DENTON
April 2020
Business
CHRONICLE PAGE 14A
www.dentonbusinesschronicle.com
One month later Denton’s downtown businesses adapt to survive COVID-19
By Ryan Higgs | Staff Writer rhiggs@denton.com
One month ago, officials identified Denton County’s first COVID-19 case, with more than 500 positive test results and counting since; meanwhile, Denton’s economy has been tested under the weight of the pandemic as small businesses adapt to survive. As county mandates were rolled out to limit the virus’s spread and nonessential businesses and restaurant dining areas were closed, many of Denton’s downtown storefronts experienced significant effects. For Matt Fisher, owner of West Oak Coffee Bar, the onset of the pandemic resulted in an immediate slowdown at his coffee shop on the Square. Fisher also owns West Oak Coffee in Decatur and Kimzey’s Coffee in Argyle; between the three storefronts, he said overall sales are down about 60% from normal — leading to hourly cutbacks and layoffs. He said that of the 53 people employed at the three locations, 12 have been laid off in response to the pandemic. “A lot of information was changing very quickly, and we realized that the best avenue forward for our folks that were not going to be able to get the hours would be to lay them off,” Fisher said. “We filled out a mass unemployment deal with the Texas Workforce Commission, and that streamlined our folks into the pipeline so they could start receiving unemployment.” With more than 760,000 people filing for unemployment in Texas in the past four weeks, analysts are expecting more than 1 million Texans will be unemployed in the coming weeks, The Texas Tribune reported. Meanwhile, 15,177 Denton County residents filed for unemployment in the last two weeks of March, according to the Texas Workforce Commission. Fisher, who opened his Denton coffee shop about five years ago, said the pandemic has offered an opportunity to examine his operations in a different light. Although additional layoffs are not anticipated, and employees are hoping to be rehired at a slower rate, he said his coffee shops will look different — from the food menu down to the drinks — when normalcy returns. “We are working on quite a few plans to revisit our food menu, our drink menu and everything,” Fisher said. “We want people to have the same expectation of quality and uniqueness, but at the same time, we are going to have to look at the world different — the world we are going to enter is going to be a different place after this.” With the manufacturing and hospitality industries contracting and food and retail sectors of the economy hemorrhaging, the city of Denton is expecting a loss of upward of $4 million to $5 million in sales tax in 2020. With unemployment anticipated to be as high as 25%, Michael Carroll, director of the Economics Research Group at the University of North Texas, said
Photos by Jeff Woo/DRC
Barista Mattea Edmondson makes a coffee order for a customer at West Oak Coffee Bar on April 8. The coffee bar is operating on a strict to-go basis and has reduced the total number of staff at the downtown location. the likelihood of a recession is all but guaranteed. Not long ago, Denton was rated as the fourth most recession-resistant city in the U.S., but Carroll Michael said the pandemic has Carrol had an unprecedented and far-reaching effect on the economy. He said that while silver linings exist, the impacts will be widespread. “Because Denton is a diverse economy with different industry, this downturn is going to affect all sectors of the economy, not just a few,” Carroll said. “One thing that we do have that’s good is the two universities that are in Denton, which tend to be more stable than other industries; but for the most part, it’s going to be felt throughout retail, lodging and food services.” For downtown Denton, which generates about 3% of the total sales tax revenue for the city and where more than $132 million has been reinvested, Carroll said there’s been a significant change to the landscape. However, much of that change, he said, depends on the extent of the outbreak. John Cartwright, president of the Denton Main Street Association, a nonprofit focused on the preservation
Matt Fisher, owner of West Oak Coffee Bar, sees changes ahead for his three coffee shops after the coronavirus pandemic. “We want people to have the same expectation of quality and uniqueness,” he said, “but at the same time, we are going to have to look at the world different — the world we are going to enter is going to be a different place after this.” and revitalization of downtown, said there is not a light switch that will return life to business as usual. He said difficult decisions on operations and employee staffing were made at both of his restaurants, Cartwright’s Ranch
By Ryan Higgs | Staff Writer rhiggs@denton.com
With the state mandating the closure of nonessential businesses and limiting restaurants to take-out and delivery to limit the spread of COVID-19 through at least April 30, many businesses have transitioned online, restricted hours or temporarily closed. Milpa Kitchen & Cantina, a Mexican eatery and cantina that specializes in a comfortable fiesta setting, has temporarily closed. The restaurant, at 820 S. Interstate
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House and Cartwright’s Cafe. As restrictions on commerce and mobility went into effect, he said the best decision for his restaurants was to furlough employees until further notice, allowing them to apply for unemploy-
