Courtenay D. Mercer, PP, AICP
Executive Director, Downtown New Jersey

Rachael Thompson Panik
Associate Planner, Mercer Planning Associates

May 8, 2020

Downtown New Jersey provided a series of virtual opportunities for downtown managers, economic development professionals, and public officials to exchange ideas about best practices related to downtown economic development in light of the COVID-19 crisis.

In preparation for discussions with members of the NJ Legislature and Governor Murphy’s administration, Downtown New Jersey hosted an open dialogue with members to discuss concerns, ideas, and needs for reopening safely in wake of the COVID-19 pandemic. Below are highlights of the discussion, which will be summarized in a white paper to be shared with state officials.

Reopening Task Forces and Round Tables

Downtown Cranford created a task force to discuss issues related to reopening. The task force includes the BID, township officials, and representatives from different business types. This initiative creates an intentional space to think about and implement support for gamut of issues that local businesses are facing now. The reopening protocols are largely dependent on the recommendations that come from the state. They hope the protocols will be comprehensive, yet easily understandable.

While they are waiting on comprehensive protocols, Cranford is being proactive in other ways. They have created a slogan and corresponding marketing materials and newsletters to share with the downtown that reminds their community that they are stronger together even though they are socially distant. They are also planning to create “flex spaces” in the public realm for people to enjoy downtown while still having enough room to be safe from spreading potential illnesses. The ultimate goal is to create a document and presentation to share with town leadership and the community to instill confidence that businesses open up safely.

Similarly, the tourist town of Lambertville, is hosting round tables for businesses and residents to gather facts and hear concerns from the business community. The goal is to identify areas where the municipality can add stronger rules to build consumer confidence in beginning to patronize businesses again. Much of recovery is contingent upon how safe people feel spending time in downtowns. With both round tables, they are discussing possibilities to increase the capacity of downtown, such as removing on-street parking to increase sidewalk width, making sidewalks one directional, etc.

Increased Capacity in Downtown

Several participants shared ideas and concerns about ways to increase capacity in downtowns, i.e. create more space for customers to social distance. Towns are considering closing roadways in order to make more room for people to walk and bike in and around downtown while still maintaining a safe distance from others. Before closing roads, downtowns should consider how such closures may create potential disruptions in delivery and curbside pick-up, which are crucial to successful reopening. In addition, some roads in downtowns may not be owned by the municipality, but instead may be owned by the county or the state, creating additional logistical hurdles for closing streets to vehicular travel.

There are additional challenges with businesses expanding their areas of service into the sidewalks. In cases where restaurants may be able to expand outside of their building space onto sidewalks or into streets or parking lots, the State ABC must provide more flexibility with regard to extending their “premise” to ensure they can serve liquor legally. Also, removing sidewalk space or reallocating the space may create ADA compliance issues or hazards for less confident walkers. Solutions for ADA compliance issues could be creating parklets, where parking spaces or even entire parking lots could be used as spaces for conducting businesses; thus, leaving the sidewalks open to pedestrian traffic. An additional option is using the areas behind stores, such as alleyways or back-of-building parking lots.

Some capacity solutions may require zoning and permitting changes. Municipalities should be reviewing and revising their rules now. There may also be the opportunity to accomplish some temporary loosening of restriction by mayoral executive order. In cases where downtowns are located on roadways that are not locally owned, the permitting process for closing county or state streets can be slow and complicated when solutions and relief for businesses are needed now. Local governments are looking to the state to provide more comprehensive guidance here.

