Coronavirus in Oklahoma: Tenants, landlords and bankers scrambling to survive pandemic's economic ruin
It’s the storm nobody saw coming until it was on the horizon.
For 22 years, Jeremy and Kristy Witzke prided themselves in going to great lengths to keep their pub, TapWerks, open during the worst of weather extremes, providing meals to downtown hotel guests, workers and residents when most other places closed.
When ice storms hit, the couple provided transportation to employees and a room at a nearby hotel. They never once closed their doors.
But on Tuesday, the doors did close at TapWerks as orders came from Mayor David Holt that pubs like TapWerks were being restricted to take out orders as the potentially deadly coronavirus quickly emerged as a local threat.
Thousands of businesses like TapWerks are imploding and the trauma goes up the line to the landlords and their lenders, with some in tears over the difficult choices and uncertainty they face.
The Witzkes remember life before the March 11 NBA game between the Oklahoma City Thunder and the Utah Jazz, compared with life after when the game was canceled following a positive coronavirus test for a Jazz player.
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Bricktown, usually a bustling destination for St. Patrick’s Day celebrations and spring break, turned into a ghost town.
“This whole thing popped off Wednesday of last week,” Jeremy Witzke said. “With our big St. Patrick's Day festival Saturday that we normally have in the parking lot, we held it with all the precautions and tried to avoid contamination. Normally we do $20,000 on it, and instead we did $2,000. Inside we usually do another $30,000 in sales and instead we did just $15,000.”
On Tuesday, actual St. Patrick’s Day, the restaurant sold two burger orders to-go and seated one table for four.
The Witzkes visited with their 40 employees and broke the bad news: TapWerks was shutting down for the first time in 22 years. Employees were sent home with perishable food that otherwise would go to waste.
The unknown is what scares business owners like the Witzkes. Rent is high up on that list.
Rent payments and lenders
TapWerks, 121 E Sheridan Ave., is one of several commercial properties owned by a group led by Andy Burnett. On the same day the Witzkes shut down, Burnett called with some good news.
“I’m telling them we’re not charging rent,” Burnett said. “We’re partners together. We’re going to figure it out.”
Similar calls were made to Barrio’s Mexican Kitchen in Midtown and Garage restaurants in Edmond and Tulsa.
“The sun will shine again,” Burnett said. “The sun will come back out. The world is going to come back. We can’t pretend that this isn’t a real thing. It’s a real thing. It’s impacting people’s lives. People will eat at Barrio’s again. And I’m telling my tenants, hang in there.”
Other landlords are weighing their tenants’ need for rent relief with ongoing bank payments.
Jonathan Dodson, a partner in the Pivot Project, has seen a number of tenants in Uptown, the Plaza District and Midtown hit hard by the emergency shutdown order.
They include Stonecloud Brewing Co., forced to shut down its tap room; the Tower Theatre and Ponyboy, unable to host audiences for concerts and events; bars like the Bunker Club, required to close altogether, and restaurants like Revolucion trying to reinvent how they can stay open with just take-out orders.
“It’s really just everyone realizing they’re not going to be able to pay their whole rent,” Dodson said. “So the question is what rent can they pay so they are set up to survive. They’ve set up their brands over the past three or four years and now this is happening to them.”
Dodson credited his lenders — Farmers Bank, First State Bank, Oklahoma Fidelity Bank and Citizens Bank — for being “very responsive” to the crisis.
Jeff Struble, landlord to an array of restaurants and shops in the Plaza District, notified tenants about rent relief made possible through assistance from his lenders at FNB of Oklahoma.
Some property owners, meanwhile, say they are more constrained in what relief they can provide to tenants due to ongoing costs combined with loan payments.
Outside of the city’s three shopping malls, Lower Bricktown may post the biggest challenge for its ownership group, led by Brad Hogan.
Most of the sprawling development has gone dark with major anchors like Harkins Theatre among those being forced to close. Restaurants looking out over the Bricktown Canal are poorly set up for carryout sales, especially when downtown itself is being emptied out of thousands who are now working from home.
And how can an anchor like HeyDay Entertainment, a restaurant, bowling alley and game room, survive when their business relies on group and corporate bookings?
