The Paycheck Protection Program is tied to at least 6,785 jobs at more than 800 businesses and institutions in the area. While money remains in the program, the initial loans, issued in the spring, have largely run their course; recipients face months of recession and pandemic ahead and no guarantee of another round of federal assistance.
The public health crisis makes this recession different, but Hyde Park's economy has also changed since the Great Recession and previous ones. While the university and rhythms of college town life remain the paramount influence, locally owned businesses and services, especially in retail and dining, are competing with chain restaurants like never before.
The Herald interviewed businesses and nonprofits from a variety of background to get a sense of the current economic moment.
57th Street Wines, 1448 E. 57th St.
Owner Steven Lucy was able to keep on four part-time employees and a full-timer because of the PPP; his business stayed open throughout the shutdown with pickups and deliveries, though customers are still not allowed to browse the shop's shelves. Lucy used the loan partly to pay employees overtime to set up a delivery system and another for online orders.
"That's definitely a new part of the business model for us," he said. "There's a bit of a learning curve. Now in July we're pretty good at it, but in March it was a hectic two weeks to get everything figured out."
He and his team have discussed going back to allowing customers into the store, but so long as there is any chance of regression into Phase 3 of the "Restore Illinois" coronavirus response plan, in which retailers are still allowed to be open with capacity limits and under public health guidelines, it is a step the wineshop will not take. Lucy also wants to reduce the chance of an employee getting sick, which would require the store to shut down while other workers quarantine.
57th Street Wines, which opened in December 2016, has seen erratic business since March. Lucy ascribed sales boosts to people not drinking at bars and restaurants, but he has not done inventory analysis on what's selling and what isn't. But he fears what will happen if the U. of C. does not come back with a semblance of normalcy in the fall, given that a large percentage of customers are students, faculty or otherwise affiliated.
"We do notice a small dip in summer, we notice a smaller dip in spring break, and then we notice a huge dip the last two weeks of December," Lucy explained. "Every retailer and restaurant I've talked to in Hyde Park sees the same thing."
The business also does a small but important part of its business supplying weddings and other events alongside paid-admission wine tastings, which have all ceased, and Lucy expects a gross revenue shortfall as a result by year's end.
"I think a lot of other businesses are going to see effects now and in the next months," he said. "As there's a recession, people having job cuts, people having income cuts, households going from two earners to one earner, they're going to cut back on spending. And our particular case in Hyde Park — a lot of bodies not returning to Hyde Park in the fall."
Congregation Rodfei Zedek, 5200 S. Hyde Park Blvd.
Doug Kelner said the synagogue was able to cover utilities and the salaries of two clergymen, two maintenance staff, a teacher and an office manager with a PPP loan. "This relieved us of a fairly significant amount of financial pressure," he said. "It's essentially going to cover three months of our salaries."
Congregation Rodfei Zedek collects yearly pledges and dues from members; for now, Kelner said, they are honoring those pledges. But the High Holy Days are coming up, and he said it is too early to tell how much next year's responses are going to be impacted by the recession; the temple is already doing financial contingency planning.
But current expenses, for utilities are shabbat dinners, are lower because services are still not being held in building. "We're probably saving a good 5% of our budget easily, if not more, just because we're not able to do business as usual," Kelner said.
While the synagogue makes money from renting space in its building to other organizations, those tenants also received PPP loans. But Kelner does not now whether they will be able to pay rent this fall; furthermore, their leases have a clause that, if they are not allowed into the building, they do not have to pay. But Kelner expects to be on reasonably solid financial footing through next year.
"We have thought about reducing some staff; we don't have a lot of options there," Kellner said. "We are lucky in that we have some financial reserves. We had just started on a big fundraising plan about a year ago, and assuming people meet their pledges (and even if they don't), we've already collected a good portion of it. Some of those reserves can be used to deal with some of the uncertainties due to the situation with our tenants leaving."
At present, Kelner is focused on financing the electronic equipment needed to broadcast Rosh Hashanah and Yom Kippur services.
Carney Cleaning Services, 5330 S. Harper Ave., Suite 105
Sharon Carney has cleaning in her blood. Her mother and grandmother worked in the business, and she established her own, with 12 employees, half full-time, 23 years ago, with more than 30 clients: residences, businesses, post-construction, pre-demolition, events. Her daughter has a her own cleaning business downtown.
