Gainesville business owners feel sting of slowed economy

Lilly Kline isn’t affiliated with the University of Florida, but the day the large institution at the heart of Gainesville shut its doors a few weeks ago, she became worried for the future of her two clothing retail stores.

Seven part-time student employees worked at the Urban Thread stores, located at 802 W. University Ave. and 1236 NW 21st Ave., before she decided to temporarily close them in mid-March. She also has two full-time employees. She continues to pay them, but doesn’t know how long that can go on now that she’s not generating any revenue.

“We were open for three days after the school closed with no business at all,” Kline said. “I lost my employees, and also the students are my customers.”

Data from the Florida Department of Economic Opportunity shows that retail accounts for about 10% of Alachua County’s workforce. It’s also likely to be one of the greatest sectors impacted by job losses as a result of COVID-19.

The county on March 23 issued an emergency stay-at-home order, then two days later ordered non-essential businesses close to tamp down the spread of the coronavirus.

Federal unemployment claims numbers released late last week showed the largest week-to-week jump ever recorded, with nearly 3 million more people filing for unemployment the week of March 21, compared with March 14. In Florida, nearly 68,000 more people filed for unemployment during the record week.

Official numbers at the county level won’t be released for another few weeks, but local leaders suggest that while Alachua County is often better-suited to weather recession than many other counties, the economy here will suffer along with everyone else.

“We’re in unprecedented times,” said Alachua County Economic Development Coordinator Edgar Campa-Palafox.

He said Alachua County is often spared from significant economic trends compared with other areas of the state that rely more heavily on tourism. The largest employing industries in the county, according to the Department of Economic Opportunity, are educational services, at nearly 20%, followed by health care and social assistance at about 19%. The presence of two large higher education institutions and two large hospitals drives a lot of the county’s economic prowess, Campa-Palafox said.

“Normally, we get sheltered from these highs and lows in the economy because we have those big employers,” he said.

However, the two next largest industries in the area, accommodation/food services and retail, each contribute about 10% of the local workforce.

Because of store closures and new restrictions due to COVID-19, large retail centers in town are operating at limited capacity and with fewer workers.

Butler Enterprises has closed 52 of its businesses and stopped further development, said spokeswoman Mary Reichardt, and the rest of its businesses are operating at less than half their capacity.

A 23,000-square-foot REI Co-op store was supposed to open at Butler Town Center in just a few weeks, but the opening has been indefinitely postponed, REI spokeswoman Caitlin Goettler wrote in an email to The Sun.

The store will have 55 employees when it opens, Goettler said.

Almost all shops have closed at nearby rival retail center Celebration Pointe, with the exception of The Keys Grill & Bar restaurant, Hotel Indigo and Gadget Guys, which offers drop-off phone repair services.

Many operators in the local restaurant scene have had to make difficult decisions to let staff go since their bars are closed and patrons can’t dine in.

At Dragonfly, 201 SE Second Ave., owner Hiro Leung said when the county ended dine-in services, 90% of the original staff of about 70 had to be laid off.

“Little by little we had to get rid of our team,” he said. “It’s definitely the most difficult decision we have to make. We’re in the business of adding people on, not taking them away.”

However, Leung said, business at Dragonfly, which continues to offer takeout and delivery, has been steady, and the team now has about 10 people working.

At Sweetwater Branch Inn, a bed and breakfast that also caters events and hosts weddings, owner Cornelia Holbrook said she never experienced such an abrupt drop in business in the 27 years she’s owned the property.

“Sweetwater has money set aside for a rainy day,” she said. “We had no clue a rainy day would look like this.”

Holbrook said most part-time employees have been let go because their services are not needed, but maintenance staff continue to actively care for the property’s 2 acres of gardens. A number of full-time staff also remain, though she worries about how long she can continue to pay their full salaries.

She said a lot of couples who canceled their March or April visits have rebooked for the summer, during which time Holbrook hopes business will continue more or less as usual.

But for many business owners, summer means slow. Fewer students and university faculty are in town, and therefore less money is spent at restaurants and in retail shops such as Kline’s Urban Thread.

Kline said she normally counts on business from March to make up for the lack of business in summer, but that won’t be the case this year.

“Our summer started three weeks ago,” she said. “I have no idea where rent is going to come from with no sales. If I don’t get some assistance, one of the stores may have to close.”

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