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When The World Stopped

 June 15, 2021 at 6:31 AM PDT

WHEN THE WORLD STOPPED…. Hi there, I’m Claire Trageser. an investigative reporter here at KPBS…. we’re trying something new. It’s sorta a relaunch of the KPBS Investigates podcast. We’re creating a space to take a deeper dive into some of the issues we cover here at KPBS. right now, It’s the middle of June 20-21. And..finally…. the pandemic-related business restrictions are all about to be lifted. It's kind of the unofficial end--or hopefully the end--of what has been a really trying and confusing time for all of us. I don’t know if you can even remember back to the very beginning of the pandemic--but I think a common feeling back then was that no one had any idea what to expect. For me….one of the things *I* remember? Was some news about one of my favorite coffee shops, Project Reo Collective. Here’s one of the owners, Tommy Walker. [00:03:33:22] Project Real Collective started in 2017. The idea came up of creating a space that neighbors could get together and and hang out in and get to know each other. It was owned by four families who wanted a community gathering place in their neighborhood of Paradise Hills.. That’s a lower income community where mostly people of color live. And after it opened - it really became that - a community gathering spot.. It was always full of people on laptops, meeting over coffee.. BUMP PROJECT REO AMBI SOUND HERE But...At the very beginning of the pandemic Project Reo Collective...had to close. BEAT Now jump forward all the way to the end of 20-20. Finally….vaccines were on the horizon and it really felt like we were going to come out of this thing. But . there were still some businesses that couldn’t hold on any longer. And one of those was A&B Sporting Goods in North Park. It had been in the same family for three generations….selling things like Little League uniforms and sports equipment. The owner Greg Schloss did his best to keep the doors open. 16;10;31;25 I tried to keep a positive attitude and work my way through it. But, uh, you know, I knew that I was going to have to make a difficult decision. But he just couldn’t hang on any longer … and closed. There are so... many….stories of what’s happened to small businesses during the pandemic,.. when they close, losses are felt by their owners, their customers, and their neighborhoods. a journalist, an investigative journalist, I always want to quantify these kinds of stories with numbers. So today on KPBS Investigates… I go on a quest for that data… And yeah...I do end up finding some numbers about how many businesses have closed...and those numbers are...surprising... really dig in and better understand the struggles of local business owners behind those numbers… I introduce you to an entrepreneur who’s been through a lot-- From openings and closings to a struggle to get loans to dealing with child care to the impact of racial protests on her business. All just in basically a little more than a year. Veronica clip Everything was perfect and then the world stopped. BEAT More….right after a quick break. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx MIDROLL 1 Claire: Ok so….to start, I’m gonna introduce you to a woman named Veronica Densey. She owns a massage therapy business called Nola in the East Village--but she didn’t have a straight path to get there. SOT my brother's a Marine and my dad is in the Navy. And I just knew I always wanted to be like a G.I. Joe, kind of a tomboy, you know? Veronica is half Black, half Filipino, and she says her parents wanted her to go into the Navy, but she’s scared of water, so she settled on the Army instead. SOT I was in and I was doing great and I was like fast track and high speed, all that stuff. But during a deployment I was injured and that injury pretty much ended my career. I was med boarded out of the military not too long after that. So I came home and I was an angry person. So she decided to try yoga - lots of people deal with stress or anger with yoga.. But during her first class she just could not handle it. SOT I struggled through the entire class and I was upset and angry. And the yoga instructor comes outside and he was like, you know, I'm also a massage therapist. He's like, I feel like you should try massage. He was like, massage has the same healing powers that yoga does. But it also, you know, it's it's active. She tried it and loved it...and basically her career in massage therapy was born. She started out working at a hotel chain giving massages, but she says she’s not good at working for other people. SOT I was seven and a half months pregnant and I came home one day and I looked at my husband and I'm like, we're starting a business. And he was like, what? When, where? And I was like, Now I'm finding a place today. And I did. And he thought I was