Report: COVID short-circuited city’s ‘uptick’
STAMFORD — Before coronavirus, Stamford was cruising.
For most of the first three months of the year, the number of unemployed residents was low and falling. The workforce was growing. The total value of produced goods and services was solid. An increasing number of apartments were being built and people were renting them.
“We were on an accelerated uptick. We’d been on it for the previous eight quarters,” Director of Economic Development Thomas Madden said Friday. “It was amazing. We were the envy of the state. Our only concern was retail, but that was because of what’s happening in the industry with the switch to online sales.”
Now that’s the least of the city’s concerns.
The unemployment rate is a worrisome 9.9 percent, higher than the state average of 9.3 percent, according to the latest information from the Connecticut Department of Labor. Some stores and restaurants that closed under state orders to prevent spread of COVID-19 may never reopen. Officials are waiting to see how many property owners will be able to pay their taxes, which account for more than 90 percent of the
revenue. Layoff notices are on their way to an as-yet-unknown number of city and school employees.
Madden’s newly released firstquarter report, delayed because of the difficulty in obtaining information in the fast-changing economic environment, shows indicators at the end of the quarter hinting at the financial fallout that was coming.
The unemployment rate had ticked up a few tenths to 3.9 percent.
Madden wrote that his office sees the pandemic evolving through three phases.
The 3 stages
In the first, the Urgent Phase, the city and state would work to coordinate a “rapid public-health response” to contain the virus, Madden wrote.
In the second, the Stabilization Phase, expected to last 10 to 14 weeks, the number of new COVID-19 cases and the death rate would fall, and hospitals would increase capacity. But it would be critical for citizens to wear masks, wash their hands and keep their distance, Madden wrote.
In the third, the Recovery Phase, expected to last eight to 10 weeks, there would be a marked decrease in the number of new cases.
“We are just coming out of the first phase,” Madden said. He’s worried about the second. “We were hoping to come out of the Stabilization Phase in the fall if everybody does their part wearing masks and social distancing. But people aren’t doing it as much. They’re saying, ‘We’re done, we’re good,’ ” Madden said. “There could be reinfection, which would reset us to phase one.”
Eying openings
Some companies are looking to reopen offices in the fall, which would help restaurants, delicatessens, dry cleaners, auto repair shops, cleaning services and other businesses, he said. Other companies want to wait until January, hoping there is a vaccine by then.
His office has been tracing time trials for the vaccines under development, Madden said.
“A vaccine may not show up until the second quarter of 2021,” he said. “The question is how we keep people in business until then.”
He thinks the federal government should issue two more funding packages to keep people and companies afloat, Madden said.
“There are chain reactions happening in companies,” he said. “Supply chains have been affected, for example. If stores don’t have stuff to sell, advertising agencies are affected. Unfortunately we’re going to see additioncity’s al closings. If a company goes out of business, how do they pay their portion of unemployment benefits?”
His office now is counting how many Stamford property owners paid their taxes on July 1, which may indicate how close the Board of Finance came in estimating city revenues for 2020-21.
About 40 percent of property owners pay their taxes through their lending institutions when they pay their mortgages, Madden said.
“The other 60 percent is an unknown,” he said.
It’s the reason finance board members did not raise taxes for this fiscal year and cut the city and school budgets a combined $32.2 million. Mayor David Martin and Superintendent Tamu Lucero are seeking wage freezes and a health-insurance change from 14 city and school unions to avoid layoffs, but so far only two unions have agreed.
The numbers of COVID-19 deaths and cases are falling in Stamford, but the economic consequences are barely past the starting line, Madden said.
“We are just beginning to feel the effects,” he said. “This is a long-term event. Most people are not prepared for a long-term event.”
Still, the city’s strengths are showing, the economic development director said.
Occupancy rates for 48 apartment buildings citywide, calculated at 93.8 percent last month, jumped to 96.9 percent, Madden said.
“We had about 600 apartments available and about 300 were taken,” he said. “New Yorkers are finding Stamford to be a good alternative. Things are more spread out, rents are cheaper and there are plenty of bars and restaurants.”
There may be a similar trend with commercial space, he said. His office is talking to three companies looking to leave New York. One reason is elevators. “Some companies are in buildings 40 or 50 stories tall, and only so many people are allowed in an elevator at once,” Madden said. “They think people may have to wait two hours to get up to their office.”