The story is now familiar to many of us. On March 16, Governor Polis orders that restaurants, bars, gyms and other gathering places closed to the public, which immediately curtailed revenue for many small businesses.
Local restaurateur Bobby Stuckey said a third of Boulder restaurants are in danger of shuttering by September, if stimulus actions don’t more directly help them. The same could be said for many Boulder small businesses who rely on foot traffic, people spending, and etc. to survive.
Boulder’s custom juice spot Wonder Press, at 946 Pearl Street on Pearl Street Mall’s West End, is one. This is a story of the connected local economic web through the lens of Wonder.
“It’s chaos and bleeding,” Robyn says. “Now we got used to it with some band-aid adjustments.”
Wonder froze nearly all purchasing, furloughed all 18 hourly staff and one of its four managers, closed its kitchen completely and reduced business hours by 45 hours per week.
The juice shop stayed open with limited hours for walk-in pickups of juice.
For the last two weeks of March, revenue was just 26 percent compared to the same period in 2019, according to Wonder co-owner Robyn Knowlan. The first two weeks of April, revenue stood at 28 percent compared to a year ago.
85 percent of business is ToGo. Ticket size is up 70 percent. Even though business is coming, Wonder thrives on foot traffic from its prominent location on the west end mall. As Robyn says, Wonder is “solar-powered” — sales tick up significantly with sunny days when people are out and about.
Like every business, Wonder is part of a wider economic fabric (both upstream and downstream), including:
- Hourly employees
- Produce supplier
- and the City of Boulder
Juliana Otis, a CU graduate who has lived in Boulder for seven years, has worked at Wonder Press since May 2019. She works approximately 35 hours per week at Wonder and an additional seven per week as a nanny for a local family.
Once a preschool teacher at the Boulder Jewish Community Center, Juliana looked to make a shift toward a career in nutrition, which prompted her to apply to Wonder; that and its central location, and local, health-centered ethic.
“I wanted a job that reflected my values and beliefs,” Juliana says.
She most recently worked on the coffee bar at Wonder.
Wonder made up 85 percent of her monthly income. The family she nannies for has continued to pay her even though Covid-19 has kept her from those duties.
She’s currently on unemployment, which covers 70 percent of her previous monthly income. Juliana says she’s not feeling the heat yet, thanks to a little savings, but in a month she would.
This week, she received the extra unemployment bump of $600 per week that the government made available, and now she’s making more than she was while working at Wonder.
In addition, her landlord knocked $500 off her rent.
With unemployment, she’s now bringing in more money each month than when she worked at Wonder, and she’s saving money.
Local commercial property management firm PMD Realty, which owns and manages 10 buildings in Boulder, owns the building Wonder operates out of and collects rent.
“Revenue from all of our buildings are down,” says PMD Realty scion Jesse Day. “The best are down 50 percent, the worst down 90 percent.”
For most commercial tenants PMD Realty is suspending rent and in some cases Triple Net expenses, too, from one to three months, Jesse says. The company will tack on the suspended months to the end of the lease term.
This means the company essentially provides these months rent-free to its tenants. “We’ve dug into our savings,” Jesse says.
As the business picks back up, Jesse says PMD is considering prorating rent based on its tenants’ revenues.
The Covid-19 shutdown has also forced PMD Realty to reevaluate some of its new business ventures, says Jesse, such as NiCHE Workspaces, which it operates in two locations: Pearl Street and North Boulder.
Best case scenario, the city’s on track to bring in 28 percent less sales tax revenue in 2020 than it did in 2019. This forced the city to furlough a significant portion of its employees through June — some of those positions will be eliminated.
The city furloughed 38 percent of its staff — 737 employees, including 175 full-time staff — on April 19 through June 30 largely because the Covid-19 slowdown drastically reduced the sales tax it collected from businesses. Sales tax revenue accounts for approximately 50 percent of the city’s budget (aside from utility revenue).
Wonder exemplifies this dip. The sales tax Wonder paid to the city in March was 59 percent of what it paid in March 2019. If April 2020 sales trends continue, Robyn estimates that Wonder will pay 32 percent of its April 2019 sales tax payment.
Wonder gets most of its produce from Louisville, Kentucky-based food distributor What Chefs Want.
Spencer Lomax handles the Wonder account at What Chefs Want, which supplies organic produce to restaurants and grocery stores in the Denver metro area. Wonder is one of approximately a dozen Boulder-area restaurants What Chefs Want supplies. The Denver operations of What Chefs Want has seen a mixed bag to Covid-19.
Business on the restaurant supply side has dipped 10 to 25 percent, Spencer says. On the grocery side, however, with people flocking to stores for the basics, business has jumped by 50 percent.
Still, What Chefs Want has had to furlough over 60 employees. It has begun to hire some back as business stabilizes.
Robyn says Wonder will bring back some furloughed labor as sales increase, which she expects will happen with better weather and a staged relaxation of stay-at-home orders.
Wonder received a significant disbursement under the Paycheck Protection Program, but Robyn says she and Wonder are wary of using it for some of the same reasons Frasca co-owner Bobby Stuckey outlined in his interview with BLDRfly.
Much of the loan amount will only be forgiven for payroll expenses, and restaurants working at far reduced capacity don’t have anything productive for many furloughed employees to do until business picks up. In addition, they have to pay back the loan in 18 months.
Wonder’s using it as a reserve for now, and waiting for a potential amendment to repayment terms before making plans to use it.
Still, it’s a good emergency fund, Robyn says. With it, the restaurant could stay alive for nearly seven months if the slowdown persists that long.