crazy. And I think he was kind of angry, too. But he got over it. And for a while, things were going really well. Veronica kept building up her business and her family -- she ended up having another daughter, and eventually a third. She went from renting a room for her massage therapy at an acupuncture business to finally renting her own space in the East Village. Things were looking up. 10:38:05 We got all our stuff in here. We moved in here. Everything was perfect and then…. the world stopped. BEAT It was March 2020, the pandemic came, and everything was shut down. 10:38:51 that first shut down, you know. No, no, no debate for me, you know, on it. No problem. Not a big deal. I mean, it ended up being a really big deal, it was like seven or eight months. Right. She spent all summer and fall going through the openings and closings cycle… She could open for a bit, get some clients in… But…. then the state would shut businesses like hers back down again. And she started to reach a point where she thought she might lose her business... SOT 00:08:37.250 I was considered self-care with nail studios and stuff...But I, I was trying to find a way; my my clients were suffering, a lot of them were suffering. So many businesses across San Diego County had to deal with so much uncertainty this past year. Restaurants could open at limited capacity, then they had to close indoor dining, then they had to go back to takeout-only.. And everything was always changing...all the time... And for Salons and other beauty businesses ... for part of the time they could only operate outside. In fact, I even heard about a waxing salon that was trying to do bikini waxing outside, would be hard to convince customers to do that. Veronica’s business Nola did end up making it through the first shut down. But lots of businesses like Project Reo Collective... didn’t. BEAT FADE So….for the past three months, I’ve basically been on this mission to find out exactly how many businesses in San Diego county have closed. BEAT You would think this would be an easy question to answer--I mean, honestly, you can just Google a business and see it’s “Permanently Closed.” So it seems like Google would be able to produce some data that says, here are all the businesses that closed in San Diego County. And I’m sure they could do that. But they won’t. At least for me. I also asked the city, the county, the chamber of commerce, the restaurant association--no one really had a set list of all the operating businesses that closed down.... Finally I found that the state Economic Development Department has a list. Yes! Finally, right?! Buuuuuut…..they couldn’t give it to me…. because….the list? It’s actually owned by this private company called Data Axle. So….I gave them a call…. SOT Hey Claire how are you. Good how are you? So I got on Zoom with Chris Fruehwald, (FROO-wald). He’s the vice president of data operations at Data Axle. He explained how his company even got this data in the first place. SOT Gather from thousands of different sources, use a lot of automation, secretary of states, business publications, trade journals, domain registrations, So they are looking for signals across the internet that a business might be closed. And then they route those signals to a giant call center to check on them. SOT We use an automated dialer, check the health of phone line, take further steps to research is business really closed. BEAT FADE So yeah...they collect all this data, and then sell it. We opted not to buy the data, but Chris did give me some information. He said that in 2020, there were about 2,400 businesses in San Diego County that they have confirmed were closed. That sounds like a lot, but it’s actually down from previous non-pandemic years. That….was a surprise. But, Chris cautioned, that’s not a final number -- it will most likely increase as they confirm more businesses actually closed. SOT that number is closer 10,000 out of around 200,000 businesses in the entire county. Which accounts for about 5% Five percent….of all businesses...that’s a lot! Chris also gave me some stats on what kinds of businesses were closing in 2020--mostly restaurants, food carryout businesses, physicians and dentists. And he told me where businesses were more likely to close: for example, zip codes in National City and Oceanside lost half of their businesses since 2019. Meanwhile some North County zip codes, like one near San Clemente, actually increased businesses by more than 10%. After a quick break ---We’ll get back to Veronica, the owner of the massage therapy business -- MIDROLL 2 Claire: And we’re back. OK, so, Veronica made it through the summer, barely. SOT Then we got like a glimmer of hope around Thanksgiving. But she was still looking for ways to try to keep her business afloat. And one of the things many businesses were looking to were Paycheck Protection