Can downtown Lancaster recover from its COVID-19 coma? | Local Business

The prime location of Carr’s restaurant in downtown Lancaster always made competitor Dean Oberholtzer, owner of the Belvedere restaurant and bar four blocks away, a little envious.

So when he got the opportunity in May 2019 to purchase Carr’s, in the Hager building opposite Lancaster Central Market, he jumped at the chance.

“We did it specifically because of the Fulton (Theatre), the Ware Center and the Trust (Performing Arts Center) being within a half a block from here and the convention center a block away. It was a perfect place,” Oberholtzer said.

He and two partners converted Carr’s downstairs dining room into Josephine’s Downtown, which debuted in September, and its street-level dining area into C’est La Vie, which opened in December.

“We were really happy with our business in the first seven months. Our numbers were better than we ever anticipated,” said Oberholtzer. “Then, all of a sudden, this happened.”

“This” is the outbreak of COVID-19, which led Gov. Tom Wolf in mid-March to order the closure of non-essential businesses. The sweeping shutdown included the Fulton, Ware Center, Trust building and convention center, as well as Oberholtzer’s three restaurants.

Only recently did Wolf loosen restaurant restrictions enough for C’est La Vie to partially reopen on June 10. But Josephine’s and the Belvedere remain closed, the theaters still are dark and the convention center nearly so.

“For most of us out here, it’s just a matter of trying to figure out a business model that you can currently work with that helps you to survive …, so that when things start to get back to normal, you’re still in business,” said Oberholtzer.

Friends who have downtown restaurants have told him that they might not get through this, he said.

Like many others, they wonder if downtown Lancaster can rebound from the COVID-19 pandemic.

Interviews with downtown Lancaster developers, civic leaders, business owners and managers reveal a consensus. Once effective treatments or vaccines are in place, center city’s vitality and foot traffic will return, they say.

What remains uncertain is just how many of the current restaurants, bars, shops and nightclubs will weather the pandemic. Many factors feed into that calculus. Much depends on how residents of the region respond by doing things like adhering to public health guidelines to limit the spread of the coronavirus and choosing to support downtown businesses.

What’s at stake

Downtown’s revival, which has unfolded over the past dozen years, and its ongoing vitality have been built on its ability to attract big numbers of visitors.

The revival has made downtown Lancaster a nationally acclaimed model for small city renewal.

Business executives and public officials have invested or committed more than $400 million of private and public funds in new, redeveloped or expanded downtown facilities, on the assumption that heavy usage would justify those investments.

That tab goes beyond convention space, entertainment venues, hotels and restaurants.

Business and government leaders also brought or kept hundreds of employees downtown, often at least in part because employees enjoy working in a hub of commerce and culture. Those same assets make downtown an appealing place to live, too, prompting developers to create scores of condos and apartments over those same dozen years.

Pandemic or not, developers believe people still want to live, shop and work downtown. Five more apartment projects, totaling nearly 600 units, in downtown or on the edge of downtown now are on the drawing board. So is a major office project and a food hall, with co-working and art/maker spaces. All are banking on center-city bouncing back.

Depth of the downturn

How far has downtown visitation fallen?

There’s no precise, real-time measurement for downtown activity. But there is one indicator – the number of vehicles parking in the surface lots in the first blocks of North Prince and West King streets.

These lots, with a combined 200 spaces, are heavily used by people headed to Lancaster Central Market, the Fulton, Ware Center, Trust Performing Arts Center, business meetings, and downtown bars and restaurants.

Tracking the monthly number of vehicles parked in those lots is somewhat encouraging, in a dark way. The volume in April – the month after the pandemic hit and business closures were widespread – was zero, as their owner, businessman Doug Shand, closed the lots too.

That figure has gradually improved, last month reaching 49% of July 2019’s volume, although with an asterisk. The typical length of stay is shorter, Shand concluded, since the drop in revenue is steeper than the drop in the number of vehicles parked.

“We have a lot of market traffic, but people are not staying to browse the downtown as we have been used to,” Shand said.

Another way to estimate the impact of COVID-19 on downtown Lancaster comes from a little arithmetic.

Normally, events in the convention center’s biggest space, Freedom Hall, draw 200,000 visitors a year; the Fulton, 186,000 a year; the Ware Center, 60,000 to 70,000 a year; and the Trust, 10,000 a year. If they all stay dark for a year, it would mean nearly 500,000 fewer downtown visitors.

And those four dark spaces reduce the spending downtown by tens of millions of dollars.

For instance, a 2018 study found that visitors to the convention center who stay overnight spend another $40.60 per day in stores and restaurants and on entertainment.

Another study, done for the Fulton, calculated its economic impact on downtown last season was about $15 million. (The figure excludes what its own customers spend on Fulton tickets and refreshments.)

Marc Robin, executive artistic producer of the Fulton Theatre, is mindful of the damage that a dark theater can do to other downtown businesses.

