Prince George’s County economic development officials are pressing for massive injections of capital and government aid after the local economy has been thrown into a crisis by the coronavirus pandemic. Without government relief, the now-looming expected recession threatens the capital of thousands of business owners and the livelihoods of many thousand more workers, according to local economic development officials.
Major employers have had to shut doors due to social gathering restrictions and send scores of workers to the unemployment lines. The combination of social distancing and income insecurity for the working class has devastated the customer base even for businesses still-allowed to operate.
The impact on small business-owners, particularly retailers, restaurateurs and artists, is expected to be severe and rapid in Prince George’s County, according to several contacted for this article.
“It is less likely they have the finances to carry themselves for an extensive period of time with limited operating capital,” said Jim Chandler, assistant city administrator and director of economic and community development for the city of Hyattsville.
Stuart Eisenberg, president of the Hyattsville Community Development Corporation, said these businesses are now relying on the strength of their social networks to survive.
“I think we’re only just starting to see what the chronic, daily version of social distancing is doing to our community businesses,” said Eisenberg. “This could last a longer period than we can easily cope without some good community planning.”
Brooke Kidd, president of the Mount Rainier Business Association and executive director of Joe’s Movement Emporium said arts businesses in the Gateway Arts District are particularly vulnerable.
“While a lot of us are trying online content, it won’t generate a lot of revenue,” said Kidd. “This has been a very hard and depressing situation for our business community.”
Real estate impacts
The impact on real estate may take longer to develop. David Iannucci, president and CEO of the Prince George’s County Economic Development Corporation, noted the construction sector “is largely continuing” to work, the industry declared “essential” by Gov. Larry Hogan’s recent executive orders.
There has been one troubling early sign for Prince George’s County: the developers behind the Largo Town Center mixed-use project – fancifully dubbed “downtown Prince George’s County” by local business boosters – announced March 23, 2020 they were pausing “vertical construction” due to global “macroeconomic conditions.”
Chandler said March 23, 2020, he has not yet heard of any developers modifying their plans for the city. Likewise, College Park City-University Partnership President Eric Olson said he has not yet heard of developers in his city altering their plans. Both College Park and Hyattsville have several large mixed-use projects in the development pipeline that have not yet broken ground or begun “vertical construction.”
“Those firms managing development projects tend to have capital reserves necessary to carry costs through what can be a lengthy, entitlement process before they construct and tenant a project,” said Chandler. “As long as this pandemic does not extend too long into the future, I do not anticipate that this will determine the fate of any one project, but it is likely to slightly alter the delivery schedule.”
Still, many commercial real estate projects are financed in two stages, once to assemble land, and a second time when the project is ready for design and build. Further, during the Great Recession, Prince George’s County saw several projects cancelled or delayed after development had already begun. Greenbelt Station is a prime example – it was significantly delayed after construction had already begun when the economy soured in 2008. At the end of the day, any project that hasn’t yet secured the capital to finance construction could potentially be a victim of an economic recession.
“This is devastating our business community,” said Jimmy Tarlau, a Mount Rainier resident and the outreach and policy coordinator for the Mount Rainier Business Assocation. “I have never seen anything like this and it could take not just weeks but months before business picks up again. Businesses are going to need massive aid in order to open up their doors.”
In confusing early stages of the pandemic shutdown, Tarlau said business owners have had a hard time learning what assistance may be available.
“There is not a lot of information out there,” said Tarlau.
Eric Olson, director of the College Park City-University Partnership, said he hoped more information about economic relief would be available once Congressional leaders agree on an emergency stimulus package. Until then, he said, the shape of future assistance will be murky.
“Clearly we are in the early stages of whatever this is going to be.” said Olson. “Congress is working on the stimumulus package right now. Things are going to flow from that and it’s going to take a little bit of time.”
Long-term, the Prince George’s business and political communities will need federal investment
“We need the federal government to step up dramatically to provide capital to our companies so they can continue to pay their employees and maintain operations in order to re-open when the situation allows,” said iannucci. “Hopefully those dollars come to the local level soon.”
An ad-hoc, and still rapidly-developing array government aid programs and nonprofit assistance is still emerging to address businesses impacted by the pandemic in Prince George’s County. The Maryland Department of Commerce has launched several low-interest loan and grant programs for affected businesses, while the Prince George’s County Economic Development Corporation has a comprehensive, countywide list of restaurant carryout and delivery services.
Tuesday, Hyattsville officials compiled the following list of business assistance programs:
U.S. Small Business Administration (SBA) Disaster Recovery Loans
Organizations financially impacted since January 21, 2020, may qualify for up to $2 million loans. Application and more information available here.
Maryland Small Business COVID-19 Emergency Relief $75 Million Dollar Loan Fund
Offers no interest or principal payments due for the first 12 months, then converts to a 36-month term loan with 2 percent interest payments. Learn more.
Maryland Small Business COVID-19 Emergency Relief $50 Million Dollar Grant Fund
Grant program for businesses and non-profits that offers grant amounts up to $10,000. Learn more.
Maryland COVID-19 Emergency Relief $5 Million Dollar Manufacturing Fund
To help Maryland manufacturers produce personal protective equipment needed by hospitals and health-care workers. More details are expected to be announced by Friday, March 27, 2020.
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