How a community comes together in a crisis defines how it thrives in better times. I've had the good fortune of volunteering with Frontline Foods, which helps save restaurants and their jobs and feeds the front lines impacted by the crisis. Inspired by my wife and working with Palo Alto restaurants, I have come to realize how essential they are to my hometown.
Over 50% of restaurants may not survive the crisis, according to a San Francisco restaurant association. Twenty-five percent of the currently unemployed come from the restaurant industry. Most had to lay off 95% of their staff, while the industry trend of aggregators like DoorDash takes an untenable 30% cut into their margin. The industry employs the most minority managers, and for nine-out-of-10, it is their first job. These are good jobs for many, and surely better than the gig economy's pathway to poverty.
The trend toward remote work accelerated years into weeks under the coronavirus public-health orders. Employers are shifting to remote work, at least with a hybrid model, because it saves costs, can be more productive and preferred by many knowledge workers. You may feel this is a temporary shift, say through the end of the year, but it is likely that half of all office space may go unused — not just for distancing sake but also to save businesses costly overhead. And the ripple effects for local tax revenue from commercial and residential real estate, and more, will not be cured with a vaccine.
Retail was already shifting to Amazon and Instacart. Small retailers were not prepared for pickup or delivery, as their differentiation was goods best experienced in person. It's uncertain what the future holds for Stanford Shopping Center, a major source of tax revenue, when 25% of malls may close, according to Coresight Research, an advisory and research firm. With the federal Paycheck Protection Program (PPP) expiring, we'll see a wave of closures and unemployment.
There is no V-shaped recovery. As we've seen in states with low cases and rapid opening, people only gradually return to in-person spending. If as a community we don't rapidly act to help retailers survive, they will not.
I commend the city of Palo Alto for the Summer Streets Program to enable outdoor dining and retail, through closing University and California avenues to cars and enabling parklets. Cal Ave, by all accounts, is a safe success. The owner of Terun restaurant increased revenue and was able to hire back 95% of his staff.
University followed on June 26, initially with a three-day closure. A fistful of property owners has been against the programs, and seeing a lack of data to inform decisions, I manually surveyed 50 Palo Alto downtown restaurants and retailers on the week-over-week revenue effect of opening the streets. As covered in the Palo Alto Weekly, we found a 24% increase overall — 30% for all restaurants and 38% for restaurants on University. Now, it is an open street everyday through Aug. 2.
Keep gathering data on revenue, parking and traffic. Traffic (currently 50% of pre-COVID levels downtown) and parking went from being a top issue to a non-issue. As I've suggested above, it will likely never return to previous levels. But we need to be respectful to downtown businesses and residents and monitor changes through phases of opening.
Permit parklets for two years. Converting parking spaces into safe outdoor dining areas can help restaurants survive, even if they aren't on University or California avenues. They increased revenue in Palo Alto for those who invested in them. Parklets cost $10,000 or more, however, and with restaurants at the brink of death, it's hard to justify the investment without some assurances that it will remain in place for a reasonable amount of time. Investing in a parklet that may have to be removed with a 30-day notice is one way to die. The city is exploring a lower-cost option like the plastic barriers at Town & Country Village, but the jury is out on those.
Menlo Park subsidized permanent parklets with up to $40,000. While some Palo Alto restaurants are advocating and holding out for that, it's not likely here. The city has funds available for crisis response like this, but major forces are causing a budget crisis. Also subsidizing them may mean picking winners and losers.
The solution is for the city to grant parklet permits for two years, with rapid approval. This incentivizes restaurants to invest in a quality parklet, with greater return, and time to amortize the expense.
Extend the program though year-end for University and Cal Ave. This allows consumers to establish the new demand pattern for Downtown and Cal Ave. The more time allowed, the more likely businesses will invest in quality furniture, design the experience, and staff their needs, providing needed employment.
Promote the program and refine the experience. Rebrand the Summer Streets program into something more inviting, like Open Streets. Promote it through paid advertising like neighboring cities are doing. Enable citizens to help shape the public space and experience. For example, volunteers got their street performer friends to come play downtown on June 26-28, creating a great atmosphere that helped nearby restaurants. Engage the city arts program like they did with volunteers for the Black Lives Matter mural. Create wayfinding art projects that point to restaurants, retail and parks on or just off the street. Enable restaurants and retailers to post signage in the public space in allotted areas.
Please help encourage the city to take these steps quickly, and come enjoy the Open Streets.
Ross Mayfield is a resident of the Professorville neighborhood and can be found at @ross on Twitter.