Program loans, or PPP loans. This money came from the federal government, through the Small Business Administration, but was administered by banks, And they aren’t actually loans -- they’re grants that don’t have to be paid back as long as the business meets certain criteria. So right away Veronica started looking into it. She called the local Small Business Administration office. SOT The way that it was explained to me was that if I did the PPP loan, I would have to pay my therapists for like a month or two months or something like that and they couldn’t get unemployment. This is true, but when Veronica’s business HAD to be closed --when stay at home orders meant she wasn’t operating at all-- her employees could get unemployment, and then when stay at home orders were lifted, she should have been able to get PPP funds to bring back staff or hire new employees. But Veronica didn’t know that. So instead, she applied for and got another loan, called an Economic Injury Disaster Loan, which she DOES have to repay. SOT So then I took the EIDL loan because, you know, I was like almost thirty thousand dollars behind in rent. So I did it and the money got eaten up by rent and Christmas alone. and then right after Christmas there were new stay at home orders due to surging COVID-19 cases, and so she was shut down...again. [34:08] And so now I'm like, yeah, this is like a lot of money. Is this like how much I make in a year and I owe that back to the government and I didn't even get the chance to use it for what it was for. Ok so….It sounds like Veronica may have gotten some bad advice, and this was a consistent problem during the pandemic. Especially for Minority-owned businesses, or businesses in lower-income areas, that don’t have good relationships with banks, They didn’t get as ready access to PPP loans, didn’t get advice from banks or financial experts, and so they missed out on these opportunities. BEAT In San Diego County, when you look at the share of businesses receiving loans, there is a stark divide between North and South county. And remember the data about businesses closing? That tracks with this divide as well. The success rate for applicants from Census tracts in low-income areas with large minority populations, mainly south county -- was 5% or less. But travel north to affluent, mostly white Census tracts in places like Carlsbad, Poway and Encinitas and the success rates are 96% or above. Lenders here gave just under 12% to businesses in majority-Latinx census tracts --- but in majority white census tracts, 61% of businesses received loans. Businesses like the one owned by Molly Boyd. So yeah we’ve been in the business 8 years now, yeah, through one pandemic. That’s wild. Molly owns Bryll Hair Lounge in Carlsbad. And...the beginning of the pandemic was a shock to her too--she, like hair stylists everywhere, had to close her salon. Her clients didn’t take it well. 00:07:24:17 “Everybody started panicking, not only healthwise, but just like, ‘I have to look good,’ I mean, we are in California. Between all those social platforms, people still have to look good.” Molly applied for a PPP loan from her usual bank and was put on a waiting list. But instead of just waiting, she used her network of other Carlsbad business owners. SOT “My other friends and people I know that own small businesses were getting funded all around me, and I said, ‘what are you doing, what’s the secret?’” Her friends told her about a bank that had no waiting list, and she quickly got funding. That bank, C3Bank in Encinitas, gave 84% of its loans to businesses in white majority Census tracts. But Molly doesn’t see inequity in the process. SOT “If you were a small business struggling during a pandemic, yeah that sucks big time, I feel for you. That’s not easy. but I also think...if you didn’t put in the time and the work and the extra that you needed to to stay afloat, then you’re just complaining. So...I have to admit, this was pretty wild for me to hear--someone who just doesn’t seem to be aware at all about her own privilege and the inequities other people in other parts of the county face. I even asked her pointedly about these inequities--for example, business owners who don’t have ready access to technology, don’t speak English as a first language or maybe don’t have good internet access. But Molly wasn’t having it. 00:28:59:22 “It’s hard to say, oh, you didn’t have internet, like it’s 2021, everybody has internet, and if you don’t have it, then you better get a new phone, or go to a place that has it...I think that’s a little unfair… BEAT/Transition So...back to Veronica... There’s no doubt that she put in the time and the work and the extra to stay afloat -- but she says HER network of business owners weren’t any help. SOT my friends and my colleagues, other business owners, hell, they're just as confused as I was. And it wasn’t