New Business Frontiers

Businesses will need to reinvent themselves moving forward. Even though stay at home orders and social distancing recommendations will subside eventually, people may still be hesitant to engage in downtowns and within local businesses with smaller spaces. It seems likely that people will want to see stores’ offerings online before venturing downtown to shop or partake in services, which means that stores that previously not had as many online offerings will need to reinvent themselves. They will need to be online, and people are going to want to see what store has before they decide to come in at all. Local gyms and studios may consider hosting activities outside where they can spread out. Businesses will be looking to their local governments for direction and regulations, so the local governments will need clear guidelines about what is permissible and how to ensure that outdoor spaces are clean and safe

Regulation Dissemination and Enforcement

Perhaps most importantly, local governments and downtown organizations are looking for clearer expectations regarding the trickle down of information from the state and federal governments. Right now, downtown managers and municipal leaders are spending much of their time trying to extract information from different government resources about safety policies, as well as the resources available to their small businesses. This has been time consuming and has limited their ability to help support their businesses with on-the-ground tasks. Local governments are hoping for a clear, comprehensive, and cohesive set of regulations from the state regarding reopening.

Below is a summation of the guidance and assistance downtowns are hoping to receive from the state:

Key to Successful Reopening: Consumers need to feel confident that the businesses they patronize are clean and safe, and that employees and fellow customers are able to practice proper social distancing safety protocols to minimize the possibility of transmitting infection.

Immediate Measures: The State can begin with some immediate measures that will ease the strain on NJ’s small businesses now, before full reopening begins:

Retail

• Need clarity as to whether non-essential businesses are allowed to provide delivery and curbside pick. (Update: We are pleased with the announcement that non-essential retail establishments will be able to provide curbside pick-up and delivery starting May 18.)
• Allow certain non-essential retail establishments to open by appointment with strict adherence to social distancing, and protocols to limit consumer contact with products and/or cleaning protocols should contact occur. Customers should not be permitted to try on clothing, sample make-up, etc. These businesses could be monitored by local law enforcement to ensure adherence to health and safety protocols.

Restaurants

• As Jersey City and other places across the US have done, the State should limit (at least temporarily) the fees charged by online ordering and delivery services (e.g. Uber Eats, GrubHub, DoorDash, etc.)
• Protocols currently allow restaurants to provide delivery and pickup of alcoholic beverages in original containers. This should be expanded to include mixed drinks as well.
• The NJ Division of Alcoholic Beverage Control (ABC) should provide leniency with regard to the definition of “premise” for the purpose of expanding outdoor dining to better enable social distancing once they reopen.

General Policy Initiatives

• Enact eviction protections for commercial properties similar to those afforded residential properties by P.L.2020, c.1.
• Extend business interruption insurance coverage, at least partially, to pandemic-related losses.
• Enact a commercial rent assistance program to tenants, and/or deferment assistance program to landlords.
• Re-institute the DBIZ Program to provide additional resources to downtown management corporations to assist their small businesses.

Responsible Reopening: We anticipate a phased approach to re-opening based on location within the state, and ability of a business to implement sufficient social distancing protocols.

Transparency

• Businesses need clear and concise reopening timelines and guidance by sector and location within the State.
  • Implement physical distancing guidelines. For example, California has implemented a staggered reopening approach with industry specific guidance. (https://covid19.ca.gov/roadmap/#guidance) Before reopening, all facilities must:
    • Perform a detailed risk assessment and implement a site-specific protection plan
    • Train employees on how to limit the spread of COVID-19, including how to screen themselves for symptoms and stay home if they have them
    • Implement individual control measures and screenings
    • Implement disinfecting protocols
  • Similarly, Maine created a staggered reopening approach and provided checklists for businesses to follow. (https://www.maine.gov/decd/covid-19-prevention-checklists)
• Businesses are already falling victim to social media trolls saying that they are “unclean”. Businesses need succinct guidelines they can rely on to support their own actions.
• Since the initial shut down, towns and district managers have been spending a lot of time interpreting closure rules and assistance program information as it comes out piecemeal. They feel like they are spinning their wheels to get the right information to their businesses and consumers.

Enforcement

• There needs to be a balance between sufficient regulation for safety and over-regulation such that it is difficult for the business to meet the standards and re-open.
• Will inspections be necessary prior to re-opening? Will it differ by business type (e.g. food handling businesses vs. personal care services vs. retail)? Who will be responsible for doing the inspections?
• Municipalities are already instituting furloughs due to mounting economic concerns, while at the same time feeling the burden of enforcing the closure order. If they have to inspect and/or enforce re-opening protocols, they will need the resources to do so.

