Reopening economy will take time after governors, mayors lift and ease COVID-19 orders

By Mike Sunnucks | Rose Law Group Reporter

Reopening the economy is a lot more complicated and could take longer than simply governors and mayors lifting business closures and ‘shelter in place’ orders.

David Larcher, president of Phoenix-based Vestar, said stores that have been closed will take a while to ramp operations back up. 

Larcher said retailers will have to update and bring in new inventories, mark down existing products and restart distribution channels. They will have to re-hire previously laid off or find new employees.

“They have to staff their stores which doesn’t happen in a week or two,” said Larcher during Rose Law Group’s New Economy (Virtual) Power Lunch on Friday.

Vestar is the developer of shopping centers in Texas, California and five other Western states including Tempe Marketplace and Desert Ridge Marketplace in Phoenix.

Larcher said 20 to 25 percent of the stores in Vestar’s centers are still open because they are deemed essential.

Rose Law Group attorney Tom Galvin said retail stores in Arizona that are not already open can reopen for curbside operations on Monday, May 4th and then reopen their stores on Friday, May 8th.

Larcher does not expect social distancing to worry customers going back into previously closed stores pointing to the fact that grocery stores and big boxes such as Walmart and Target have remained open during the Coronavirus pandemic.

But he is concerned about the amount of job losses during the pandemic and how that impacts consumer behaviors.  Larcher put an expected 20 percent national unemployment rate stemming from the pandemic into perspective. 

“That’s one in five people driving down the street that don’t have a job,” Larcher said during the Rose Law Group virtual lunch event.

He also expects COVID-19 to hasten the demise of some already struggling retailers. The industry has already been grappling with marketplace changes spurred by and e-commerce.

Jim Mullin, principal with Scottsdale-based Mullin 360 Development, is one of the leading auto mall and car dealership developers in Arizona and the U.S.

Mullin said luxury car brands are seeing sales down 60 percent with total car sales down by 50 percent since COVID-19 hit the economy.

“Those are sales way off,” Mullin said of the high-end car brands and the pandemic’s impact.

He said auto manufacturing and supply chains will be have to be recalibrated and ramped back up as more states reopen.

But he also pointed out that more aggressive economic shutdown policies, like in Michigan, will impact automotive supply chains.

Mullin said car sales in rural areas are down 20 percent as those communities mostly see fewer COVID-19 cases and in some instances less economic impacts than bigger cities and more urbanized regions.

Galvin said as other states such as Georgia and Texas reopen shuttered businesses including restaurants Arizona can learn which practices and protocols work, and which do not.

Reopening movie theaters, for example, are challenged by delays in Hollywood movie productions and releases because of the pandemic.

Some states allowing restaurants to reopen but only at 25 percent capacity will be difficult to make work business and revenue wise.

Arizona Gov. Doug Ducey has extended the state’s ‘stay at home’ orders until May 15th but is allowing retailers to start to reopen next week.  

Retailers, restaurants and car dealers are not the only businesses and organizations forced by COVID-19 into unprecedented changes.

Peter Bezanson, CEO of BASIS Educational Ventures (the parent company of BASIS charter schools), said the pandemic has prompted major changes for this school year including Advanced Placement tests being shortened and done online. Bezanson said BASIS has also adopted “do no harm” grading for its last quarter. That means students can only improve existing grades with schools operating online. “We had to change our grading policy for the last quarter of the year,” he said.

Bezanson said charter and other schools will be challenged  logistically and physically on how to abide by new social distancing rules that might be expected or mandated for the fall semester. That can include how much space might be required between desks and how classroom and hallway capacities and flows are managed.

“It’s going to be really, really hard,” said Bezanson said during the Rose Law Group event on Zoom.

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