March was a nightmare scenario for any restaurant when the pandemic struck and state restrictions limited business practices: Layoffs came. Tens of thousands of dollars worth of food and stale beer were thrown away. There was no profit for the foreseeable future.
Barlows Public House co-owner Brian Rummer recalls being thrown into the restaurant’s piecemeal business model of takeout and delivery service only. Luckily for him, Phase 2 allowed him to use his restaurant’s outdoor space and find a steady source of revenue.
But now, just weeks after Clark County was on the verge of a less restrictive Phase 3, COVID-19 cases are spiking, and restaurateurs like Rummer are worried about a new nightmare: a rollback to Phase 1 that could permanently close up to half of local restaurants and cause many closures in other industries.
“I think it would be catastrophic for small businesses, especially for the restaurant business, which was hit the hardest,” Rummer said on Friday, before a weekend that clocked 92 cases and three deaths in the county.
But at Barlows on Friday, things were operating at a steady pace. Rummer said he and most business owners who have been able to remain open are likely going to fully recover as long as there aren’t phase rollbacks. Anywhere from 30 to 50 percent of restaurants might close under rollbacks, according to industry trade press and echoed by Rummer and the Greater Vancouver Chamber of Commerce President John McDonagh.
“They’ll keep it together as long as we keep progressing toward a fully open market,” McDonagh said.
Gov. Jay Inslee on Thursday said during a press conference that phase rollbacks in Washington were a possibility in the future, which in Clark County would put a halt to indoor dining.
“These are not decisions at the moment,” Inslee said. “If these trends continue, we would have to look at the things that are least problematic for people’s daily survival, least essential for our economy, and most dangerous by bringing people together in social settings. Clearly, those would involve bars. Those would involve indoor dining at restaurants.
“The things that were the last things to come out of shutdown would be the first things we’d have to go back on,” he said.
Employee retention is another threat to businesses under rollbacks, Rummer said. After the layoffs at the beginning of the pandemic and the subsequent rehirings during Phase 2, Rummer, like many business owners, has been rebuilding his staff. Having to do that again would be hard, he said.
Meanwhile, business owners are soon expecting to deal with the end of the Payroll Protection Program. The federal program, with funds mostly earmarked for payroll, is set to end Aug. 8 if it isn’t extended.
If Clark County goes back to Phase 1, cutbacks could impact some construction and manufacturing, as well as in-home services including nanny and house cleaning, and nonessential office-based businesses. Restaurants and breweries would have to switch over to takeout and delivery. Barbershops and salons would close again.
“It’s going to drive businesses out of Vancouver, out of the state,” Rummer said. “I think they’re going to give up.”
Scott Bailey, regional economist for Southwest Washington, said that restaurants, retail and professional services would be hardest hit under a phase rollback. Real estate would also take a dip, as agents wouldn’t be able to show homes in person.
Some manufacturing would have to stop under a rollback, although it’s not clear what specific jobs would be considered “non-essential” and have to be cut. Manufacturers would likely see economic harm from a decline in product demand under rollbacks too.
Everything would likely lead to more unemployment insurance claims, he said.
Tracy Doriot, owner of Vancouver-based Doriot Construction, said the homebuilding industry is in the middle of a critical time of year that requires all hands on deck.
“This moment is our optimum time to do foundations, landwork, all those things, which sees us through the winter,” he said. “If we were put on a hard stop now, we would be in trouble.”
The industry isn’t particularly worried, he noted, because there’s an assumption that any rollback would likely be targeted to address the biggest
COVID-19 hot spots rather than imposing an across-the-board shutdown.
“At this point, I’m not too worried as long as the governor’s focus is on the sociological conditions that are promoting the outbreak,” he said.
Building and Industry Association of Clark County spokeswoman Andrea Smith offered similar comments. The construction industry is not expecting to be hit by any rollbacks, she said, because its leaders worked with Inslee’s office to develop extra safety protocols for workers.
Still, Doriot added, any rollbacks are cause for concern among builders, because the resulting economic damage can still hit the construction sector indirectly.
“We are extremely concerned about pretty much all sectors of the economy affecting us,” he said. “Sadly, money fuels our industry, and if people aren’t making a living, they can’t buy homes.”