Downtown awaiting a ‘chance to exhale’
Diana Garcia spends most of her day alone in the gift shop she manages, one of the few stores with lights on in her corner of the tunnel underneath Louisiana Street. The three neighboring restaurants that once brought hundreds of people past Glamour’s Gifts — and many of them inside — remain dark, more than a year after the coronavirus pandemic emptied downtown office towers of workers.
“No one is ever here,” Garcia said.
Few areas of the local economy were hit as hard by the pandemic as downtown and few face as much uncertainty as the service sector — shops, restaurants, dry cleaners, hair salons — which depends on people coming to work in the city’s center. Even as the pandemic’s end appears in sight and companies begin to bring workers back to the office, it remains unclear how fast employees might return downtown and whether they will come back in the
same numbers.
Already, some companies are planning to continue the remote working arrangements forced by the coronavirus and embraced by both employers and employees. The financial services company JPMorgan Chase, which has some 2,300 employees in two buildings downtown, recently said it will keep some positions remote and reduce the number of people in its U.S. offices, reconfiguring them to reduce the space it uses by up to 40 percent.
The chemical company LyondellBasell, which has about 2,300 employees in its downtown office, said it will consider flexible, remote alternatives to in-person work. The pipeline company Kinder Morgan, which has about 20 percent of its 2,100 employees working in its headquarters on Louisiana, said it has not determined when and how it will bring back other workers.
A recent survey by Central Houston, an organization that focuses on the redevelopment and revitalization of downtown, found that 75 percent of downtown employers expect at least 10 percent of their workforce will transition to a mix of in-person and remote work.
Only about 18 percent of employees are working from the office downtown, according to Central Houston’s survey. About half the companies said they expect to bring 50 percent of their workers back to the office by June, and 70 percent said they expect to have half their workforce in the office by September.
Manish Patel, owner of Deli Deluxe, underneath the office buildings on McKinney, wonders if that will be enough. His sales in January plummeted to $300 a day and have since rebounded slightly to about $400 a day. That’s not enough in sales to break even.
When business was at its slowest, he had been able to get by with help on rent from his landlord and a federal Paycheck Protection Program loan. He said he had to go from six employees to three, some of whom have been with him since he opened in the tunnels nine years ago.
“Maybe I can last one more year,” Patel said, “but I’m broke already.”
Life underground
Downtown Houston is connected by about 7 miles of tunnels, developed over the years to allow people to move through the central business district in air-conditioned comfort during Houston’s sweltering summers. Even as downtown streets appear deserted, the tunnels teem with thousands of people grabbing lunch, getting a haircut or making a quick stop in a convenience store.
The pandemic ended that, forcing the shutdown of businesses, restrictions on indoor dining and the exodus of downtown employees to home offices and kitchen tables. When the restrictions were lifted in May, Glamour’s Gifts reopened , but the nearby restaurants — Wendy’s, Ninfa’s Express and Alonti’s Cafe — didn’t. Alonti’s closed for good.
Garcia, the manager, had to run Glamour’s Gifts on her own after the store was forced to cut the three other employees. Before the pandemic, Garcia estimates she served at least 200 customers a day. Lately, she’s been serving a couple dozen.
“Now,” Garcia said, “they say everybody is coming back in June.”
Certainly, that’s the hope of downtown service businesses. Activity is already picking up as vaccinations increase, downtown businesses say, but it remains far below pre-pandemic levels.
Downtown parking transactions, for example, rose sharply in March to nearly 25,000 per week, according to data from the Greater Houston Partnership, but are still down 30 percent from the roughly 35,000 transactions per week in February 2020.
In the Allen Center food court, Jimmy John’s, the sandwich shop chain, said sales are still down by about 65 percent from pre-pandemic levels. Leaf & Grain, a fastcasual vegetarian restaurant, had a line at its counter, but one of its owners said sales are still down by about 50 percent.
Increasing consumer traffic is “a chance to exhale,” said Deets Hoffman, president of the Leaf & Green chain, “but not really a celebration moment.”
Right direction
Even above-ground eateries continue to struggle with a limited workforce commuting downtown. Four of the nine restaurants with leases in Finn Hall on Main have yet to reopen.
Johnny Reyes, food and beverage manager for Midway, which oversees the restaurant tenants at Finn Hall, has been counting heads in the tunnels to provide information that could help the still-closed restaurants to reopen. In the last week of February, at the noontime height of the lunch rush, he counted 87 diners in Pennzoil Place at 711 Louisiana and 40 in Understory’s food court at 800 Capitol.
Volume nearly doubled in March at Understory, according to his count, while Pennzoil’s stayed flat.
“We’re going in the right direction,” Reyes said. “For me, that’s most important.”
It’s hard to say when the downtown workforce will return to pre-pandemic levels, said Bob Eury, president of Central Houston. The Houston utility CenterPoint Energy said it plans to bring all its employees who have been working remotely back to the offices at 1111 Louisiana in June.
Also in June, the University of Houston-Downtown, which has nearly 1,400 employees, said it will bring full-time staff on campus at least three days a week. By July, the staff should be working regular Monday-Friday schedules, the university said.
But some companies are still figuring out when they’ll bring employees back and how many might continue to work remotely.
Porter Hedges, a law firm on Main, still has most of its 220 employees working at home and has not set a timetable for their return to the office.
Employees at EOG Resources are working in the office roughly half the week and the other half at home as part of the company’s phased reopening strategy. A spokesperson could not say how long the policy would remain in place.
Personal interaction
Developers and property managers, however, are confident that offices will eventually fill with workers again. Travis Overall, executive vice president for Brookfield Properties, which owns 10 buildings downtown, said he doesn’t believe the pandemic will lead to a major restructuring of the downtown workforce over the long term.
COVID-19 may have changed perceptions and expectations about remote work, offering employees the flexibility of working from home and employers the flexibility to save on office leases. But those pandemic-driven changes, Overall said, won’t stop companies from bringing back their workers, and it won’t stop employees from wanting to come back.
“How can you really recruit and retain talent,” Overall said, “or train people, or really collaborate for that next great idea that’s going to drive your company’s growth, if you don’t have the personal interaction?”