"A lot of my buildings went from two days a week to five days a week, because of the COVID," she said. "Now they need us more than ever, to keep the buildings sterile."
Nevertheless, the cancellation of events like the Silver Room Block Party and the Hyde Park Summer Fest (formerly Brew Fest) have knocked $26,000 off her bottom line. PPP, South East Chicago Commission and U. of C. grants helped: all of her employees are currently safe, but she has no idea what the future holds.
"This is something new for everyone. Hopefully we rebound by January or March of 2021, because I don't know if I can still go on," she said. But her employees are wearing masks, long sleeves and shoes for sole use in clients' buildings, and she has spent $1,500 buying personal protective equipment: "I stay safe because I have all the special mop equipment, the hand sanitizer, the masks, eye covers. I don't know what else to say."
At this point, Carney is breaking even, but having worked through past recessions, she knows demand will continue to slow during this one. She is refusing clients who have recovered from COVID-19, however, all while soliciting business to clients she suspects have no need for her services, given the amount of workers who are working from home.
Carney could not answer hypothetical questions about her business if the crises continue past next spring, but she noted that she is not a quitter and takes pride in employing people who are down on their luck. And she remembers her grandmother, a regular churchgoer who began her career cleaning churches, who lived through the Depression, telling her not to throw out food and to save money.
She also lived through the 1918 flu pandemic; telling her granddaughter about wearing scarves over her face, sadness and anxiety at not being able to leave the house and people dropping dead like flies.
"They talked about everything, whatever they thought we needed to know," Carney said. "It's just a different world. I'm learning hands-on this experience. What she told me about it, she couldn't tell me enough. It was something you had to live through. You know how people say you have to learn it for yourself? I'm learning it for myself."
Kenwood School of Ballet, 1100 E. Hyde Park Blvd.
This neighborhood ballet, acrobatics and tumbling school services around 250 students in its brick-and-mortar studio, with satellite programming at area elementary schools. There are currently eight teaching artists, all on contract, as well as a part-time studio manager and Kristi Mosbey, the founder and artistic director.
"We were on total furlough, because we're live art," she said, speaking about the initial shutdown. "We present work that has everything to do with human contact and connection and being physically present, in the traditional sense of the word."
The school has pivoted through the profound disruption, beginning Zoom classes and virtual private lessons as soon as the shutdown commenced. As her contracted teachers were collecting unemployment, she instructed clients to pay them directly, without the studio taking a cut. The PPP loan and a U. of C. grant helped with rent, alongside her landlord's assistance. Thirty-nine percent of students have stopped attending classes; a portion lacked access to digital devices and high-speed internet.
In-person classes resumed on June 15, with six to nine masked students in a class at a time, classes preceded by temperature checks and followed by stringent disinfecting. (Virtual classes have also continued.) The smaller class sizes have necessitated a tripling of the class schedule. "Because I cannot double payroll, I've had to double myself," Mosbey said. "I am teaching triple the number of classes that I did pre-COVID."
But she is happy to have kids back in the studio and paying her staff more than they made pre-pandemic to help with cleaning. "Even at the capacity that we're in — socially distanced dance squares, ballet classes outside in sneakers as much as we can — I'm overjoyed," she said.
In addition to being bad on a pedagogical level, a return to shutdown and virtual-only teaching would be economically ruinous for the school: Mosbey said around 80% of her revenue would be gone. `
Nevertheless, she has faith in the community and her student body to get through the rough times. Some of her students have taken classes at the school since they opened 8 years ago, and they do it 12 hours a week. "This is what they do," Mosebey said. Most of the families of students who have not come back told her that they are just not ready yet; very few have told her they will never come back.
But if there is another shutdown, Mosbey has told her staff that the school will return to the way it was when she first opened it, when she was director, teacher, choreographer, stage manager and everything else. "That's just what it will have to become again, in some capacity," she said. "I know this school will not go under. I will just have to readjust."
Wesley's Shoe Corral, 1506 E. 55th St.
The shoe store's 50th anniversary on June 1 did not pass as second-generation owner Bruce Wesley had anticipated at the beginning of the year.
