Sacramento businesses see a comeback with new reopening rules, but it’s too late for some

Sacramento officials have been scrambling to find a suitable location to stage a strongman competition that’s been long scheduled to begin June 15 — an out-of-the-way location that would avoid crowds and not violate COVID-19 protocols.

But now the door could open wide to spectators, thanks to Gov. Gavin Newsom’s pledge Tuesday to fully reopen the economy that very day if pandemic conditions continue improving.

“It would bring people in from the Bay Area and Reno and Chico,” said Mike Testa of Visit Sacramento. “It would be a huge opportunity for us to welcome spectators. That would be great for the hotels and businesses.” A location is still being finalized.

All around greater Sacramento, where the economy has been slumbering since March 2020 and unemployment is a grim 7.2%, the governor’s announcement was hailed as welcome news.

“In general, people are feeling good,” said developer Mark Friedman. “Maybe it’s the sun is shining, maybe it’s a vaccine euphoria. There’s pent-up demand. People want to go out and spend money.”

But he and others cautioned that pockets of the economy remain troubled and won’t recover overnight. Sacramento’s unemployment rate is nearly double what it was before the pandemic started; thousands of jobs have disappeared in restaurants, hotels and the small business sector.

The demand for office space has been watered down by the likelihood that many employees will continue working remotely even as the economy is fully open for business. Newsom’s own administration has declared that he wants state agencies to explore permanent remote working for large swaths of the workforce.

“The biggest challenge is the damage to the small business sector,” said economist Jeff Michael of the University of the Pacific. “There’s been really heavy damage.”

Yet Michael agreed that many consumers are in good shape financially and are ready to spend money they’ve been saving over the past year. “The consumer demand will be there, I’m confident of that,” he said. “Households are in a position to spend.”

But he added: “We have some small businesses that are gone, they didn’t make it.” Those empty storefronts will take a while to spring back to life.

In some regards, the reopening will come too late for some businesses. Arden Fair mall has lost two of its four anchor tenants, Nordstrom and Sears. Friedman, whose family owns Arden Fair, declined to comment on what lies ahead for the mall.

Pat Murakami closed her two Ambrosia cafe locations in downtown Sacramento last fall, and shuttered her catering business a week ago. Newsom’s announcement won’t prompt her to take another shot at the restaurant business.

“It’s over; it’s heartbreaking,” she said. “It’s just too late. We’ve gone an entire year, really, without making any money .... I’m just emotionally drained.”

Similarly, Newsom’s announcement won’t save Natomas Sports Club. The Sacramento tennis club closed last fall because of the pandemic stay-at-home orders, and parent company Spare Time Inc. is preparing to sell the property.

“There’s no going back on that one,” said chief executive Larry Gilzean.

But Gilzean said Newsom’s announcement would boost Spare Time’s seven remaining clubs. The clubs have been operating at 10% capacity, in line with the state’s current guidelines, although Gilzean has roughly 60% of his workforce on the payroll. That’s 600 jobs, which leaves 400 employees who’ve been idled by the pandemic.

A full reopening “would certainly be a huge lift,” he said. “It’s important that we get things reopened.”

Among those businesses that have survived, the short-term prospects are good. The hotels of the Lake Tahoe area, for example, stand ready to greet travelers.

“I’m sure our hotels will be able to gear up,” said Carol Chaplin of the Lake Tahoe Visitors Authority. “They’ve spent the last year gearing up and gearing down, so they’re pretty nimble.”

What’s less clear, she said, is the fate of big events that got scrubbed last year, such as the July 4 fireworks shows around the lake. “It’s more complicated having large gatherings on U.S. Forest Service beaches,” she said.