“Even though we’re closed, I’m begging people to still come downtown. Make it a special event, a date night. We have to do whatever we can to motivate people to still go to the other places they would have gone to (when attending a Fulton show),” said Robin.

Oberholtzer said the ripple effect of the Fulton’s shutdown is real.

“The Fulton is such an asset to Lancaster city, and especially to the restaurant and hospitality industry. Until they open their doors, I think we’re all going to suffer from them needing to close,” said Oberholtzer, who is on the Fulton board of directors.

Making matters worse for center-city restaurants and stores is that downtown offices have far fewer workers than usual as employers follow state mandates to use remote work as much as possible. That has slashed the number of potential customers for stores and restaurants by the hundreds.

For instance, Fulton Financial and its Fulton Bank say a mere 20% of their roughly 900 downtown employees have returned to their center-city offices, a spokeswoman said. At Cargas Systems, just 15 of its 140 employees have come back to their downtown desks, said Nate Scott, president and CEO.

County government has about 1,400 employees downtown during normal times; now, 40% to 70% are back at their center-city desks, depending on the day and the decisions of department managers, said County Commissioner Josh Parsons.

Key factors in outcome

The chance of COVID-19 cases flaring up, and Wolf responding by downgrading the county’s status from green, would obviously be bad news for downtown.

In that respect, area residents’ adherence to public safety mandates is crucial for downtown businesses.

“The viability of our downtown and the vitality of our downtown are directly connected to the community spread of COVID …,” said Lancaster Mayor Danene Sorace. “Honestly, if we care about our businesses, we are going to pay attention and adhere to the public health guidance that we by now, all of us, every single person, knows.”

“As the economy reopens, hopefully we won’t see a round two …,” said Marshall Snively, president of the Lancaster City Alliance, a nonprofit that works to keep the city safe, clean and vibrant.

“That’s the importance of people doing the right thing and responding safely so we don’t have another major outbreak,” he said. “What we don’t want, for small businesses especially, is to have to have a complete shutdown again, because then it could be a different story.”

Alicia Byler, co-owner of Telltale Dress, 334 N. Queen St., points to another factor that relies on residents’ choices.

“This crisis is not simply going to disappear in the next month or so,” she said. “We will feel lingering effects for at least another year or two. For us as retailers, it means getting extremely creative and figuring out how to ride the waves of uncertainty. For us as consumers, we must make it a priority to shop and eat locally, or many small businesses won’t survive.”

While it remains to be seen if the community rises to those challenges, programs aiding businesses have been a bright spot.

Many businesses have sought and received government loans and grants, taking advantage of programs to help them stay afloat.

Relief went to three of the biggest downtown destinations, as LNP | LancasterOnline previously reported, all of them struggling because COVID-19 has decimated their revenue.

The Lancaster County Commissioners approved a $2.9 million grant 2 ½ weeks ago to the convention center authority to prevent the authority from defaulting on its bond payments – which would have forced the county to assume that obligation.

Wednesday, the Lancaster City Revitalization & Improvement Zone Authority agreed to help the Lancaster Marriott at Penn Square and the downtown Holiday Inn make debt-service payments this year. The authority agreed to provide $428,000 and $464,000 respectively, if it has the money available later this year.

Dozens of small downtown businesses are getting a hand too, primarily from the city Small Business Emergency Fund, the state Small Business Assistance Program and the county-supported Small Business Recovery & Sustainability Fund, part of a plan devised by the Lancaster Chamber and the Economic Development Company of Lancaster County.

The programs are having a substantial impact. Though the state program’s recipients have yet to be selected, the city program has awarded grants totaling $151,000 to 65 downtown businesses and loans totaling $316,000 to 14 downtown businesses.

Round one of the countywide Lancaster Chamber/EDC assistance effort, for small businesses having 20 or fewer employees, included $1.18 million in grants to 48 downtown businesses.

Sunny outlook, cloudy present

Josh Nowak, director of sales and marketing for the downtown Marriott and convention center, is trying to reschedule canceled 2020 events after what appeared to be a banner year imploded. He’s been able to reset 40% of them so far.

For now, the facility is hosting small gatherings while seeing an uptick in leisure travel and restaurant business, enough to bring back about 20% of its 350 employees, though for fewer hours than before.

The pandemic comes a year after the completion of a $40 million expansion of the Marriott added 110 rooms, bringing it to 416 – the most of any hotel in the county. Nowak declined to disclose its occupancy rate.

“I’m optimistic that, over time, we will be back to being a premier meeting, conference and convention destination. But it will be gradual,” he said. “We will continue to try to attract more leisure guests and do it in the safest and healthiest environment.”

John Meeder, developer of the downtown Holiday Inn, which completed a $16 million renovation a year ago, said that by aggressively pursuing group business, the hotel has been 25% occupied. But groups book at a discount, so revenue is just 15% to 18% of what was expected.

