COVID-19 Closures Costing Fresno Economy Millions. How Do We Get Off State Watch List?

While essential businesses in Fresno County continue to operate during the COVID-19 pandemic, those affected by statewide closures or the county’s placement on the state’s watch list are fighting for survival. Some have lost the battle and permanently closed their doors.

The precise loss to the Fresno economy is incalculable at this point, but a look at the dollars generated annually by businesses such as salons and barbershops, gyms, movie theaters, and sports teams indicates it’s substantial.

And that begs the question: What gains in coronavirus containment must Fresno County (and others) achieve to get off the watch list?

Related Story: Newsom Nears Pivotal Decision: Should California Try to Reopen Again?

Watch List Adds to Business Restrictions

Doing so would loosen restrictions on some businesses that are currently limited to outdoor operations only, including personal care services, fitness centers, and shopping malls. Houses of worship would also be able to resume indoor services and offices for “non-critical infrastructure sectors” could reopen.

But exiting the state’s monitoring list won’t result in a complete reopening of the local economy. Statewide restrictions would still prevent restaurants from offering dine-in service. Bars, pubs and breweries could still only be open only if they offer sit down, outdoor dining and sell alcohol in combination with a meal. Indoor entertainment facilities, museums and cardrooms must remain closed.

“It would be difficult to put our finger on the value of how much dollars are lost as a result of the watch list per se,” said Will Oliver, vice president of business services for the Fresno County Economic Development Corporation.

“But, absolutely, I think that we will see tremendous losses, millions of dollars for the losses.”

Arts and Entertainment Generates $252 Million a Year in Fresno County

The industry most visibly affected by the closures is arts and entertainment, which Fresno EDC said, accounts for $252 million in gross domestic product yearly in Fresno County.

Softening the blow was the reopening of Table Mountain Casino, as the county’s casino sector contributes $47 million a year to the economy. But gyms and recreation centers generate $33 million and sports teams check in at $24 million.

Movie theaters, which surprisingly aren’t counted as arts and entertainment, are categorized by themselves. They produce $15 million in yearly GDP.

Salons and Barbershops Contribute $160 Million to Fresno Economy

Another highly visible closure involves personal care services, which do $160 million a year in the county. Here’s the breakdown of the top producers: beauty salons ($86 million), nail salons ($31 million), and barbershops ($15 million).

Fresno County has been on the state’s monitoring list since early June. The metrics for getting off that list have shifted somewhat over time. For example, the number of consecutive days without a death is no longer a factor. But other metrics are preventing the county from opening up not only the businesses mentioned above, but schools as well.

Barbershops are limited to outdoor operations in counties on the state’s coronavirus watch list. (GV Wire/Jim Jakobs)

Business Relief Programs

The federal Paycheck Protection Program and Economic Injury Disaster Relief Loan programs helped some local businesses and their employees. But the number of companies lacking access to an SBA-approved PPP lender kept many out of reach from benefiting from the program initially.

It’s believed that 31% of Fresno County businesses received PPP loans. Through July 6, according to the SBA, 10,490 loans had been approved in the county.

Oliver’s biggest concern is the overall drop in GDP at the national level. He says the latest reporting showed an annualized drop of 32%.

“If Fresno were to follow that trend in terms of that reduction of GDP over the same time period, you’re looking at billions of dollars worth of economic activity that’s wiped out,” Oliver said.

In an effort to help, the EOC has created a website, called “ReviveFresnoCounty.com” as a one-stop for businesses. It gives protocols and guidelines in terms of what is being expected of them to remain operational.

Cost to Individual Counties on the Monitoring List

There are no hard and fast numbers that tell the story of how much the economy is suffering because of state-ordered shutdowns. But one well-known economist says the state’s current restrictions, while widespread across the state, affect only a small percentage of the overall economy.

“I’m not telling you the mandates aren’t something. They are something,” Christopher Thornberg, founding partner of Beacon Economics in Los Angeles, told GV Wire℠.

Thornberg says even though shut-down movie theaters, indoor restaurants, and houses of worship are highly visible, they aren’t large drivers of the overall economy.

He pointed out that business sectors that generate the most economic activity remain in operation.

“It’s office jobs, the healthcare sector, it’s light manufacturing there in Fresno. Obviously ag and food processing go right along with it,” said Thornberg. He says these sectors, along with transportation logistics, are all doing well after bouncing back since the early days of the pandemic.

And, he said that it was a huge decline in direct consumer spending that initially triggered the economic downturn.

How Does Fresno County Get Off the List?

The state has established a list of factors that determine how a county gets off the watch list.

But, Fresno county interim health director Dr. Rais Vohra says the pathway is pretty straightforward.

(Fresno County Public Health)

He says more people need to really think about wearing a mask to avoid passing COVID on to relatives and other elders who are fragile. For employers, it means looking around to see what can be done better to keep employees safe from infection.

To that end, the county has begun an ad campaign to educate the public about the importance of wearing masks and social distancing. The ads are on social media, the sides of Fresno FAX buses, and radio and television.

Metrics Have Changed Over Time

One of the original metrics for removal from the state’s list that caused considerable consternation is no longer an issue.

“There was a 14-days-without-a-death criteria and (the state) shifted from that,” said Fresno County Health Director David Pomaville.

Why?

Because the state recognized that a death in the community may not be directly related to how well the community is doing as a whole, Pomaville said.

The California Department of Public Health tells GV Wire℠ in an email: “Counties need to be meeting threshold (above or below what is set for each metric) for all metrics, for three consecutive days before a county is removed.”

At present, Fresno County is meeting one of the three measurements the state utilizes for gauging coronavirus containment. The metrics include transmission rate and hospitalizations along with ICU capacity and ventilator availability.

The county’s average three-day increase in hospitalized COVID-19 patients is under the state’s 10% maximum threshold and ventilator availability is well above the standard. But the county is currently missing the mark on its testing positivity rate (about 10% vs. the state’s target of less than 8%) and ICU capacity (6% vs. the state’s mandate of 25%).

Getting over the finish line will require an even greater effort going forward to reduce the transmission of the virus.

“It’s up to all of us to get off the monitoring list,” Vohra said. “I know that that’s a little inconvenient for some people.”