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August 12, 2020

Salinas Valley leaders discuss economic fallout from coronavirus pandemic

Business prospects continue to look challenging for area cities

SALINAS VALLEY — Officials from South Monterey County met in a town hall Zoom meeting to discuss local economies and possible resources businesses can use to stabilize themselves during the Covid-19 pandemic.

As shelter-in-place orders continue, profits go down statewide for almost all types of business, putting many at risk of closing entirely. Reopening is a possibility being considered, but comes with restrictions, such as social distancing, that limit the number of customers.

“You bring money in a bar or restaurant by bringing in as many people as you can and moving people in and out, but now you’re going to be in a situation where you have to do social distancing,” said Soledad Mayor Fred Ledesma about the reality faced by business owners.

In his example, Ledesma said a wine bar could go from 10 tables to five. In addition, it might mean going from three waitresses on duty at a time to just one, and then that one realizing tips will be meager or nonexistent.

“With the social distancing rules, it’s going to be very difficult for people to make a profit because you just can’t do the numbers,” Ledesma said.

Cal Coastal Director Cindy Merzon said businesses need to develop a plan for reopening and evaluating how things will be different.

“Will there be enough profit to be made to survive? You need to know your financials,” Merzon said. “It may take a while until customers feel comfortable coming back out, even though you’ve done everything right in terms of distancing and disinfections. You need to know your customer base and have a sense of whether or not you’re going to have the volume to reopen.”

Other advice came from Kimbley Craig, president of Monterey County Business Council.

“Take a look at what other cities are doing to be creative and different about rolling back out and slowly introducing business into the general public,” Craig said.

She brought up the idea of outdoor seating first initiated in other countries, and locally being explored by Carmel, Pacific Grove and Monterey. She said it could work for more than just restaurants, as retailers can have sidewalk sales.

“Keep an eye on what works,” Craig said.

Greenfield City Manager Paul Wood advised planning for multiple scenarios. He said at the very least, plan for a best case, a most likely and a worst case. Each will have different requirements and cash flows, meaning different approaches and abilities to gain funding.

“It never ends up exactly the way you plan, especially if you only plan out one scenario,” Wood said.

He advised businesses to be ready to adjust accordingly to any shifts that happen.

“Remember that right now it looks dire, you’re struggling, you’re wondering what you’re going to do next,” said King City Mayor Mike LeBarre. “The good thing is we had a very strong economy based on good fundamentals. That didn’t go away. Unlike other times we’ve gone into recessions, it was because of the fundamentals.”

LeBarre said he believes the foundation of a good economy is still present, just obscured by the pandemic response.

He reminded, “Please buy locally. Support your local stores. That’s how we all get through this together.”

In addition to comeback ideas, funding resources were discussed.

The micro loans available through Cal Coastal were brought up as one resource. A total of $260,000 has been set aside for South Monterey County businesses. As of last week, only two applications had come through from South County, totaling $35,000, according to Merzon.

“It’s really important for South County businesses to know that the county set aside $200,000 to help South County businesses. But you need to apply for the funds before May 31,” Merzon said.

Craig spoke about the Paycheck Protection Program and how different banks will have different availability.

“We seem to be having more success with the local banks,” Craig said. “Some of the local community banks are able to get funding through and approved and in your bank account much more quickly.”

Craig went on to urge being proactive.

“It’s up to you to go after some of that funding,” she said.

Carmen Herrera, executive director of El Pajaro CDC, presented information about the business incubator program to help businesses get a kick-start. It is open to South County, but all applicants need to go through an orientation. Technical difficulties rendered a majority of her audio into static during her presentation about El Pajaro’s assistance of community businesses.

At the county government level, District 3 County Supervisor Chris Lopez said the county is planning on how to move forward to returning life and business to normal.

“We did set up some ad hoc committees at the county to help start addressing the reopening,” Lopez said. “Those include religious organizations, hospitality, restaurants. We’re working on getting us there, and a lot of that is based on data that the state requires.”

While the county is making progress toward some of the state’s marker requirements, Lopez explained one is testing, and urged members of the public to get tested for Covid-19 for the government to better track the infection rates and plan for reopening. The state currently wants the county to conduct 650 tests per day.

Sean Roney
Sean Roney
Sean Roney is the reporter for King City Rustler and Salinas Valley Tribune, a unified publication of Greenfield News, Soledad Bee and Gonzales Tribune. He covers education, government and general news for the Salinas Valley communities in South Monterey County.

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