D’mai Urban Spa was no stranger to Park Slope’s thriving Fifth Avenue brick-and-mortar scene in Brooklyn, New York. Customers used to fill the shop’s schedule with appointments for luxury massages and facials. Having survived the economic recession in 2008, Daniella Stromberg — a longtime Park Slope resident and owner of the small luxury spa — never lost faith in her business. But all that changed when the Covid-19 pandemic forced her to shut it down. Now she does advocacy work to protect independent business owners.
Since March, when much of the country imposed lockdown measures to keep the novel coronavirus at bay, small businesses have taken a hit. In September, Yelp released its latest economic impact report showing that 60 percent of the business closures on its platform were permanent. Not even federal or local assistance such as a loan from the government’s Paycheck Protection Program (PPP) under the CARES Act was enough to help small businesses stay afloat.
Without customers and income, owners struggled to not only pay their employees, but also negotiate their rent. Many business owners, like Stromberg, are facing huge fines and legal battles with landlords for breaking leasing contracts.
“I try not to feel hopeless. I’ve tried to feel like we will get through this,” Stromberg said. “But my heart is really broken right now. My business was very special to me, and very special to the community, so I’m a little bit raw.”
Across the country, small-business owners face uncertainties for the future. Many are waiting for the perfect time and location to start all over again, while others are pivoting to different professions like real estate or political lobbying. In some places, local businesses have long been embedded in the social fabric of a neighborhood. Black-owned businesses, in particular, which serve as success stories amid rampant racial discrimination nationwide, have had to make the heartbreaking choice to permanently shutter a historical legacy in their community. With the pandemic exposing the cracks in society, some owners like Stromberg have turned to community activism.
Vox talked to three small-business owners who had to permanently shut down their ventures due to Covid-19’s economic challenges and learned what they plan to do next.
“I’m kind of like, do I want to rebuild an industry that’s treated that way, or should I get into something safer?”
Eric Bowler, 42, owner of Fortune club and Revelry restaurant in Portland, Oregon
My background is actually as a DJ. About eight years ago, my wife and I decided that we wanted to move back to Portland from Los Angeles, so we did. The opportunity for my club, Fortune, came up about six years ago, and from there, we just kind of grew our little company up to six different businesses.
Fortune closed partially due to a years-long dispute with our landlords, which we were able to fight pre-pandemic because we were open and able to make money to fund the legal site. But with no revenue coming in during the pandemic, we couldn’t afford a pair of lawyers to stay open anymore. There really haven’t been protections for commercial tenants. I know in Oregon and Portland, they extended the eviction moratorium for residential people. They also put some protections in place for mortgage holders, which is great for building landlords. But when it trickled down to the tenants, we are just taking the brunt of the whole thing.
I also owned another restaurant called Revelry that won Best New Restaurant in Portland in 2016, but we had to completely close that permanently earlier in the year due to Covid-19, too. So I’m pretty well-versed in shutting things down. We got PPP, and that gave us a brief glimmer of hope. But that was basically a two-month fix, and we’re in month eight now.
It’s crazy to see the charts of how the rich have gotten so much richer during the pandemic, and then everyone else was kind of left fighting for scraps. It’s frustrating to see other industries get total bailouts, while hospitality places, live music venues — which we’re kind of like a hybrid of those — are just totally left out. A lot of places are able to reopen with online sales or other ways to do what they do, but we survive on putting people in a place to socialize, and I agree that that’s not safe right now. But there needs to be some sort of a bailout or assistance for places that fall into that category, because they’re a huge part of the economy.
I’ve worked in hospitality for almost 20 years, so it’s such a huge part of what I am and what I do, and being a small-business owner, you definitely put in a lot of extra hours, which is a huge part of your life. I’m kind of like, do I want to rebuild an industry that’s treated that way, or should I get into something safer?
Since we closed, I’ve definitely rebranded myself as the 24/7 dad guy, and I love it. My oldest daughter also started kindergarten, so collaborating with my wife on kindergarten lessons has been pretty awesome. My wife is my business partner in everything.
I’m also studying to get my real estate broker’s license so that I have something I can do while I’m at home watching the kids. It’s something I potentially would want to pivot to the longer this goes on. I’m like, “Okay, do I wait another three or four months for the vaccine? Or is it going to be years from now before I’m back to what I was doing?” So I want to at least have some sort of backup, just in case it takes years.
“I feel like a part of my identity is gone in the process. It’s pretty much all I’ve done.”