Hogan is tasked with not just maintaining and securing Lower Bricktown, but also with maintenance of the canal areas.
“Our problem is we have bank payments,” Hogan said. “And we still have all the common area costs. It’s not like we can just do that easily. We have to visit about what we can and can’t do.
"This is going to get pretty ugly pretty quick in terms of people being able to pay their bills. This is just unprecedented.”
Is relief coming?
Girma Moaning, a broker with Price Edwards & Company and past president of the Commercial Real Estate Council of Oklahoma City, is urging property owners to contact their lenders.
“I know of four or five large developers and several smaller ones who have projects ongoing and (are) calling their banks asking if they can get a rent holiday,” Moaning said. “As a landlord, you’re facing either killing your tenant on the front end or giving them a break to try to help them survive through this.”
Moaning said business and property owners remain confused over whether relief is coming via the Small Business Administration. Very few insurance policies cover losses caused by a pandemic.
“When people have bad news, they can usually plan for it and find a solution to solve the problem,” Moaning said. “But they truly struggle to deal with uncertainty. If there is to be some stability, we have to have some information.”
Help is coming
Sean Kouplen, Oklahoma Secretary of Commerce, understands the confusion and uncertainty. He promises SBA relief is coming and shares business owners’ anxiety with the wait.
“Oklahoma has been approved as a disaster-eligible state and all 77 counties are declared eligible,” he said. “The challenge is waiting for the SBA to load us up on their website. Until we are listed on their site, our businesses are unable to apply.”
As of Thursday, only six states were on the website and accepting applications, Kouplen said. He has been assured Oklahoma will be online by Friday.
“Like everyone else they have limited resources,” he said.
Kouplen is advising business and property owners to visit the website, disasterloan.sba.gov, and register with an account and password so they can begin application when Oklahoma is added to the list.
Kouplen is also urging business owners to print a copy of the form, which also is being provided at www.oklahoman.com, so they can begin assembling the “extensive” information required for the application.
“We want to help,” Kouplen said. “Our hands are tied. Until they get us up on the site there is no way to apply. It may take a day or two for people to get the information that is needed.”
Also serving as CEO of Regent Bank in Oklahoma City and Tulsa, and a property and restaurant owner, Kouplen said he understands the pain and confusion felt by all involved.
On Thursday, Jill Castilla, CEO of Citizens Bank of Edmond, notified consumer customers details of loan payment deferral options. She said loan officers are calling business customers to detail how the bank’s COVID-19 Relief Program can help their cash flow needs.
Kouplen said his bank is offering business customers multiple months of interest-only payments, payment deferrals and operating capital when possible.
He credits banking regulators with easing rules to make it easier for banks to provide more help to their customers.
“We have to be careful because we don’t want the bank to go under,” Kouplen said. “But I believe customers will find their banks will do the same thing. Call your banks — you might be surprised at how flexible your bank will be.”
The Witzkes are determined to do what they can to survive and keep intact their work family and preserve their “hometown pub.”
“We’ll be back,” Jeremy Witzke said. “And that’s something I’ve told my employees. We’ll be back and I hope the community realizes the economic impact it has to this day.
"I can’t get St. Patrick’s Day back. That’s done. That won’t come back in June. I just hope our patrons realize that. And that we will need to support these small businesses.”
Waiting for the SBA
Even though Oklahoma applications for Small Business Administration assistance are still pending at disasterloan.sba.gov, business owners can click on the “apply online” link and then register a user name and password to save time when applications start.
Oklahoma Secretary of Commerce Sean Kouplen warns the application requires extensive information. A copy of that application is being provided at www.oklahoman.com to print out and begin assembling the required information. It can also be found at disasterloan.sba.gov.
Employees furloughed or laid off are being urged to download the OKjobmatch phone app in which they can provide their ZIP Code and desired work location radius to be matched up with potential jobs.
He said the Oklahoma Employment Security Commission has streamlined its website at oesc.ok.gov and is cutting red tape and eliminating waiting periods. The requirement for activity searching for a job to receive assistance is being put on hold and now has an eight-week return-to-work period, he said.
“For people laid off, we still have thousands of jobs still available in Oklahoma,” Kouplen said.