Downtowns across the country are in upheaval, but San Jose’s downtown is in a particularly difficult position as the coronavirus pandemic stretches through what was set to be a period of growth in the city only a handful of months ago.
San Jose Downtown Association leaders say they’re ready to make moves to help small businesses limping along, think creatively about filling storefronts that are already emptying out and are prepared to become a more active force in curbing the area’s growing homeless population to help draw people back to the city’s central business district.
The pandemic has made the issues San Jose was facing before the coronavirus arrived even more urgent, said Brad Segal, president for Denver-based consultant Progressive Urban Management Associates (PUMA). The group on Friday unveiled a report that aims to plot a course for recovery, not only for the city’s downtown, but for the 31-year-old San Jose Downtown Association itself.
“Our basic conclusion here is that the pandemic is more of an accelerator of trends than necessarily something that is fundamentally changing a lot of things there will be changes,” Segal said Friday during a webinar on the report.
That document encourages the city’s downtown association to market and promote the downtown area generally, become a local leader in snagging and keeping storefront retailers, update its own business and funding model and to grow its popular Groundwerx cleaning and maintenance program.
Across the board, downtown San Jose leaders and the 1,254 residents surveyed said that keeping the downtown clean and safe, including through Groundwerx, was among the most valuable services the association provides. The program deploys workers wearing bright-colored shirts in the city core to ensure the area is well-maintained.
“We ask this question and other downtowns and we rarely get this strong of a consensus from constituents,” Daniel Makela a senior associate with PUMA said.
But as visitors remain scarce in the downtown due to the pandemic, homeless residents have become more “visible,” according to the report. The downtown association could expand the boundaries that the Groundwerx crew cleans and task the team or others with providing more information and resources to get the unhoused off the streets, the report suggests.
That typically hasn’t been the downtown association’s role, but it could become an area of focus, Scott Knies, president of the San Jose Downtown Association said.
“We've been successful because we've stayed in our lane, and we have said what we're going to do, and we give results to our property owners,” he said. "What we're hearing from our property owners and our members, is that more needs to be done in this area.”
If some of the homeless downtown residents who are exhibiting mental or behavioral health conditions were placed into programs to address those issues, “the safety level and comfort level of downtown would increase dramatically,” Knies said. “We’ve not really seen anyone focused on that and if that’s not going to happen, I think what you're seeing in today's plan is that perhaps we should be stepping into that role.”
The 'Storefront Economy'
Those surveyed also said they wanted the downtown association to focus on social efforts to ensure everyone feels at home in the area and supporting small businesses and entrepreneurs.
Those two initiatives can go hand-in-hand, through focusing on arts and culture events, installations and socially-minded retailers.
But for now, one of the downtown association’s most pressing mandate is simply to try to keep existing small businesses and retailers afloat and help fill the empty storefronts in the city’s urban core. A majority of downtown businesses—as much as 75 percent—are at risk of shuttering permanently if conditions don’t improve by the end of the year, according to a recent study by the city of San Jose.
“I think there's a real opportunity in San Jose with some of the major corporate players that you have there to be participants in some sort of investment fund, particularly something that would bolster the storefront economy,” Brad Segal, president for PUMA said. “That would have direct benefit for them long-term, it would help continue to provide that invigorating downtown environment that's so important to employee retention and recruitment.”
Indeed, most people surveyed for the report said they aren't yet comfortable with the idea of returning downtown for fun.
Meanwhile, some of the few retailers that exist in downtown have already called it quits, including Japanese retailer Muji, which declared bankruptcy last month and announced July 31 it would indefinitely shutter all of its California locations.
“The downtown association needs to be the leader in nurturing the storefront economy downtown, both through the stabilization and recovery period over the next 12 to 18 months and then a strong focus there beyond,” Segal said.
One way to do that may be to create a new street-level “Small Business Support Center,” to boost the group’s visibility, where business owners can drop in to get information and resources like answers to questions around coronavirus planning, applying for city permits, marketing advice or the like.
The downtown association is already thinking about working with landlords who will be faced with empty property, Knies said.
“We are looking at a reckoning with, as we're calling it, the storefront economy, and we are going to have many vacancies,” he said. “There's going to be a reckoning with our landlords and, you know, are you going to keep space vacant or are we going to look at how we're going to reuse the space?”
Meanwhile, the San Jose Downtown Association will also have to tackle change from inside the organization, which made a name for itself by hosting large events and festivals, which makes up about one-fourth of the organization’s revenue.
Those are not feasible for now due to the pandemic. But such events also may not be the best way to move the organization forward in the long-term, either, Segal said, encouraging the organizations to focus on other parts of its organization and smaller events.
“In the short term, some of that festival energy, we're suggesting be redirected to the storefront economy, and really helping small businesses survive through this,” he said.