just the PPP loans, Business owners who are people of color and run businesses in lower income neighborhoods just overall had a harder time getting resources, keeping customers--pretty much everything. A nationwide study found that since the onset of the pandemic Black and Latino business ownership dropped by 41% and 32%, respectively. Meanwhile, white business ownership dropped by just 17%. And this business-failure trend could have really long lasting impacts on neighborhoods. SOT “Businesses owned by minorities are more likely to have less resources, so any moment of crisis they’re less likely to survive. ” That’s Juan Pablo Pardo Guerra, an associate professor of sociology at UC San Diego. He says family businesses are a big source of generational wealth, particularly for immigrants and ethnic minorities.-- SOT “ they are better at spanning local networks, attracting customers on the basis of connections families have made and they don’t require massive capital investment. 00:06:44:18 Part of the advantages of small businesses is that they become assets, they can be passed on to other generations as assets. . He says if a business like a restaurant in City Heights, or the sporting goods store in North Park, or Veronica’s massage space, closes shop, there’s a bigger impact on the neighborhood. SOT “This can fundamentally reshape the way we experience the city. Because of the longstanding division in neighborhoods in San Diego, 00:13:42:18 neighborhoods with more businesses owned by Black and Hispanic people are more likely to fail, because of how the crisis is affecting them and that means less revenue generation in those neighborhoods, less services for people who live in those neighborhoods, less availability of local employment, worse educational outcomes, and worse career prospects.” BEAT But here’s an irony -- Veronica did see one small business surge over the summer--in part because she is a Black woman. This was right after George Floyd was murdered by Minneapolis police, there were massive protests across the county, a so-called racial reckoning, and a big push on social media to support Black owned businesses. I’ll just let Veronica tell one story about this experience... SOT 00:12:35.690 I had a client come in and she was so she was so excited to find... She was a white lady, and she came in here and she had like her earrings on with, like the Afro girl with the pick and, you know, and she was so like she was so excited and she was hugging me. And I was like, we're not supposed to be hugging right now. I'm like, here's my elbow, you know? And she just she loved it. She just kept saying, like, yes, queen. And, you know, she was so excited and and I loved having her, you know, because she just she's so she's so light and so awesome. But it was it was strange, too, because, you know, like, I know that if I was not Black, she probably would not have been here. But it's awesome. But this big push to “buy Black” faded out after a few months. Veronica got some new customers, but they didn’t last, and she’s lost a lot of money this year. SOT 10:53:46.807 “I'm a disabled veteran right now using my disability to try to pad my business, just so that I wasn't $20,000 in back rent. I had the hope of being able to open up again. I was dying a little every time I wrote that check because I was wondering if I was throwing this money away and I didn't even know if we would ever open again. It got to the point where maybe once or twice I had to dip into my kids’ college fund a little bit. I've got three daughters, and And I'm just like, OK, well, this has to stop because I can't bankrupt my family with no other answers.” Ambi from Queenstown Restaurant Now let’s visit another business, not too far away from Veronica’s Nola, where bankrupting the family doesn’t seem to be in the cards. It’s the middle of the day on a Tuesday, and Queenstown Public House on the outskirts of Little Italy is hopping. Groups of families with toddlers, girls in pretty sundresses,are seated outside in the dining areas set up on the street. Queenstown’s owner PJ Lamount said the constant changes during the pandemic made things really difficult. And there were times when he thought he might have to permanently close one of the five restaurants he owns, but now, not so much. SOT [07:07] Since people were allowed to sit down and dine again, it's almost been like summer every single week. It doesn’t matter which restaurant it is, it just seems like people have been so, you know, stuck inside their cage for so long that everyone wants to be out. And now that its acceptable to go out...People are continuing to stay out. And it's a good vibe. BEAT This good vibe -- This sort of boom time -- is being felt in a lot of businesses...that’s according to.the UC San Diego sociology professor Juan Pablo Pardo Guerra. SOT Because also many households