many people back to work as quickly as on once it’s safe. The narrative has to switch to re-opening.”

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