"We had all these things planned. We sent out a color catalogue. We were going to do this big party," he said. "We were going to do this and that; all these in-store promotions got nixed."
A PPP loan allowed the retention of seven employees in the spring, when the state mandated most retailers to close completely, with one hired on since. "Not only that, the University of Chicago had a nice little program, too, where they helped us along getting grant money, and they helped us with concessions on the rent," Wesley said.
Wesley's enjoyed a "fantastic" June, he added, one of the best in recent years, supposing customers had countered cabin fever post-shutdown with retail therapy, all after online sales jumped 400%. Furthermore, the store has begun selling masks from three different brands.
Like all stores, competition with Amazon and other internet retailers has cut into profits. Wesley has tried to keep his inventory unique, with imported and hard-to-fit shoes, serving customers who still want to try on footwear before buying. He also benefits from a relative lack of competition on the South Side.
This recession will be Wesley's fifth at his shoe store, but he anticipates a rebound in time. "A lot of people don't know we exist and that they have an alternative to going downtown or shopping on Amazon," he said. "We can hit them up and fit their entire family." He acknowledged that the Great Recession had a seriously bad effect on his business, given a lack of small business resources at the time, and said PPP and other things have been welcomed this time around.
Even without further assistance, Wesley said suppliers have been accommodating. "We have good relationships that have evolved over the last 40-50 years, vendors like Birkenstock and others. They're helping us along, and I'm not concerned," he said.
"I don't need a handout from the government to make things work, we just need to remind people we're here and can supply their needs. People still need good shoes. Even if they don't go to work, they can still walk around the house or take a walk around the block. We have all the kinds of footwear for them."
First Aid Comics, 1617 E. 55th St.
A PPP loan saved the job of five part-timers. "I'm hanging in there; I'm alright," said owner James Nurss. "It's the employees, we've been able to keep them on. And now that we've reopened, everybody's working in the store as well, taking their shifts. We're looking good."
Nurss kept working through the shutdown, rearranging the store and building a counter shield to ensure compliance with social distancing guidelines. Everyone wears a mask, and the capacity limit is enforced.
Comics are a unique industry because of the limited number of distributors in it. During the shutdown, First Aid's distributor stopped delivering all the publishers' products. "Ever week, I wasn't getting that huge influx of product and bills," Nurss remembered. "It just happened to work out for me that by the time the distributor started shipping again and publishers started releasing books again, it was about the time that Chicago was allowed to start doing curbside (pickup) again and open the doors shortly after that."
Since reopening, the numbers have been good, he said, observing pent-up demand as well as new customers — Nurss supposes people are looking for new pastimes as they pass the days at home.
The bigger question is what will happen in the industry. The main distributor, suburban Baltimore-based Diamond Comic Distributors, has ceased distribution and shipments until further notice. Meanwhile, publishers like DC Comics have started distributing directly to retailers, upsetting First Aid's established ordering and sales system.
"There's a lot of turmoil going on right now … let alone what the economy's going to be throwing up at us," Nurss said.
Nevertheless, he is not afraid of going out of business. "Times are bad, (but) comics are not as expensive as other entertainment, and it's also something you can do solo at home," he said. "I think it's actually kind of good, because people are coming in, and they're buying stacks of things that they want to sit at home and read while they're sheltering in place."
Hyde Park Self Storage, 5155 S. Cottage Grove Ave.
Manager Jeffery Spencer said business has been steady, if not spectacular, since the pandemic began. All three employees have kept their jobs.
"We're not exactly setting revenue records, but we've been able to maintain our payments. Our customers and clients have basically paid us on time, for the most part. The U-Haul truck rentals that we do, the volume isn't quite there, but it's still steady," he said. "We haven't seen a real drop-off like you see in the restaurant business or retail."
Having seen three recessions since opening in 1991, Spencer said demand is fairly constant. "Storage is not a want- or impulse-driven business. It's generally a need-based business," he said. Instead, life events, like empty nesters or divorcees downsizing their housing, drives the business.
"I think going forward it will remain steady, because a lot of our clientele aren't necessarily tied into the restaurant business or the retail business," Spencer said. "In terms of those life events, what we've been seeing is that people have started to downsize and move in with other people, go back home with their parent or relative, and they still need a little bit of space. Some of our smaller spaces have been rented out."