got funds from the government, those that did not need the funds, thouse who stayed employed throughout the pandemic, now have additional dollars, we are seeing a heating up of the economy in certain areas. People have compared it to the roaring 20s after World War I and of course after the 1918 flu pandemic. But he says it’s important to remember that not everyone is feeling this roar in the same way. SOT Its something we have to be mindful of because in those moments of growth, growth also tends to something that is not necessarily equalized. Businesses that are left out are in a worse position and catching up is much more complicated because they have to compete with businesses that are now perhaps in a relatively better footing BEAT Veronica was hoping to catch up, hoping for a big surge in customers as restrictions were lifted and people got vaccinated. But it hasn’t happened as much as she’d like. SOT 00:27:40.680 I'm still getting the clients that are like, do I need to wear an F-ing mask? Yes. Licensing still says you have to wear a mask, so yes. Well, I'll just frickin call back in a month, OK? She’s also having trouble bringing back staff, and struggling with childcare, like many others. SOT 00:16:17.200 I had a client call because they were wanting to know if we had a therapist that could be available to do massages for their evening group. I wasn’t working, I was done for the day, and I couldn’t take the call. But her three daughters, ages 5 to 12, weren’t back in San Diego public schools, full time. So she needed to spend more time at home, and that hurt her business. BEAT So….I’ve talked to Veronica repeatedly during the past year, and the last time I saw her She was vaccinated just like me and lots of people these days…. But...while there seems to be this lightness around some vaccinated people….where they’re reemerging….doing things they love again and feeling hopeful. Veronica seemed more down than I’ve ever seen her. And more fearful about her business. BEAT SOT 00:51:27.550 I'm so tired of crying about my business, like this was never supposed to be something to cry about because, like, the truth is, is that I. I'm living my dream like, you know, I'm doing something that I love, I'm really, really, really helping people just talk to my clients. And I'm making a positive change, I, I can be there for my kids like I'm doing everything right and it's just like nobody plans for a global pandemic. BEAT That is certainly true... But, as we’ve seen, some businesses WERE able to keep their heads above water, and come out of this pandemic with, well… a good vibe. Especially those in the right place -- with the right connections. And for now, Veronica is really trying to hold on to her business. For herself, to keep this thing going that she worked so hard to start. And for her clients, who rely on her for stress and pain management, and who feel more comfortable visiting a Black-owned massage business. And for her daughters--if she can keep the business going, it will be an investment in their futures as well. When I last talked to Veronica, she was sitting in front of a giant banner that hangs on the wall in her office. It’s message is not really safe for radio--the public radio translation would be something like…”Don't Mess with a fricking powerful woman” And that’s Veronica’s mantra, that she’s not going to give up, BEAT FADE This KPBS Investigates episode was reported and written by me, Claire Trageser. Emily Jankowski is the director of sound design. Kinsee Morlan is Podcast Coordinator. Alisa Barba is our editor. Lisa Morissette is operations manager and John Decker is the interim associate general manager of content. Stay tuned for another episode of KPBS Investigates soon -- this time about asylum seekers at the Mexican border -- and those finally done waiting… “People are now saying, the tent next to me is leaving because they’re crossing over to the United States finally. And that brought hope to people in the encampment, which also made people a lot more desperate to have their cases heard first.” That’s next time on KPBS Investigates.

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The KPBS Investigates podcast is where our news team is able to dive more deeply into the stories we cover. Today, investigative reporter Claire Trageser brings us the story of one woman and her struggle to keep her massage business afloat during the past turbulent year. Her story is emblematic of what has happened to many small businesses all across San Diego county because of the economic fallout of the pandemic. This episode explores the difficulties San Diego businesses faced accessing the loans and resources aimed at helping them survive the brutal cycles of shutdowns and reopenings. Many businesses were forced to close but, it turns out, some parts of the county fared far better than others.