35E, Suite 101, hopes to reopen in the coming weeks. By state mandate, bars such as East Side, Oak Street Drafthouse, Miss Angeline’s and Harvest House are closed. Mad World Records, a new and used record store on the Square, is temporarily closed through April 30, but is working on a way to sell music to customers online. Recycled Books, on the downtown Square, is offering online sales with local delivery within Denton city limits. The minimum order for purchase is $10, plus $5 for
ment. Since then, his business operations have mainly focused on catering. “The first week was easy to do, because it was all done in catering pans, DOWNTOWN | CONTINUED ON PAGE 16A
delivery; however, delivery is free on orders over $25. In contrast, some businesses have newly opened. The Cookie Crave, a vegan and allergen-free cookie shop, opened this past month at 519 S. Locust St., and is open for take-out or delivery options only. The shop is open 10 a.m.-7 p.m. Monday-Thursday and 11 a.m.9 p.m. on Friday and Saturday. RYAN HIGGS can be reached at 940-5666889 and via Twitter at @ryanahiggs.
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Denton Chamber of Commerce’s 35th Leadership Denton Class
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ne year ago, this was my first month on the job at your Chamber of Commerce. A few months in, we began the process of applying for reaccreditation with the US Chamber of Commerce, which is a five-year designation. We spent about five months compiling the required resources and submitted the package on December 22, 2019. Accreditation with the United States Chamber of Commerce is the only program of its kind that defines excellence in chamber planning and recognizes chambers for outstanding contributions toward positive change in their communities. The purpose of the U.S. Chamber’s Accreditation Program is to facilitate continuing excellence in the chamber industry and to foster a pro-business environment across America. There are over 890 chambers that have participated in the program since 1964. Currently, 202 chambers carry this distinction. With approximately 7,000 chambers in the United States, Accreditation with the U.S. Chamber of Commerce is a
Erica PANGBURN | COMMENTARY
prestigious honor that distinguishes the high quality, expertise, and strong leadership displayed by Accredited state and local chambers of commerce. It is worth noting that the Denton Chamber has been continuously accredited since 1975. One month ago (which now feels like a full three years, am I right?) on March 10, your Denton Chamber was awarded Accreditation for the 9th time in 45 years. Why does it matter? Because supporting our local business community is not something we take lightly. By earning Accreditation from the U.S. Chamber of Commerce, a chamber shows its dedication to:
■■ Reviewing, improving, and promoting strong business practices ■■ Recognizing leadership and outstanding contributions to the community ■■ Supporting the principles of free enterprise and promoting pro-growth policies at federal, state, and local levels ■■ Establishing best practices and staying in-step with industry changes What other organization in your community is positioned to support your business in this way? If not the Chamber, then who? What I have learned of Denton in the past one year is that this community supports one another. The past 30 days have been TOUGH. We have all been affected in ways that cannot be compared to one another. And while it has been challenging, it has also been inspirational. The business-to-business and consumer-to-business support that has become our new normal, is anything but normal. Denton, your Chamber is so proud to link arms with you. Chamber members, future members,
community partners: we believe in you and we are committed to continuing this work, for the betterment of Denton’s economic future. In the spirit of working FORWARD and finding things to celebrate in this season of uncertainty, I’d like to congratulate the 35th Leadership Denton Class, chaired by Randi Skinner of RS Consulting. They have shown up faithfully over the past nine months and you will continue to see great things from them. Reach out to these folks in your spare time. Invite them to partner with you, serve on your board, or just ask them about the LD experience. I know they have a lot to offer. You can follow the Denton Chamber on Facebook to hear from the class about what participating in Leadership Denton meant to them. Congratulations again, LD35! ■■ Aaron Carey, Peterbilt ■■ Adam Smith, Peterbilt ■■ Amy Jensen, DATCU Credit Union ■■ Angeles Munoz, Denton ISD ■■ Billy Roussel, Make the
Move Realty ■■ Chloe Satterfield, Reecer Law Firm ■■ Clinton West, Professional Service Property Management ■■ Colby Berry, Hayes, Berry, White & Vanzant ■■ Deval Patel, Aave Cause Restaurants, LLC ■■ Dulce Petry, Mayday Manufacturing/Hi-Tech Metal Finishing ■■ Eddie Renz, ChemistCreative ■■ Frank Padgett, City of Denton Police Department ■■ Franklin Cornett, Grunden Financial Advisory, Inc. ■■ Gabby Keys, Guaranty Bank & Trust ■■ Gabriel Cruz, Texas Woman’s University ■■ Jay Lancaster, Canopy Capital Strategies ■■ Jeremy Wear, Medical City Denton ■■ Jessica Burchfield, Texas Woman’s University ■■ Jordan McDowell, Title Resources ■■ Justin Hess, Neighborhood Credit Union ■■ Keanna Stallings, City of
out. Register at www.meetup. com/TechmillDenton.
