BY SARA TABIN
Daily Post Staff Writer
Sales at Palo Alto’s Town & Country Village shopping center are down 60-80% this month, landlord Jim Ellis of Ellis Partners told City Council last night (Sept. 14), as retailers struggle for survival amid the coronavirus lockdown.
“It has been brutal,” said Ellis.
Sales are down even though some businesses have reopened after extended closures. Ellis said many businesses won’t reopen ever again.
Some, such as Mayfield Bakery and Patrick James, have already announced permanent closures.
Ellis said the shopping complex went from having a 6-7% vacancy rate to a 15% vacancy rate and is headed to a 20-25%.
Ellis’ comments came during a council discussion Monday about how the city can help businesses.
He said restaurants that aren’t very high-end are likely to close in Palo Alto because of high costs, including the $15.40-an-hour minimum wage. Ellis suggested reducing the minimum wage temporarily to help businesses. He said utilities in Palo Alto, which are more expensive than neighboring communities for businesses, causes a lot of difficulties for his tenants.
Part of the problem for Town & Country’s businesses is that Palo Alto High School and Stanford are effectively shut down, which means fewer customers in the area, said Ellis.
Councilwoman Lydia Kou said she would want to hear from workers, who are struggling with the high cost of living, before approving a temporary reduction in the minimum wage.
Lower sales will likely mean financial problems for the city.
Sales tax collections were down 26.6% between January and March this year, according to a new report from City Manager Ed Shikada. The lockdown began in mid-March, so the report doesn’t reflect the full impact of local business closures.
Really sad about the sufferings of these business owners.
I agree, and it’s also sad that these business owners were not more vocal and disobedient, against the Covid guidelines. They should have joined forces and protested loudly, with community support, but people seem to care more about virtue signaling BLM and other nonsense.
If we had all been stringent and followed the guidelines we would be reopened again just like Europe is. The folks who refuse to wear masks and don’t take this serious are the ones causing all the retail carnage.
Sweden didn’t have any mask mandates or lockdowns and they defeated the virus. Masks were imposed here after the epidemic ended. You can keep testing and finding “positives”, but so what? Most people who tested positive have no symptoms. It’s all fear-mongering and nonsense.
Alvin,
Believe me, I was a very vocal opponent of the lockdowns. Spoke at the City Council roundtable discussions condemning the lockdowns. I got nothing but frowns, and actually push back against my comments from city council people. Then to add insult to injury the news outlets deleted my posts! I got name called such as “granny killer”, and people saying they were glad they did not live near me. All sorts of ridiculous fear-based idiocy.
I agree! Lawlessness, illness and racism are our only hope!
I’m just kidding, and I know you are too.
No one cares about financial problems of the city. They could close half the departments and no one would notice.
“Councilwoman Lydia Kou said she would want to hear from workers, who are struggling with the high cost of living, before approving a temporary reduction in the minimum wage.”
I guess not having a job at $15.20/hour is better than having one at current market values.
The true minimum wage is $0.
Absolutely. Minimum wage laws, including any laws that interfere with freedom of contract, should be abolished.
If sales are down 80%, it sounds like the value of the location has significantly diminished and major rent reductions are in order for these businesses. The value of the employee’s labor has not changed so it seems absurd that this rich dude wants to balance the budget for the tenant businesses by screwing the low-income people who are taking on more risk than ever in coming to work each day.
Now that school and work are virtual. The value of being close to google or Stanford has diminished. Move to a cheaper area. Don’t have to live in a trailer or an RV. Have wifi. Why not?
Note that Mr. Ellis doesn’t mention a reduction in per sf rents at Town & Country as an important part of the solution. I’ve spoken to several owners and while labor costs are a concern, the cost of rent and the mandatory revenue share at Town & Country can be equally oppressive. For Ellis it’s better to keep rents high and have spaces sit empty than to lower rents and keep businesses open.
As a tenant, I’m offended by Ellis’ appearance at the counsel to seek a reduction in minimum wages and utility costs. [Portion removed — if you have proof of this, please send it to us.] Palo Alto City should use its constitutional eminent domain power to expropriate the mall at current value and use it for the public good of Palo Alto residents
Take it out of the pockets of the low-wage employees and give it to the business owners? That’s your solution? Let the stores close and come back next year.
We have to thank the media shrills who heightened public fear of a lab-manufactured virus an advocated for harsh lockdowns, unnecessary social distancing, and useless mask policies over the risk of .oooo3% death. The media called those businesses who wanted to stay open, who knew how to naturally keep themselves healthy, the media called these businesses “rogue” people. There was no debate, no due process, no questioning the dictatorial shutdowns. None whatsoever. The media has done a spectacular job in scaring people away from the stores and from the restaurants.
Ellis IS right about the high cost of Palo Alto Utilities which for the last several years has run a $20,000,000 “surplus” from over-charging all of us. That money keeps getting funneled back into the General Fund and so PA Utilities can keep preaching conservation then telling us we conserved too much so they have to keep raising rates!
Let the city lower the utility rates already! And what’s happening with that suit against the over-charges filed by a citizen a year or so ago?
Why is Jim Ellis not waiving or reducing rents for 2020? He can collect his losses from the $2T Fed fund. That way, retail businesses can stay open and pay regular wages, or even higher, as they are risking their lives daily?
As a former employee of a cupcake place in the shopping center i dont feel sorry for these business owners. They could of had a team and one that assisted with sustaining. But instead they saw what should be their team as disposable and the blame for down sales. They should also thank their genius target market across the street for heading the shut downs. Yet they still think there is business to be made….
Dont know what it will take for pop palo altos bubble. They poped it themselves and still think nothing about their approach has consequences..
A bet my money the real estate value for that shopping center will go insanley down for palo altos liking and they will sell the property of to yet another developer in denial.
Wait, so this guy who is used to collecting huge rents and wants to keep his over-inflayed income flowing goes to city council and suggests lowering the lowest paid workers wages?? Outrageously craven. Lower the rents. And if he doesn’t do this on his own volition, impose a large tax on unoccupied retail space.
How about reducing rent and taxes, rather than forcing workers to bear the burden with lower minimum wage, when many are already struggling to make a living in this area?
Ah, it doesn’t take much to get the local communists to come out of their holes and insist the government should run this shopping center. How about we leave Ellis alone and let him figure out on his own how to survive. He’ll figure it out without the help of economic geniuses like Lydia Kou.
Does no one remember the fines imposed on you if you stayed open as a business? Police showing up at your door because you dared to make a living in an effort to not lose it all? Foes no kne remember the accusations that these shops were Covid breeding ground, that they were granny killers? There are churches who still cannot hold worship folks! The press was as much to blame for the hysteria. I spoke vehemently against the lockdowns from the beginning, defended the the art gallery owner the press called “rogue”. Shame on you people who are still afraid, still wearing masks! Why do you think anyone would want to go shopping when the mask represents the fear of infection. How will a thin piece of paper protect you from a virus when even the CDC admits the mask does not filter out ash particles!