By DANA TIMS/YachatsNews.com
Hundreds of small Oregon coast business owners, forced to close their doors four weeks ago due to coronavirus mandates, are waking each day to the grim realization that they may never reopen.
Many are hoping that what scant money is available through government programs may help, at least in the short term. Others are wondering if they can stay in business by creatively pivoting to other endeavors.
But the shape of a future that only months ago seemed impossible is quickly coming into focus for the mom-and-pop businesses that have long characterized Oregon’s coastal economy.
“If this shutdown lasts well into the summer,” said Linda Hetzler, owner of the Drift Inn Hotel and Restaurant in Yachats, “an awful lot of businesses are simply never going to recover.”
Hetzler’s restaurant, like many other eateries ordered closed March 17, has tried to keep as many employed as possible by focusing on take-out orders. An initial bump in business has now faded and the Drift Inn, like most other Lincoln County restaurants, is now doing only 20 percent of the business it would normally.
As if matters aren’t bad enough, Hetzler had received a large food shipment just the day before the closure order.
“Who knows how much we’ll lose just from product loss,” she said. “And from talking with many others, everyone else is pretty much in the same boat.”
Business owners are not alone in wondering what might come next. Hundreds of employees, many recently put back onto the payroll to help manage a spring break that never happened, are in equally uncertain straits. Figures released by the state on Thursday showed that Lincoln County has had 10 percent – more than 2,800 people – apply for unemployment the past four weeks.
At the Yachats Community Presbyterian Church, pastor Bob Barrett has now dispersed more than $50,000 in donated funds to about 225 displaced workers. The community food pantry now run by the church normally serves three to five people a day. It’s has been serving 55 people three days a week since the closure-sparked downturn started.
“We keep thinking it’s stabilizing, “Barrett said, “and every day 10 to 20 new people are coming out to see us for the first time.”
A few unemployed workers have told Barrett they are starting to collect the unemployment benefits they’ve applied for. Many others, however, say crashes in the vastly overloaded system are leaving them without a dime.
Barrett personally has experienced that frustration in his efforts to tap into the Paycheck Protection Plan — one of the two main federal government programs aimed at helping workers and businesses.
Since Barrett’s church is eligible to receive money under the plan, he first tried three weeks ago to complete an application.
“I was put into a queue and finally received an application three days ago,” he said. “I ran into glitches and system crashes every time. It’s just a nightmare.”
Barrett received the worst kind of reprieve this week when notified that the entire $349 billion allocated by Congress to fund the program has now been tapped out.
Tax rebate idea gets cool reception
This week Barrett, Hetzler, the owners of the Green Salmon and Ona restaurants, former Yachats City Council member Greg Scott and former city finance consultant Tom Lauritzen proposed a restaurant rescue plan to the city of Yachats. They said without some kind of immediate financial help, that several restaurants may never reopen.
The group proposed that the city refund the 5 percent food and beverage tax that 16 restaurants, grocery stores or coffee shops paid in January for taxes collected in October, November and December 2019. That amount – the city hasn’t yet said what it collected – should be more than $90,000, according to past tax collection records.
Yachats is one of only two cities in Oregon with a sales tax on prepared food. The money – which has grown from $280,000 in fiscal 2014-15 to $416,000 in fiscal 2018-19 – is used to pay off loans to build the city’s wastewater treatment plant.
The group said the city is collecting much more in food and beverage taxes than the sewer plant’s yearly debt and that it has ample money in reserves to afford the rebate.
City Manager Shannon Beaucaire and Mayor John Moore have been cool to the plan and have only talked with Barrett about the group’s idea.
In reply to one city resident who had emailed the city supporting the idea, Beaucaire said that “things as they are presented are not always factual” without saying what issues she had with the idea.
Beaucaire and Moore said on Facebook and in an email they hoped to have a broader business support plan to announce Friday, but would not talk to YachatsNews about the Barrett group’s proposal or the framework of the city’s idea.
The City Council has not met in a month and no meetings are scheduled to discuss a business relief plan.
Not holding out hope for federal help
The other main source of potential relief is the Economic Injury Disaster Loan. Like the Paycheck Protection Plan, it is administered by the federal Small Business Administration. Qualifying applicants are eligible to receive a loan of up to $10,000.
Those pursuing that route, such as the Drift Inn’s Hetzler, aren’t hoping out much hope.
“I put in an application,” she said. “They told me it might be three to four months before I hear anything back.”
Area banks, not surprisingly, have been deluged with calls and emails from owners and employees desperate for help.
Oregon Coast Bank, in Newport, is one of about 4,000 banks nationwide that is participating in the Paycheck Protection Plan loan program, said Joe Postlewait, the bank’s president and CEO. But with the program’s money now depleted, there’s not much he can do but wait to see if Congress votes additional funds.
To date, Oregon Coast Bank has processed 78 plan applications for a total of about $9 million, he said. For comparison, the bank’s entire lending portfolio totals $120 million.
Postlewait, who worked at the bank during the Great Recession of 2008, thought then he’d seen pretty much everything the economy could throw at him. Turns out that’s far from reality.
“In 2008, I’d marvel at seeing someone who was being ruined, while the place next door might be almost unaffected,” he said. “Now, there’s very few folks aren’t affected. And those who are, are really, really, gravely affected.”
Still, he has some advice.
“If someone needs to skip a payment, they shouldn’t be afraid to ask for that,” Postlewait said. “We’ve suspended some late charges and over-draft charges. If you have a question, just ask, and we’ll do whatever we can to work with folks.”
Closure could give businesses opportunity to evolve
Michelle Korgan, owner of Ona Restaurant & Lounge in Yachats and concessionaire for the Heceta Lighthouse Bed & Breakfast, put her restaurant up for sale in mid-January. To prepare for that, she had all of the financial particulars lined up to apply for a paycheck protection loan. Even with that level of detail at hand, however, she has yet to find a bank that will accept her business.
“I’m working with three of them at the same time,” Korgan said. “I’ll sign with who ever comes through first.”
Looking ahead, she is mulling changing her business model if it means being able to remains solvent once the current maelstrom subsides. That might mean a makeover from Ona’s current fine-dining menu to one featuring tacos, ramen and fish and chips.
“If they start relaxing the rules and people can come to the coast and still do social distancing, we’ll eke by,” she said. “But if this lasts into July, it will be devastating. Not just for us, but for everyone.”
Dave Price, director of the Small Business Development Center in Newport, agreed that those economic challenges are now facing virtually all coastal businesses and workers.
“Every motel and restaurant from Yachats to Toledo to Otis closed on the same day,” he said. “We’ve never seen devastation anything close to that.”
He agreed with others that many businesses may never reopen, but added that, entrepreneurs being entrepreneurs, some will see this as an opportunity to evolve to meet new and changing market demands.
He also pointed to ongoing discussions by the county and some of its cities that focus on freeing up resources that can be used as grants and loans to stricken businesses.
“We need to remember that we are not alone in this fight,” Price said. “And we need to share good news where we can find it to inspire those to keep trying.”
— Quinton Smith of YachatsNews contributed to this report