Safety First

• Need reliable and readily available virus and antibody testing before consumers will feel truly safe; and even still, we likely will not return fully to pre-COVID consumer habits.
• Need clear and concise protocols related to employee testing and reporting/tracing. Businesses are concerned about liability if an employee contracts COVID. Can they be sued by employees? consumers?
• Need clear written standards for safety protocols, e.g. thickness of plexiglass, access to hand sanitizing stations, signage, etc. Businesses need clear guidance to ensure the safety of their employees and customers.
• Most businesses are already hurting financially – the cost of adapting their floor plan, increasing safety protocols, etc. will come at an expense. Small businesses, in particular, will need financial assistance to meet new standards, and/or adapt to new expectations from consumers related to:
  • Initial cleaning & regular cleanings
  • Floor plan modifications
  • Contactless entry
  • Contactless pay
  • Modernizing and adding/upgrading e-commerce capabilities
  • Accommodating delivery and curbside pick up
• Safety protocols need to be in place with sufficient lead time so that businesses can acquire and install any necessary safety measures prior to the re-open date. Businesses are concerned about supply shortages and price gouging for these materials.
• Economies of scale savings could be achieved if towns and Business Improvement Districts (BIDs) assist small businesses with reopening through bulk purchases, and/or hiring of industrial hygienist and retail design professionals.
  • Provide grants or low/no interest loan to towns/BIDs
  • Re-institute DBIZ Program: The DCA’s Downtown Business Improvement Zone (DBIZ) Loan Fund provides a 0% loan up to $200,000 for physical improvements and projects in an Improvement District with a District Management Corporation. The loans have a 10 to 15-year payback, and only those over $100,000 require a match. This program has approximately $1.9 million funds to lend, but the program has not been active since FY2016.
• An aside, but important – walk signals on all roads (including State operated) should be automatic so pedestrians do not have to touch the pedestrian signal button.

Enabling Businesses to Spread Out

• Many towns are considering expanding restaurant and retail space outside – using the pedestrian and car realms for additional seating and/or “rack sales”. They are considering both the use of parklets and closing streets to cars (temporarily or permanently). They are also contemplating using municipal or private parking lots, and alleyways for this purpose.
• NJDOT discretionary grant funds should allow/prioritize applications that encourage these business supportive strategies.
• NJDOT needs to provide more flexibility on State roads in business districts to enable these strategies (parklets in particular).
• State ABC should, at least temporary, allow extensions of premises to enable restaurants to serve liquor beyond current allowable limits.

Other considerations

• Right now, government and foundations are taking on much of the burden of providing financial assistance to small businesses (e.g. NJEDA grant and loan programs, SBA programs, various national and local foundations). Downtown New Jersey supports the effort to extend business interruption insurance coverage, at least partially, to pandemic-related losses.
• Right now, eviction protections only apply to residential properties. We support expansion of these protections to commercial properties. Additional rent support measures are needed to help minimize the number of vacancies.
• Municipal governments are already realizing real loss in revenue from parking lot and meter fees and enforcement revenues and expect to be hit again with non-payment and appeals of property taxes. We understand that the State has similar revenue concerns. When federal support is received, we hope that some potion is allocated to assisting municipalities fill budget gaps.
  • Related, BIDs are primarily funded through a special assessment collected by the municipality and redistributed to the Improvement District. BIDs provide critical support to their districts related to safety, sanitation, beautification, marketing and other economic development activities. As we start to realize high rates of retail vacancy, BIDs will be at the front line of marketing and business attraction. It is, therefore, important that they continue to receive the resources necessary to provide services to their districts.
• It is anticipated that this economic upheaval will result in commercial vacancies of 25-30% or more. Food and beverage services will be one of the hardest hit, more in the realm of 40 – 50%. To encourage new restaurant businesses to open post-pandemic, now is the time to reconsider New Jersey’s antiquated liquor licensing laws to give them a leg up.