Chicago businesses adapt to ‘very slow’ recovery from COVID, 3 years after shutdown

Even on a bright day in the middle of the week, downtown Chicago can’t shake the darkness.

Prime corners in many places are empty, and surviving restaurants, if wise, have declared open on their windows and sidewalk signs. Now, like Sunday three years ago, every day can seem like a sleepy Sunday.

Businesses are in their own ‘long COVID’ battle. Some have changed their hours of operation and how they compete. But few are sure about the rhythm of city life on which they depended. The pandemic, while receding as a threat to health, is having lasting effects on where people want to work—and consume.

For Atlas Stationers, a family business founded in 1939 in the Loop, a new way of thinking had to come quickly. When the shutdown occurred in March 2020 (three years ago this week), businesses that serviced fully-placed offices around them found zero revenue overnight. So President Don Schmidt, with his sons Brian and Brendan’s pick-up lines, set a plan in motion.

The store is still located at 227 W. Lake St., but visitors who haven’t been there for a while will do a double take. Stacked to the ceiling with accordion files, it shines like a jewelry store, but not for showing off rings and watches. Fancy fountain pens and stationery are on display.

They are at the core of Atlas’ new business, 75% of which consists of online orders sent across the U.S. The store’s active social media presence is picking up as people with more time at home take An emerging hobby that fostered interest in old-fashioned pen-and-paper writing, Schmitz said.

Don Schmidt said it took Atlas a year to reach pre-pandemic earnings. It now has three times as many businesses as him, adding five of his staff in the last few weeks, bringing the total number of employees to his 16.

The store itself has been redesigned, placing fewer items on lower shelves with more attractive displays to cater to tourists and walk-ins who have discovered its niche online.

“Saturday turned out to be our busiest day,” Schmidt said.

He said its online presence makes even first-time visitors feel like they know the place. Schmidt believes a welcoming spirit and a few in-store events will help retailers survive. Atlas has a table in the middle of precious floor space where people can try out pens and his more than 600 ink colors from several stores, and Schmidt said people love it.

He was able to track the revival of downtown and how it differs from other areas. says Mr. “But the loop itself is good. It was empty, but now it’s stable.”

Like other merchants, Schmidt believes the old habit of working five days in an office is gone. “Monday, Friday I think [office visits] It may be questionable in the near future,” he said.

Similarly, Mike Flanagan, chief growth officer of Chicago-based Arch Amenities Group, sees opportunity from the pandemic, but knows the risks abound. His company, a private equity backed company, has picked up weaker competitors in the business of workout rooms, lounges, coffee bars and other services for office landlords and hotels. There is even a bowling alley and a virtual golf simulator for him.

We have over 400 locations nationwide, including 52 in Chicago and 10 in the suburbs. Flanagan said downtown Chicago’s recovery is ahead of San Francisco, Portland, and Seattle. But while office owners are thinking about how they can make their buildings more enjoyable and keep people coming back, some find it difficult to tackle the costly tasks.

“The decision-making process, which used to take four to eight months, is now two years. As a result, Arch has laid off several employees.

Tyler Pasiak Larivière/Suntime

Flanagan said the amenity improvements could cost the building $25 million to $30 million. In many cases, an office building owner faces hefty costs whether to convert his first-floor space, which normally demands high rents, into amenities for tenants, he said.

Weekly data from Kastle SystemsIt tracks people entering and leaving buildings with security equipment. That rate has increased slightly in recent months, and is what Chicago Loop Alliance head Michael Edwards called “agonizingly slow.” It shows recovery.

A key component of downtown living, hotels are performing well and expect more bookings as convention business picks up throughout the year. Tourism is also expected to improve this summer, with average hotel room rates gradually rising, according to data from research firm STR, provided by the Illinois Hotel & Lodging Association.

But things may not return to pre-pandemic normalcy for at least another two years, said the association’s president and CEO, Michael Jacobson.

Broader measures of the economy show its resilience and the stabilizing effect of federal aid. It also shows that work is work, even when working from home.of the state government Number of private sector jobs found annually Until March 2022, total employment numbers in downtown Chicago remained largely unchanged since 2019, the last year before the pandemic.

Overall, data shows that Chicago is slightly below its pre-pandemic record of 1.2 million private sector jobs in 2019.

Other research Worker-Sponsored Illinois Economic Policy Institute Most of the post-pandemic gains were in high-paying jobs that could be done remotely in areas such as administration and financial services, according to a study covering job changes to 2021. All jobs were related to being on the ground, including administrative support roles and restaurants and similar food service.

Meanwhile, while some business leaders are calling for a return to office work, at least part-time, many staff are resisting and opting for sofas over workstations. It may not matter if the office has free pizza. Preferring remote work can also be a plus for suburban office buildings. Brokers report increased rental activity by businesses that cut commute times to entice workers.

Atlas Stationers’ Schmidt said the return of downtown workers could depend on crime concerns. He said during the uproar after George Floyd was murdered by police, his shop windows were smashed, but nothing was taken. Survey by WBEZ We found that passengers cite crime, unreliable service, and filth as reasons they don’t use CTAs often.

“We need crime and taxes to revive downtown,” said Arch Amenities’ Flanagan.

Both Schmidt and Flanagan support city-led efforts to bring more housing downtown, such as programs that provide incentives to developers to improve the LaSalle Street corridor. You can adopt the fashionable office layout on the market, but it will require costly renovations. But nothing in their view. Just realism.

“I don’t think the city has an alternative,” Schmidt said.