In just two weeks, the coronavirus pandemic has brought an unprecedented level of uncertainty to Connecticut businesses, residents and government.
The virus is already having a significant impact on the state’s economy, as schools, restaurants, bars, gyms, casinos, malls and movie theaters have shuttered and employees who are able to do so work remotely, some with school-aged children also stuck at home.
Credit-rating agency S&P Global said the epidemic has pushed the world’s economy into global recession.
Unemployment claims have spiked, and state lawmakers and the federal government have pledged relief packages aimed at easing some of the pain for businesses and workers.
The severity of the fallout will depend on how long the new conditions last. Some are hoping it might be a few weeks or a month more, but experts have targeted July or August as the infection’s potential U.S. peak.
Hartford Business Journal has tried to chronicle how coronavirus is impacting Greater Hartford businesses and the economy in general. Here are some highlights:
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In response to the massive economic slowdown, Gov. Ned Lamont’s administration has taken several steps to provide small businesses relief including announcing a loan forbearance program for any companies with state government loans. A stimulus package will also be considered by state lawmakers.
Still, there is plenty of uncertainty about just how much Connecticut’s economy will hold up in the coming months.
“The real question in my mind is the duration of this thing, is it a two to three to four month thing or a six or nine month event,” said David Lehman, commissioner of the state Department of Economic and Community Development. “It’s my view that this is certainly having a big impact but there is no precedent for this where parts of our economy literally stop. What’s challenging here is that what is right from a public health perspective is counter to the way our economy is set up and works.”
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State Department of Banking Commissioner Jorge Perez has encouraged state-chartered banks and credit unions to ease credit terms for new loans, waive overdraft and late-payment fees as well as withdrawal penalties for certificate of deposit accounts, while still maintaining “safe and sound banking practices.”
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The 80-employee Connecticut Science Center has closed for at least two weeks, during what is typically a busy time of year, said Matt Fleury, president and CEO of the nonprofit.
A long-term closure presents an immeasurable financial problem for the Center, which operates on an annual budget of about $9.4 million, Fleury said. About 60% of the Center’s income comes from concessions, gift shop and ticket sales. Without that money coming in, the Science Center is losing about $130,000 per week.
“I would say it presents a very serious outlook for us in which we’ll have to make some very difficult choices,” said Fleury, adding the Science Center has reserve funds and a line of credit available to get it through tough times.
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The state’s Department of Revenue Services has granted an extension of Connecticut filing deadlines for certain annual tax returns in order to support businesses during the COVID-19 outbreak.
The filing deadlines for certain annual tax returns due on or after March 15, and before June 1, are extended by at least 30 days. In addition, payments associated with these returns are also extended to the corresponding due date in June.
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The Mashantucket Pequot and Mohegan tribal nations agreed to close their respective casinos — Foxwoods and Mohegan Sun — for two weeks, beginning March 17.
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Small businesses in Connecticut are now eligible for federal emergency loans of up to $2 million, and the Hartford Foundation has launched a $1-million fund to respond to the needs of Greater Hartford residents impacted by the COVID-19 virus crisis.
The loan program falls under the purview of the U.S. Small Business Administration, which will lend directly to companies.
Businesses that qualify may apply for loans of up to $2 million with interest rates of 3.75%; payment plans can be stretched as far as 30 years. The interest rate for nonprofits is 2.75%.
The foundation’s funding will support community-based organizations responding to the medical and economic issues from the outbreak.
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With state unemployment claims skyrocketing to 30,000 in four-and-a-half days, the Department of Labor announced it’s begun at-home practice drills to ensure claims processing will continue amidst the coronavirus crisis.
“I’ve been with the Labor Department since 1992 and this is unprecedented claim activity,” said Deputy Labor Commissioner Daryle Dudzinski, adding that even during the last recession — America’s worst economic downturn since The Great Depression — day-after-day of claims in the multiple thousands was not happening. “It exploded then over weeks and continued.”
If the trend continues, it could soon eat away at the state’s unemployment trust fund balance, which stood at about $615 million on March 18. The state would seek to borrow federal money when and if the fund balance, which is underwritten by employers, falls to about $115 million.