Nick Muscari, 39, owner of Nick’s Sports Grill and Lounge in Lubbock, Texas
I started the business in 2010, and before that, I bartended. I just always wanted to have a bar, and my partners approached me to run a place for them.
When the governor shut us down for the first time in March, we did to-go stuff, but that was a struggle financially. When we finally got to reopen, things were pretty good, because we had our regulars. I had the PPP loan, and my landlord at the time was kind of working with me on rent.
But all of a sudden, the state shut us down again. Everything changed. I was about to have to start paying full rent, and the PPP money was gone. With no timetable set for reopening, it just didn’t make financial sense. There’s no way I’m going to be able to pay rent, pay the staff, and do it all over. We weren’t like a hardcore bar. We were a sports bar.
Lubbock thrives on Texas Tech [University] and football season, but now our stadiums are limited to a certain percent capacity. There’s a lot of small businesses — hotels and restaurants — that depend on those six home games a year to really carry them throughout the year, and the way things are is just really bad right now.
Ultimately, I decided to close and move all my stuff out before I had to pay rent. I didn’t expect the pandemic to last as long as it did. I feel like a part of my identity is gone in the process. It’s pretty much all I’ve done. I’m only 39, and I opened when I was 29. It’s pretty much my whole adult life.
Right now, I’m just on unemployment. I’m also trying to help some friends who have another restaurant, though I don’t want to get involved in too much stuff right now with no real food for the future. At the same time, I also have a pending lawsuit since I broke my lease. So owning anything really isn’t in the cards right now. I’ve just been going to the gym, doing stuff around the house, and not a whole lot, really. My parents live in Florida, so I went to visit them for a week. I’m just trying to make time go by.
I would definitely like to be a small-business owner again, once I figure out how to clear up the lawsuit as well as my business debt. I really have never done anything else except work in small-business restaurants — it’s really all I know. And I know I didn’t close down because of something I did. I believe that the government knows they made a mistake and won’t do it again.
“The loss of my business is more than just the loss of a business. It’s the loss of significant revenues in a community.”
Daniella Stromberg, 55, owner of D’mai Urban Spa in Brooklyn, New York
I’m a resident of Park Slope, my business was in Park Slope, and it was immediately embraced by Park Slope. My day spa was really a neighborhood institution for over 17 years. I opened it because it was a natural extension for me. I have been working in holistic wellness on the private side with individual clients, and I really wanted to be part of the very vital, independent entrepreneurial movement that was happening on Fifth Avenue in Park Slope. I wanted to walk to work, and I wanted to have a brick-and-mortar and be part of an exciting, young experience.
I never did have a worry, until the pandemic hit. I knew early on that it was going to be a really serious, life-changing economic changing event. It was a fucking nightmare. I shuttered my business on March 13, and I immediately reached out to my landlord, because rent was the biggest worry I had. And I sent him a very rational kind of, “We’re in this together, looks like the pandemic is gonna hit long and hard, we should talk as soon as you have a free moment about how you and I are gonna get through this.”
But no, he really had no sense of “in it together” at all. In fact, he held me to my scheduled rent increase. With my business being close contact, I didn’t reopen until phase 4 in July, and it was a struggle.
I’m mourning a loss. The loss of my business is more than just the loss of a business. It’s the loss of significant revenues in a community. But I feel like my brand is strong, and I have a lot of day spa in me. I’m still looking for the right place to continue my business, but I’m just not sure when or where. In the meantime, I’ll continue to stay focused on seeing how we can save our independent businesses. I’m doing advocacy work with small-business owners on the local level. I’m not going to work for a couple of months, and I want Covid-19 to settle down. I’m married to someone who works at Kings County Hospital, so being in a partnership helps with the bills. It isn’t easy, but we prioritize and cut back.
For now, what I need to do is to focus on legislation, because an entrepreneur should not be left to find a nice landlord. Legislation should change because the landlord should not be allowed to find loopholes to mandate a renter to stay, in the final months of relief, during an extraordinary time such as a pandemic. There should be government protections for that. And there is a bill sitting on the state floor that should have been voted on. [The legislation would suspend all rent payments for small-business commercial tenants who were forced to shut down their business, and certain mortgage payments for landlords for 90 days in response to Covid-19.] I plan to write postcards and make phone calls.
We are sort of past the two-party system, and there’s a global united group of very, very wealthy people working together and robbing resources from our planet and from the rest of us. And we need those resources to stay healthy. This never had to happen. Small businesses could have been saved.