An Economy in Limbo

With each day that passes, Door County business owners get more nervous about the upcoming summer season. 

At Kitty O’Reilly’s in Sturgeon Bay, business is down 75 percent, said Buster Crook, who owns the establishment with his wife, Amy.

“We have cut down to tighter staff, but we are staying open with takeout and curbside pickup, and we will probably add delivery shortly,” he said.

Crook said he’s preparing to apply for the payroll-protection loan included in the CARES Act passed by Congress to help small businesses weather the coronavirus storm. Businesses that use the funds to keep people on the payroll could have some or all of the loan forgiven.

“It brings some of them back to work, and there’s a lot to do around the pub to get ready for summer – if summer happens,” he said. 

Crook hopes that by June, business could be getting back to normal.

“If we can get open by Memorial Day and summer people arrive, we can build some type of traffic pattern,” he said.

Sturgeon Bay Mayor David Ward said the county is lucky to have a diversified economy. Ward, a former economics professor at University of Wisconsin-Oshkosh, said the industrial base is one of the biggest single sources of personal income in the county. “Tourism is another story,” he said. “Between cancellations and postponements, we may end up with half a tourist season or less, and that begins a trickle-down of job losses, losses on taxes.” 

And there is no question the country is going into a recession, he added. 

“I always try to find the positive side,” Ward said. “We have been worried about a recession for four years; now we can stop worrying. The question is how long and how deep.”

At Door County Economic Development Corporation (DCEDC), the first priority is helping businesses through the health crisis by connecting them to resources, said Steve Jenkins, who joined DCEDC as its new executive director at the beginning of March. 

“Although I hope by June 1 or July 1, we will be on the other side of this,” he said, “I think there will have to be added emphasis on the shoulder season as we move forward – more promotion of winter activities.”

Wisconsin Economic Development Corporation and UW-Oshkosh have rolled out an assessment of economic impact that will survey businesses across the state monthly for at least three months, with results also tabulated by county.

“When we start getting those results, we will get a better feel of what recovery needs to be, what we need to do to help our businesses in the future to be more resilient, and what types of businesses we need to attract and grow,” Jenkins said.

He said area banks are gearing up to process SBA loan applications. 

“I think they anticipate an onslaught,” Jenkins said. “We encourage anyone with an existing business loan to contact your bank to see whether they will be processing these SBA loans, and if they are, begin assembling your documentation.”

Greg Swain, president of Bay Lakes Information Systems, which provides software for hotel and motel management, said his customers are both scared and as optimistic as they can be. 

“They are running skeletal crews, trying to get by with the least possible impact on their business,” he said. “After all, you don’t need a crew of housekeepers if no one is there.”

But what it looks like when the crisis is over is anybody’s guess. 

“Would you immediately go somewhere on vacation, or would you ride it out for a few weeks?” Swain asked. 

Fortunately for the tourism business in Door County, this time of year is largely a season of preparation with limited occupancy.

Sister Bay has asked lodging entities not to take reservations this month, but some lodging is open to accommodate crews working on commercial construction and highway projects. The good news is that local lodging firms have reported very few cancellations further into June, July and August, said Louise Howson, coordinator of the Sister Bay Advancement Association. And businesses are adapting, with retailers moving more strongly into e-commerce. 

“Sometimes there is a silver lining: Store owners can see an opportunity that they didn’t have time to look at before, or this pushes them outside their comfort zone,” said Howson. 

Draeb Jewelers had been working on adding e-commerce to its website since before Christmas, said Bill Draeb. It now features a chat button that sends a text to store staff members so that customers can receive quick answers during store hours, plus a payment form they can use to securely enter credit or debit card information.

Havegärd, the bird-food retailer on Highway 57 south of Sturgeon Bay, shut down at 5 pm on March 24. Pickup trucks and SUVs were stocking up on bird seed after the word went out. Brian Sheehy, an owner, complained at the time that Target, Walmart and hardware stores could stay open and sell bird food, while he was shut down. The company filed an appeal and received permission to reopen two days later.

Novel Bay Books in Sturgeon Bay has been putting its inventory on its website and offering free delivery in Sturgeon Bay and mail delivery anywhere in the country for $1, said John Maggitti, who owns the business with his wife, Liz Welter. Its distributors are supporting independent bookstores by offering to mail books directly to individual customers for $1. 

Wulf Brothers, a provider of heating and air-conditioning equipment, is considered an essential business. Cap Wulf, the company’s owner, said the service department has been a little slow because some homeowners aren’t sure whether they want a technician to go inside their house. Wulf Brothers screens customers to try to make sure they aren’t infected, and technicians are supplied with sanitary wipes, masks and gloves. 

“We aren’t forcing our people to go anywhere they aren’t comfortable,” Wulf said. “Some guys are very nonchalant about it, and some are quite concerned about everything, but I think for the most part, everybody is carrying on maintaining social distancing.”

Fortunately, the company has a lot of new construction work, he said, so it has redeployed some people to those projects and hasn’t had to lay anyone off. 

Like Sheehy, Wulf questioned the way the shutdown operates. Woodman’s in Green Bay was a zoo, he said. Walmart stays open, but many small shops in Sturgeon Bay have to close.

“It doesn’t make a lot of sense,” Wulf said. 

Banks are adjusting as well. Jamie Alberts, senior vice president at Nicolet National Bank, said the bank started preparing to help with SBA loans weeks ago as word about the package trickled out.

“We have been reaching out to clients in northeast Wisconsin,” Alberts said.

The bank is trying to help clients in other ways, such as shifting loan repayment to interest only, deferrals or a small boost to a line of credit. 

Businesses with banking relationships should discuss their situation with their bank to prepare for the assistance programs, he added.