a different track — register for $7 for one day, or $15 for all three days. Times and speaker schedules to be announced soon. Visit stokedenton.com/ events.
Denton ■■ Kelly Peace, VERUS Residential ■■ Kenneth Williamson, North Rock Construction ■■ Kimberly Crain, First United Bank ■■ Kristen Howell, Children’s Advocacy Center for Denton County ■■ Lisa Cave, Point Bank ■■ Lisa Marie Shaughnessy, Sante Center for Healing ■■ M. Bryce Olson, Fathom Realty ■■ Michelle Harvey, North Central Texas College ■■ Preston Smith, Ciera Bank ■■ Shelli’ Gomes, Mobius Financial Advisor ■■ Stephanie Adams, Texas Health Denton ■■ Stephanie Neal, City of Denton Attorney’s Office ■■ Terrance Buzzard Jr., SMI Coaching ■■ Tyheshia Scott, Giving HOPE, Inc. ERICA PANGBURN is president of the Denton Chamber of Commerce and can be reached at 940-382-9693 and erica@ denton-chamber.org.
Calendar of Events With the COVID-19 pandemic impacting various sectors of the economy, many events have canceled or postponed, with some transitioning online. These are just some of the virtual events that are occurring in the coming days and weeks. Rise & Shine Yoga, hosted by Karma Yoga Denton, at www.facebook.com/KarmaYogaDenton. Start off your Saturday with self-care in one
of Karma Yoga’s livestreaming events. Saturday, April 18, 11 a.m.-noon
Coffee + Convo — Virtual, hosted Robert Frantz, registered U.S. patent agent and Stoke member, meets virtually on Zoom for a discussion about patents and protecting your intellectual property. Free. Register at stokedenton. com/events.
Tuesday, April 21, 9-10 a.m.
Lunch + Learn: “What Is Usability and UX?”, Stoke’s virtual session with usability and UX expert Erin Friess. Free. Register at stokedenton. com/events. Tuesday, April 21, 11 a.m.-noon
APIs and IPAs, hosted by TechMill and Stoke Denton, is meeting virtually on the fourth Thursday of the month via Zoom for a tech-centered hang-
LOW BACK PAIN? Auto & work injuries accepted. Mon. - Fri. 7-9, Sat. 7-6 I-35 at McCormick Se Habla Español.
(940) 566-3232 www.dentonchiro.com
FlintConf 2020, hosted by Stoke Denton, brings together entrepreneurs, creatives, freelancers, side hustlers and students to learn how to optimize available resources to start and grow a successful business. The three-day conference will be held virtually via Zoom. Each day will focus on
Wednesday, April 29: Hustlers (entrepreneurs, business owners, project managers) Thursday, April 30: Hackers (tech-focused and tech-enabled speakers) Friday, May 1: Hipsters (creative business owners and people working in art and design)
Abe Nayfa, AAMS®
Financial Advisor Dr. Melissa Noell
We’re Here to HELP You!
View obituaries and share condolences online at
DentonRC.com
Call or visit your local financial advisor today.
