By Hannah Miao
Cathy’s, a gourmet ice cream sandwich shop located in The Arcade at East 4th and Euclid in downtown Cleveland, shut down for about two months when the Covid-19 pandemic first hit.
During that time, they launched a new product line called Cathy Cookie Kits: sets of 12-ounce cookie dough jars that are ordered online and shipped directly to customers.
When they reopened May 15th after implementing safety measures like adding sneeze guards, closing dine-in seating and switching to no-cash transactions, owner Catheryn Greene says the storefront saw a healthy business eventually return. Cathy’s reported a record-breaking weekend from August 22nd-23rd.
“We’ve seen an influx really from people who live downtown and people who hear about Cathy’s and want to come and support a Black woman-owned business that has a great product and is an exciting and inviting atmosphere,” she says.
The cookie kits have also taken off. “We ship all across the country every single day,” says Greene. “For entrepreneurs, especially if you are in the food industry in this type of fast-casual area, I think it’s pivotal to make these types of changes or pivot in whatever capacity.”
As downtown businesses have ramped up e-commerce, delivery and takeout to adapt to new restrictions during Covid-19, they’ve seen fewer office workers and visitors returning as customers. With work-from-home turning downtown into a primarily residential neighborhood practically overnight and major live events out of the picture, these businesses are having to lean into innovative and neighborhood-based strategies.
“The underpinnings of the economy downtown are much more multidimensional and much more neighborhood-based,” says Joe Marinucci, president and CEO of Downtown Cleveland Alliance (DCA). “That’s the downtown that we’re going to grow into the future.”
Marinucci says that before the pandemic, about 105,000 people commuted into downtown for work every day. With people still working from home or coming into the office less frequently, he estimates that the district is currently seeing about 20% of the typical volume of office workers. That shift translates to a significant loss of foot traffic for retailers and eateries, particularly those that depend on a busy lunch crowd.
“We think we’ll see another influx of additional employees in the early fall,” says Marinucci. “I think by the end of the year we’ll see a majority of employees migrating back into downtown, but it will take a while for us to go back to pre-pandemic levels.”
Fine dining has also been hit hard, especially restaurants that draw heavily on sports, concert and theater visitors. So far, DCA reports about a dozen downtown establishments have permanently shut down.
Closures of businesses like Bar Louie and Brooks Brothers were less likely linked to the pandemic; they’re national companies that have both filed for bankruptcy. But recent losses like Chicago’s Home of Chicken and Waffles near Playhouse Square and XO Prime Steaks in the Warehouse District were directly derived from Covid-19 conditions.
Crain’s Cleveland Business reported that Chicago’s Home of Chicken and Waffles owner Darnell Johnson made the decision to shut his doors due to health concerns, rather than sales. “I love Cleveland. I would love to come back to Cleveland,” Johnson told Crain’s. “But I want to wait until everything is right health-wise.”
A statement posted in May on XO Prime Steaks’ social media stated, “I looked at a million angles but unfortunately this is the only viable option. The Covid health crisis created current conditions that made it impossible to continue operations for us.”
Temporary closures and the reopening process
More businesses remain temporarily closed, though it’s too early to say how many will reopen in the near future or close their doors permanently.
Many are currently working through insurance settlement processes following the civil unrest on May 30, which resulted in an estimated $6.3 million in property damage and lost income. DCA and several other corporate and civic partners raised about $1.45 million for the Downtown Recovery Response Fund to help close insurance gaps for over 100 recipients. Marinucci says only around 10 businesses have received the grants so far, so he anticipates more businesses will gradually reopen as funds are dispersed.
Tom Starinsky, associate director of Historic Gateway Neighborhood Corporation and Historic Warehouse District Development Corporation, says, “Some businesses are thoughtfully not opening just yet as a strategy to save on costs.”
Businesses may be waiting to see what nearby spaces reopen. There’s a multiplier effect once that happens. “Once more restaurants and establishments opened back up, we saw an uptick in traffic,” CLE Clothing Co. owner Mike Kubinski said in an email.