— Keith Phaneuf, CT Mirror
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The spread of coronavirus slashed Hartford Restaurant Group’s sales by about a third in the days before Gov. Ned Lamont banned on March 16, all dine-in services at Connecticut bars and restaurants, according to co-owner Phil Barnett.
A complete shutdown of operations is now forcing the group — which manages nine Wood-n-Tap restaurants and Southington’s Que Whiskey Kitchen — and all local restaurateurs to decide how that will impact staffing levels, said Barnett, who is also president of the Connecticut Restaurant Association.
“Our heart wrenches for our staff right now,” said Barnett. “All of our counterparts are all trying to figure this out and how do we care for our staff. How many can we retain?”
Barnett and co-partner Mike Hamlin manage a roughly $32-million restaurant group that had about 700 employees across the state before the crisis.
The longtime friends are still planning to launch another Wood-N-Tap location in Enfield sometime this spring, but an opening date is in limbo.
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Fred McKinney, an economist at Quinnipiac University, had this to say about the impact of coronavirus:
“The appropriate response to the current health crisis is to deploy all available resources to combat the virus. In terms of the economy, the bold actions that need to be taken at the federal level should be to increase dramatically paid sick leave to every American worker. Congress recently did that, which is a good thing.
If we want workers to stay home when they or members of their households are sick, we should pay them to stay home. And when this crisis is over, this is a benefit that should remain.”
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Passenger traffic at Bradley International Airport is plummeting, as major airlines cancel flights and suspend routes.
Aer Lingus, which runs flights to Dublin, suspended service until at least April 15, according to Kevin Dillon, executive director of the quasi-public Connecticut Airport Authority.
“Other airlines have announced varying levels of reduction,” Dillon said. For example, United Airlines suspended flights to Houston until further notice, but that could change.
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Amid Gov. Ned Lamont’s restrictions on small and large gatherings, arts organizations are scrambling to figure out how long they can survive under current circumstances.
“We’re in existential trouble,” said Cynthia Rider, managing director of the nonprofit Hartford Stage, which seats up to 489 people in its theater at 50 Church St.
Hartford Stage already canceled its current run of “Jane Eyre,” and its next play, “The King’s Speech,” which was supposed to run March 19 to April 19, Rider said.
The organization’s survival largely depends on the generosity of donors, Rider said.
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Greater Hartford colleges and universities — including UConn, the Connecticut State Colleges and Universities system, Trinity College, University of St. Joseph and University of Hartford — have all moved their classes online to avoid gatherings of small and large groups.
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Alissa DeJonge, vice president of research at AdvanceCT, the state’s economic development partner, said “the economic impact of the coronavirus will be widespread for Connecticut, as it will be for most all states across the nation.”
UConn economist Fred Carstensen said the biggest job growth in the state in recent years has been in hospitality and tourism, which will be among the hardest-hit sectors in the short run and whose workers — low wage, few fringe benefits — will be hurt significantly.
“Right now, the biggest problem is just the massive uncertainty we face across the globe and across the nation,” said Carstensen.
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Farmington-based CaroGen and scientists from Yale have begun work on a vaccine targeting the coronavirus.
The team is basing its approach on previous work done by CaroGen co-founder and scientific chairman, John Rose, in the wake of the global SARS epidemic of 2003. The coronaviruses that cause SARS and COVID-19 are genetically similar.
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The Connecticut Lottery Corp. is expecting a 24% decrease in Keno sales effective immediately, which amounts to approximately $700,000 per week, according to CEO Gregory Smith.
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Hotel operator Gary Desai, president of Berlin-based Lotus Hospitality Inc., said he’s already reduced hours for an unspecified number of part- and full-time workers amid a major dip in occupancy.
“We can’t give a ballpark, but the [economic] hit has been substantial,” said Desai, whose group manages several national brand hotels, including Choice Hotels International, Best Western International and Hilton Worldwide. “We are seeing declines in every segment of the business,” including events.
The American Hotel and Lodging Association estimates the nation’s hotel industry will lose nearly four million jobs in 2020, with a year-long occupancy rate of about 30%.