Denton Chiropractic Center
Dr. Susan Aurich
Thursday, April 23, 5-6 p.m.
Kyle A. Nayfa
Financial Advisor 324 Sunset St. Suite 100 Denton, TX 76201 940-565-0100 Member SIPC
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WHEN IT COMES TO YOUR BUSINESS, THESE NEW RAM TRUCKS MEAN BUSINESS. Your Full Service Dealer: Sales, Parts, and Service
Denton Fleet/Business Sales Classic Chrysler Jeep Dodge Ram 4984 South I-35 East exit 462 • 940-498-9800 www.classicdodgechryslerjeep.com Sales: Monday - Friday 8am - 8pm • Saturday 8am - 6pm Parts/Service: Monday - Friday 7am - 7pm • Saturday 8am - 5pm
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Enterprising Voices
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Denton Record-Chronicle
Could businesses be exposed to Some market prescriptions liability if virus is transmitted?
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efore the COVID-19 outbreak, most businesses were not exposed to potential liability for the transmission of communicable disease. This should be a new area of concern for most businesses, especially businesses that have significant physical contact with their customers and those that bring large groups of people together. As of the writing of this article, law firms have begun marketing themselves as leaders in COVID-19 litigation and some firms report they have already filed lawsuits. Most of this attention seems to be focused on cruise ships and their handling of the outbreak; but, like the virus itself, liability exposure could spread. In the legal system, like much of society, responses to new problems are addressed with old tools. The old tool that courts are most likely to pick up when asked to decide a business’s legal responsibility for transmitting or playing a role in the transmission of COVID-19 is the negligence standard. HIV was one of the last infectious diseases to capture the public imagination that posed a serious risk of death. In Texas, lawsuits were filed over both the transmission of and fear of transmission of HIV. Many of the cases in Texas involving the transmission of HIV were based on allegations of assault and battery. These cases involved sexual contact mostly without informed consent. More relevant to business, there were also several reported cases based on negligence theories against blood banks, hospitals, and at least one jail. Because HIV transmission required significant physical contact or transmission through the exchange of blood and other bodily fluids, the number of businesses that were likely to cause or play a role in the transmission of HIV was limited. This will not be the case with COVID-19, which appears to be transmitted very easily.
Sam BURKE | COMMENTARY
To win a negligence case, the person filing suit must prove the defendant owed a legal duty, the defendant breached the legal duty, and the breach caused injury to the person filing the lawsuit. In new situations, courts decide the legal duty question using a risk-utility test. The risk-utility test requires the balancing of the following factors: 1) foreseeability, 2) the likelihood of injury balanced against the social utility of the actor’s conduct, 3) the magnitude of the burden of guarding against the injury, and 4) the consequences of placing the burden on the defendant. Historically, the most important factor in this test has been foreseeability. In the case of COVID-19, it is certainly foreseeable that significant physical interaction will lead to transmission of the virus. In the short term, the cost of preventing the spread of COVID-19 is extraordinary. Government-dictated business closures and shelter-in-place orders have put the country into a recession and will likely result in the loss of many small businesses. The likely benefit is equally clear. Thousands of lives will be saved by preventing a rapid spread of the virus that would overwhelm our health care system. Courts would likely find a willing violation of current government restrictions that resulted in COVID-19 transmission to be the breach of a legal duty. The issue of legal duty in long-term is less clear. If the curve is flattened and businesses can reopen, will the transmission of the virus be foreseeable? How will courts balance the
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social utility of various businesses’ operations against the risk of COVID-19 transmission? And, will courts decide the magnitude of the burden (suppression of economic activity) is too great to impose a legal duty on businesses to prevent the spread of the virus? Like many things during this pandemic, the answers to these questions are not apparent. However, best practices will emerge, and I have a few recommendations. In the short and long term, your business should seek to be informed regarding following local, state, and federal guidance on COVID-19 prevention. County directives and the CDC recommendations are a good start. Those recommendations can be found at dentoncounty. gov, www.dshs.state.tx.us/ coronavirus and www.cdc.gov/ coronavirus/2019-ncov. When businesses reopen, low-cost measures to prevent transmission should be implemented. For example, frequent disinfection of commonly used surfaces. Lastly, and perhaps most importantly, offer clear guidance to employees to stay away from work and customers when they show signs of infection or illness. In my opinion, in both the short and long term, the most likely source of liability for any business will be the transmission of COVID-19 from an employee to a customer when the employee showed clear signs of infection. In closing, COVID-19 is an insidious disease — businesses should take reasonable precautions to prevent its spread to employees and customers. For now, do your best and stay safe. SAMUEL B. BURKE, a shareholder in the law firm of Alagood Cartwright Burke PC, is certified by the Texas Board of Legal Specialization in civil trial law. He can be reached at sburke@dentonlaw.com or www.dentonlaw.com.