In the initial shutdown, there was a rush on space from displaced U. of C. students. "There's going to be some of that, when people are relocating or downsizing their apartments," he said. "I don't anticipate right now anything falling off the cliff, but you never know. If we have a second or third wave and they really shut down the economy, like anything else, it could be affected."
Brady Speech-Language Pathology, 5228 S. Blackstone Ave., Suite Y
Clinician and owner Arnell Brady did not apply for a PPP loan, given his one-man operation, and has spent the past months retooling his business around telemedicine.
"The governor in the disaster proclamation enabled us health care workers to access tele-health. We could not access it before, but he allowed us to access tele-health, and the insurance companies complied," he said.
Consequentially, Brady never stopped working and is taking more appointments now than he was on-site before the pandemic. Consistency in attendance is much better, too. Negating the need for in-clinic consultations has removed the tremendous burden of getting to and from appointments.
"We hate to see this end!" he said. "We want to see the pandemic end, but we're hoping that our lobbyists can be successful in getting the insurance companies to allow us to continue using the tele-health even after we go into Phase 5."
Nevertheless, Brady and other clinicians are unable to use their more advanced instruments through virtual sessions, filtering out almost half of patients who need care. He still has not opened his practice because of the fundamental inability to see patients safely amid the pandemic, though mobile care has been considered for some patients who cannot access tele-health.
"We have to be exposed," he explained. "We have to work with the speech, swallowing, language and voice. … It's still too close to us."
The outstanding economic question is what will happen when patients lose their jobs and their private health insurance. Medicaid and Medicare are not providing patients with enough benefits, with prohibitive rules governing use at his clinic.
"It's sad to say, but services like ours, people who can access our services are usually middle class, upper class people," Brady said. "Because of the expense and lack of insurance, a lot of people can't access our services. Our services have pretty much been supported by people who are doing quite well, so even when the economy slumps, people still kind of find a way."
Emerald Blade Landscapes, 1315½ E. 57th St.
"Our business is interesting because we work very seasonally, so we're used to having times when business is slow, and we all sort of prepare for that," said owner Audra Madara. But because of the pandemic hitting in March, Emerald Blade was not able to get work started on schedule. Supply chains were disrupted. She could not meet with her 122 clients in person. But because of the PPP loan, she could keep her six full-time employees on staff.
Landscapers are essential workers, and work eventually began as they and their customers got over their hesitancy of going out into the world. The work is outside and yields itself well to social distancing. Some customers are trying to convert more of their property into green space. And with property being many people's primary investment, it pays, Madara said, to keep it looking good.
"People are home, and they want to spend more time there," she said. "And I think they're getting an opportunity to remember what it means to slow down and enjoy the world around them."
Emerald Blade is a member of the Illinois Landscape Contractors Association, which gathers information about the industry's trends, and short-term projections are fairly stable. "We feel very blessed. This is our way of life and it's important to us," Madara said. "The ability to offer people jobs in our community and pay living wages is of the upmost importance to us."
Russ Spinelli, State Farm Insurance Agent, 1525 E. 53rd St., Suite 727
Spinelli was able to retain all his worker because of a PPP loan, and he has added another employee in an attempt to stay ahead of the economic contraction.
"Business is really down, so I hired more of a salesperson to make up for revenue that we're losing," he explained. "It's going to cost more short-term, but I'm hoping it'll pay off longterm."
The insurance industry does not typically operate on a boom-and-bust cycle, and recessions do not hit sellers quite as hard or as quickly as other economic players. He said his business never totally recovered from the Great Recession, but right now, customers can afford their insurance and rates are being reduced.
"Hopefully we can seize an opportunity to get some business, but if I don't actively go out and get it, it won't be pretty," he said.
Spinelli said getting people back to work is what will help his business more than anything. "My market is Middle America, and there's a good hunk of it that's kind of fallen off the map a little bit," he said. "I'm sure they're struggling. In a lot of insurance, we've delayed cancellations. So it hasn't hit us just yet, but I'm starting to see the cancellations come in."
"All the advertising insurance companies are doing — 'We're doing dividends and giving customers money back' — but it might be $50. That's not going to change anybody's life. Or lowering rates, your premium goes down 10-15%, that's great. But if your income went down 75%, $50 here or $100 there is not going to cut it."