A few prominent businesses have announced reopening plans. Parnell’s Irish Pub will reopen on September 14, according to a DCA list of 128 open downtown businesses. DCA also reports that Heinen’s will reopen in the fall, though no official date has been specified.
Geiger’s also plans to reopen its downtown storefront when the time is right. “Our optimism for the region and downtown Cleveland in particular hasn’t changed. … It just needs to make sense business-wise,” says co-owner Gordon Geiger. “It’s all about traffic. What’s exciting is that residentially there are still buildings that are going online for rental, even now.”
A growing residential neighborhood
Though Cleveland is a shrinking city, downtown Cleveland is the fastest growing neighborhood in the region. Michael Deemer, EVP of Business Development for DCA, said in a recent webinar, “Between 2013 and 2018, the downtown Cleveland population grew by 48%. In contrast, the fastest growing suburb in Cuyahoga County grew by 3%.”
By the end of the 2020, around 1,200 new housing units are set to hit the market, including the Euclid Grand located across from Heinen’s and Geiger’s. While occupancy rates have fallen from 92.2% this time last year to 86.3% currently, some of the drop can be attributed to the influx of 675 housing units added in the past year. Recently green-lit developments like the City Club Apartments suggest that downtown housing demand remains strong.
Marinucci says downtown is on track to surpass 20,000 residents by the first quarter of 2021, with the next goal to reach 30,000 residents by the end of the decade.
“Residents animate space much differently than office workers animate space,” says Marinucci. “People who live downtown are more likely to think of downtown as a neighborhood and frequent their neighborhood establishments.”
Downtown dwellers patronize the same attractions that draw suburban and out-of-town visitors, but also routinely utilize everyday amenities like groceries, pharmacies, retail and casual food and drink. They’re out and about several times a day jogging, walking the dog and running errands.
A DCA survey conducted in May found that downtown residents feel more comfortable safely dining, shopping and visiting gyms, studios and salons than downtown workers and regular visitors. And if remote working continues, they’re staying in the neighborhood. (Less than 10% of downtown residents work downtown, so work-from-home tips in downtown’s favor in this case.)
If the last several months have proven anything, it’s that downtown’s residential base is vital to keeping businesses afloat. While office workers and visitors may not be returning to downtown in typical volumes right away, a growth in residents provides a sustained consumer base for businesses continuing to weather the pandemic.
New businesses open to serve residents
Several new businesses have even popped up downtown since the pandemic started, including Beyond Juicery + Eatery, Citizen Pie Roman Café and Betts. These new ventures have been built with Covid-19 restrictions in mind and fill in gaps in the downtown ecosystem.
UJerk, a Caribbean fast-casual eatery, opened on July 17th in the City Club Building. Part-owner Jenna Murphy says all of the owners live downtown and were motivated to launch UJerk after noticing that the area lacked Caribbean food options.
Since opening, they’ve received a lot of business from residents and office workers picking up takeout during lunch hours. UJerk also recently joined Uber Eats to offer delivery options for customers. “We’ve been doing really well,” Murphy says. “People seem to be tired of eating at home.”
Sixth City Sailor’s Club, a restaurant and bar that has taken over the former Hodge’s space, recently celebrated its grand opening on August 15. With a large outdoor patio and plenty of space for social distancing, Sixth City Sailor’s Club is made to work in the era of Covid-19. Owner Joey Fredrickson says they’ll also start focusing on to-go orders and Uber Eats soon.
At the moment, it’s difficult to predict the longterm impact of Covid-19 on downtown Cleveland’s office market or entertainment economy — and the subsequent effect on downtown businesses. But if anything, the pandemic has solidified downtown Cleveland’s position not just as an economic center, but also as a neighborhood.
As a downtown resident himself, Fredrickson set out to create a neighborhood bar atmosphere. “So many businesses I see downtown cater only to the people that come downtown,” he says. “I really wanted to create a nice ‘third place’ for downtowners to relax and see their friends.”