Jonathon FITE | COMMENTARY
U.S. labor force was subject to state lockdowns. U.S. jobless claims have soared for three straight weeks as the economy went into a socially distant coma. During the 2007-09 recession, it took 27 weeks to reach 10 million initial unemployment claims. We got there in two weeks in the current recession. Nearly 17 million Americans have filed new unemployment claims since the mid-March coronavirus panic. A spooky chart from Bloomberg overlaid the market declines from the throes of the financial crisis in the fall of 2008 (and its eventually bottom in March 2009) to the current selloff. The implication was we are more like November ’08 vs. March ’09 — a cautionary tale. Yet, as the saying goes, history doesn’t really repeat, it just rhymes. What took months with respect to monetary and fiscal stimulus during the 200809 financial crisis has been executed in days. Three federal stimulus packages have been passed, in excess of a trillion dollars. A payment schedule obtained by The Washington Post showed initial payouts could be deposited this week. Mitch McConnell and Nancy Pelosi both promise more to come. On top of the congressional stimulus, the U.S. Federal Reserve has gone nuclear
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UPCOMING EVENTS
much as possible to stay open. “When our nonessential businesses had to start closing, that’s when we started seeing a shift in the way businesses were responding,” Gossett said. “We saw an immediate push for more takeout and delivery options, while retail moved to a full online push once they knew they were inevitably going to have to close and immediately got their websites updated.” In the meantime, many businesses have resorted to innovating their craft. Nonessential retailers including Recycled Books and Salted Sanctuary Soaps have moved online, and restaurants are finding ways to serve customers while their dining areas are off-limits. West Oak has started selling iced latte and cold brew coffee by the half-gallon. The company has also been selling coffee beans and other products online — which Fisher said allows customers to still enjoy their coffee, but from the safety and comfort of their homes as they ride out the virus. While long-term recovery hinges on flattening the curve and the development of a COVID-19 vaccine, Fisher said it’s idealistic to assume the economy will rebound soon. With federal programs propping up the economy and many establishments facing temporary or permanent closure, Denton’s downtown businesses are relying on their community. “It’s never been more important for those who are blessed to still have a job to support local — even if it’s just one purchase,” Fisher said. “To support local businesses has never been more important, and it’s going to be what helps get us through.” RYAN HIGGS can be reached at 940-566-6889 and via Twitter at @ryanahiggs.
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ince we penned last month’s article, major market indices whipsawed dramatically. Having plummeted nearly 30% off their recent highs as our March article went to press, the S&P 500 index fell another 12% over the following week. In a note we sent to our partners, we pointed out bargains were plentiful. While the Dow Jones Industrial Index and the S&P 500 were down more than 40%, The Wall Street Journal posted an article showing value stocks were the most attractive since the 2008 financial crisis. But there were some interesting differences from 2008. We believed this crisis was not a financial one, but a medical one. While data out of China is spotty at best, many indicators showed China was roughly nine weeks ahead of us. Italy was five weeks ahead of us and the growth rate of new cases was declining. This second derivative measure is the first signal to watch before things start getting better. We expected U.S. COVID-19 cases to surge coming weeks, and then tail off meaningfully. On Good Friday, Gov. Andrew Cuomo stated New York saw a negative net change in intensive care admissions for the first time since the coronavirus crisis began. We seem to be on the cusp of things going from bad to less bad — traditionally a key turning point in markets. Over the past couple weeks, markets have surged higher 20%-plus even while the economic data turned horrible. Brookings released a report showing more than 90% of the
in its money printing and lending operations. They are backstopping U.S. corporate bonds, junk bonds, mortgages, state and municipal debt on top of buying U.S. Treasurys in an effort to lower long-term interest rates. While policymakers dithered a decade ago, each new day seems to bring another trillion-dollar-plus backstop. In the meantime, testing capabilities, ventilator production and the acquisition of personal protective equipment are all ramping up dramatically. Most of us are shopping with disposable gloves and wearing masks in public. Even my socially active teenagers are resigned to stay home. Where will this lead? Will all these fiscal, monetary and personal prescriptions provide the needed, and sustained, market salve? No one really knows. This pandemic and our responses are unprecedented. But, tilting back to the Howard Marks memo that opened this column, he states that “the bottom line for me is that I’m not at all troubled saying (a) markets may well be considerably lower sometime in the coming months and (b) we’re buying today when we find good value.” Marks, and we, don’t find those statements inconsistent. Invest accordingly. JONATHON FITE is a managing partner of KMF Investments, a Texas-based pure pay-for-performance hedge fund. He is also a professor with the G. Brint Ryan College of Business at the University of North Texas. This column is provided for general interest only and should not be construed as a solicitation or personal investment advice. Comments may be sent to email@ KMFInvestments.com.
