On normal days, Melissa Fink finds herself preoccupied with glitter and glam as dozens of children celebrate birthdays, have tea parties and attend camps at her Scottsdale business that is dedicated to all things girly.
But things have changed as the coronavirus has impacted businesses across all sectors, causing layoffs, revenue drops and Scottsdale hotel occupancy to dip by nearly 90 percent.
Now Fink – owner of the Girly Girlz event venue and boutique near Scottsdale Quarter – is trying to figure out how to keep the business afloat under social distancing limits.
“We have birthday parties that are already scheduled way out, so we had to cancel. We’re kind of just taking a week by week,” said Fink, who also had to cancel a spring break camp.
She has cut hours for her 12-person staff, which includes local teens who work part-time and a full-time manager.
In an attempt to keep the 17-year-old business open, Fink is offering $10 craft bags through online ordering for curbside pickup.
Girly Girlz has five different themed bags with a craft, a dessert to decorate and a coloring page.
The bags have allowed her to continue providing some work to her full-time manager, but she is not sure how long that will last.
“As a small business, I can afford a month of closure if I know it’s going to be a month,” Fink said. “I can plan and I can figure out how to make money in another way.”
Despite the hardship she is already experiencing, Fink is encouraging government leaders to take a firmer stance on stay-at-home orders to get the crisis under control.
“I think to get over this faster we just need to shut everything down for whatever they say is the period to be secure,” Fink said. “Let’s all just shut down, so we can get to the end of this faster.”
Businesses throughout Scottsdale – and the country – scramble to cope with a virus outbreak that has slowed the economy to a crawl.
The Economic Policy Institute used data from the Department of Labor Statistics and Goldman Sachs to predict Arizona could lose 4.2 percent of the state’s private sector jobs, nearly 105,000 jobs, due to the coronavirus.
In Scottsdale, the impact is particularly acute for the tourism industry – one of the city’s main economic drivers.
The Economic Policy Institute forecasted that jobs in leisure, hospitality and retail could drop by 26.1 percent.
Scottsdale was in the midst of its tourism high season when those procedures went into the effect, cancelling a slew of major events, most notably Spring Training baseball.
The overall economic impact of Spring Training alone in Arizona is $644 million, according to a study by Arizona State University based on the 2018 season.
The impact of those cancellations on Scottsdale’s hotels was immediate.
Over the first three weeks of March, occupancy at Scottsdale-area hotels and resorts declined 42 percent year over year, according to Experience Scottsdale.
The occupancy rate slumped to 10.5 percent on March 21, down 89 percent from last year. Total revenue for the month to date through March 21 has also declined 46 percent.
Two area tourism businesses have already notified the state of impending layoffs.
According to a notice filed with the state on March 20, Four Seasons Resort plans to lay off 422 workers and International Cruise & Excursion Gallery plans to furlough 203.
Stephanie Pressler with Experience Scottsdale said the organization has suspended its promotional activities for the time being but is encouraging people to support businesses through to-go ordering, shopping at local retailers and booking future staycations.
The organization is also providing resources for people affected by the downturn, including information on federal loan programs, unemployment resources and seasonal employment opportunities.
Area restaurants, bars and other tourism-dependent businesses are also closed or restricted to to-go and delivery service by an executive order from Gov. Doug Ducey.
Robert Carlson, owner of Carlson Creek Winery, said that “this is when our tasting room is full every day and all the businesses around us.”
Carlson runs three tasting rooms in Arizona, including one in downtown Scottsdale, and a winery south of Wilcox. It has a staff of 20 employees that can go up to 40 during high season.
Carlson said he had decided to close the tasting rooms before the governor’s order and has had to lay off employees.
“Obviously, they all have jobs when we’re reopened, but at the same time, you want them to be able to apply for unemployment insurance,” Carlson said.
Mike Baum, owner of Dilla Libre in southern Scottsdale, saw peak sales drop to nothing in just four days.
Now, Baum, who co-owns two Dilla Libre locations and a food truck, said the restaurant’s landlord in Scottsdale is threatening to kick them out if they cannot make rent by April 1.
Carlson said his vineyard is still producing wine but the uncertainty of when he will be able to sell that wine is difficult to cope with.
“It’s just when we’ll be able to start selling that wine again is the big question,” Carlson said. “Because that’s what it pays for – all that other stuff.”
Thus far, the business has relied on online sales and sales to members of its wine club.
The state and federal governments have taken steps recently to help out businesses.
The U.S. Small Business Administration is offering low-interest economic injury disaster loans to Arizona small businesses after Governor Doug Ducey requested the aid earlier this month. Business owners can fill out applications online at disasterloan.sba.gov/ela.
The loans are typically given out in the wake of natural disasters. Congress approved adding the coronavirus pandemic to the list as part of an $8.3-billion package earlier this month.
The program, which is available for both businesses and non-profits, offers loans of up to $2 million and carries low interest rates and a payback period of up to 30 years that is determined by an applicant’s credit history, said Tom Galvin with Scottsdale-based Rose Law Group.
The interest rate is 3.75 percent for small businesses and 2.75 percent for non-profits.
The loans are intended to be a stopgap to keep businesses afloat. For that reason, Galvin said businesses have to prove their economic hardship as part of the application process.
Galvin said it is still unclear when the program will begin disbursing funds.“Anecdotally, what we’re hearing is the SBA understands that this is just a major crisis and that Congress approved it for coronavirus for a reason,” Galvin said. “So, the SBA really wants to get these loans out, like they really want to help small businesses.”
Galvin said that desire to move quickly could be undermined by the sheer volume of applications.
Galvin said Arizona was one of the first 10 states to apply for the program and that the SBA has offered 24/7 helpline support to navigate the sometimes-Byzantine application process.
Fink said she applied for a disaster loan and is still waiting to hear back.
“I kind of just did the best I can,” Fink said. “And then when I submitted, it said it would be two to three weeks or three to four weeks before I would hear anything.”
Even more help could be on the way if Congress approves a new $2-trillion relief bill.
NBC News reported that the bill included $350 billion for loans to small businesses, including forgivable loans of up to $10 million for businesses with fewer than 500 employees to help them continue to pay workers.
There may be some help from the private sector as well.
WaFd Bank Arizona, regionally headquartered in Scottsdale, is offering lines of credit up to $200,000 to small businesses interest-free for up to 90 days.
The bank will expedite processing for lines of credit up to $30,000 to existing and new clients with good credit that can show a 10 percent loss in revenue due to the coronavirus and have been in business for at least two years. The bank said it could process smaller lines of credit up to $30,000 in just two to four days.
Even with those resources in place, business owners affected by the downturn are facing an uphill battle.
“My concern is for who is not going to make it through this, because the character of Scottsdale is the restaurants and the art and, to a certain extent, the wine tasting rooms,” Carlson said. “I really hope a lot of what makes Scottsdale special comes through this.”