Consequently, he has just 35 employees, compared to the 100 he’d normally have. His goal is to survive the current crisis, then see the 215-room property at North Queen and East Chestnut streets thrive long-term.

“We were looking forward to a wonderful year this year. Well, the wonderful year just got put on hold. We know how to slug it out and that’s what we’re doing …,” Meeder said. “You have to accept where you are and know you can get some of it back. I can see the day when this place is going to be rocking. We just have to work our way through it.”

At the Fulton, which has postponed its 2020-21 season until the spring, and laid off all 44 employees, Robin is confident that large audiences will return.

“I think that the second that people feel that it’s safe to do that, I think they’re going to leap into it, not necessarily with reckless abandon, but I do think they will leap into it,” he said.

“I think people will come out as soon as they think it’s safe to do. It’s like the Munchkins in ‘The Wizard of Oz.’ As soon as (Dorothy’s house landed on the Wicked Witch of the East and) they knew she’s not a threat, they came out of their homes in thousands. If there is a vaccine and a viable treatment, I think people will come back rather quickly,” Robin said.

Millersville University’s Ware Center, though, is taking a different tack.

It intends to go forward with a limited schedule of performances starting Aug. 28 with a concert by Xun Pan of Beethoven sonatas to mark the composer’s 250th birthday, said Robin Zaremski, director of Millersville’s visual and performing arts centers.

“We are not giving up,” she said. “We feel it’s our mission to remain open, to remain a community gathering place, and be able to still present arts that are culturally relevant so the community does not lose connection with the beauty of the arts. We can do it.”

It will host 35 events in the 2020-21 season, not the 285 events it would host in a typical year, in part because many national and regional acts canceled tours due to COVID-19.

The events will be presented to smaller audiences, however. Social distancing will reduce the seating in Steinman Hall from 350 to 120, in the salon from 100 to 40, and in the atrium from 204 to 100.

In addition, the annual Arts Smarts camp for youngsters, normally held in the summer, will be held on Saturdays in the fall.

Because the Ware Center’s schedule suddenly has so many open dates, it’s introducing a new series dubbed “Live & Local” to fill some of them with local performers. Interested performers can contact Zaremski after Sept. 1 at 717-871-7018 or

“We want to still make sure we can host events and keep people engaged, even if it’s on a smaller scale,” she said.

Another business leader taking a long-term view of downtown is John Swanson, CEO of Willow Valley Living, which plans to help turn Southern Market Center into a food hall and other uses and build 150 apartments across the street for seniors.

Willow Valley plans to start the year-long redevelopment of Southern Market this quarter. It expects to unveil its development plan for the apartment building and begin the city review process by the end of the year.

Swanson said he’s “still bullish on downtown,” noting that he’s comfortable with proceeding cautiously on the projects until COVID-19 is brought under control.

“I feel like we have to aggressively fight the pandemic in order to have a sustained economic recovery,” he said.

Swanson said residential projects like Willow Valley’s will give downtown’s small businesses a larger permanent customer base, making them better able to withstand slumps in the number of downtown visitors and workers, whatever might cause it.

Still appealing

Another positive indicator, Snively noted, is that downtown properties are still drawing interest from retailers, restaurateurs and developers. Even with the pandemic, he said, nine stores and restaurants have opened downtown since March, offsetting the eight that closed.

Faith Smith, who a year ago helped open now-closed Lancaster Cheesesteak Co., said she still believes in the long-term potential of Lancaster city, even though she expects more restaurants will be forced to close.

“Lancaster is not going anywhere but up. Even after all the dust settles and the businesses clear out that are done, you’ll have more come in,” said Smith, whose former business partner plans to reopen a steak shop at the 43 W. King St. location.

While she says “COVID killed the business,” problems with homeless people congregating in the restaurant were another factor that made it hard, she said.

George Soukas began working at The Village Nightclub the year after it moved to 205 N. Christian St. in 1971. Now the club’s manager, Soukas said his years in the business taught him that people always want to go out, no matter what. And Soukas thinks the crowds will return this time too, once it is safe.

“I think people are just going to step back into whatever they were doing before. I honestly do,” he said. “No question they’ll be back. None.”

Bill Speakman, music and events manager at Tellus360, a popular East King Street nightspot, said he’s generally optimistic about the long-term, as long as Tellus360 can weather the short-term.

Echoing Meeder, Speakman said, “So our best-case scenario is survival, so that we can get back to where we can really thrive.”

While he’s hopeful about the return of the night crowds, the possibility that office workers might be slow to return downtown has Tellus delaying its plans to open for lunch.

“We’re keeping an eye on what’s happening with the numbers of people downtown. And it seems like that will be a relatively slow return,” he said.

Tom Allen, who opened Lancaster Downtown Deli last November at 45 N. Market St., was among many downtown businessmen to voice optimism that the “semi-desolate” present will be followed by a brighter future. 

“Downtown is not going to die,” he said. “It’s going to come back.” 

Staff Writer Chad Umble contributed to this story.

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