CHAMBER SPOTLIGHT
DOWNTOWN | CONTINUED ON PAGE 14A
but after that first week everything switched to individual meals,” he said. “We have put together up to 600 meals since; however, I’ve never been open for just take-out.” Although downtown Denton is home to a variety of businesses — food, retail, entertainment and more — Cartwright said many of them have a challenging road ahead. While he is fortunate enough to be his own landlord, he said the decrease in foot traffic meant rent payments have been difficult for many downtown business owners. Cartwright said he hopes to mediate discussions between businesses and landlords to mitigate impacts, which could include closures. Jessica Rogers, director of economic development for the city, said there are few businesses in the community that have not been impacted by the outbreak. According to the U.S. Chamber of Commerce, nearly a quarter of small businesses are on the brink of permanent closure. “The challenges facing businesses and economic development as a result of COVID-19 is something that we have not experienced before,” Rogers said. “We are hard at working planning for numerous scenarios that may come our way over the next few weeks and months. It is possible that a result of the pandemic will be some businesses that will permanently close.” Christine Gossett, executive director of Denton Main Street, said downtown Denton has faced challenges and disruptions to the status quo before, from an expansion of the highway system to the addition of retail supermarket centers in the city. While some permanent closures are anticipated in the downtown area, she said many businesses are adapting as
“It’s time to stop playing defense.” — Howard Marks, Oaktree Capital founder, in an April 6 memo to investors
NEW MEMBERS
CertaPro Painters of Denton ahardy@certapro.com (940) 435-1100
Lake Cities Pediatric Dentistry & Orthodontics smile@lakecitiespdo.com (940) 353-5437
Youngberg Law Firm
mike@youngbergfamilylaw.com (940) 498-2929 Interested in Membership? Call 940.382.9693 DENTON CHAMBER OF COMMERCE BOARD OFFICERS
Jill Jester Chair of the Board Jeff Reecer Chair-Elect of the Board Erik Clark Immediate Past Chair of the Board Carrell Ann Simmons Treasurer Shannon Mantaro Vice-Chair, Membership Development
Lee Ramsey Vice-Chair, Special Initiatives Marty Rivers Vice Chair, Economic Development Rick Wick Vice-Chair, Affiliate Relations
DIRECTORS Lee Allison • Jason Bodor • Roy Culberson • Brian Danhof Sheryl English • Jim Fykes • Monica Glenn Gary Henderson • Michelle Houston • Jeff Pritts Pat Sherman • Randi Skinner • Kristi Stokes EX OFFICIO DIRECTORS Hugh Coleman Pct. 1, Denton County Commissioners Court Hank Dickenson Chair, CVB Advisory Board Carine M. Feyten, Ph.D. Chancellor & President, Texas Woman’s University Kerry Goree President, Denton Black Chamber of Commerce Mia Price President, Denton ISD Board of Trustees Neal Smartresk President, University of North Texas Chris Watts Mayor, City of Denton
414 W. Parkway Denton, TX 76201 940.382.9693 Denton-chamber.org DE-26121