Aspen’s economy temporarily propped up by feds
PPP MAKES IT TO THE VALLEY
Editor’s note: This is the second story in a two-day series on how the rollout of the Payment Protection Program has been implemented in Aspen and the Roaring Fork Valley.
Sunday’s story focused on area banks that were able to work quickly to attain millions of dollars of loans from the federal government to help local businesses.
On Monday, we focus on Aspen businesses that received PPP funds and are mapping out ways to use the money under the guidelines while those who didn’t are wondering if they will get in on the latest funds made available or if they’ll survive without them.
Hundreds of Aspen small businesses have a lifeline to continue to exist during the economic crisis thanks to the federal government’s Paycheck Protection Program, but for some the relief is not coming soon enough.
Across various sectors of retail, restaurants, lodging and professional services, business owners say using local banks was key to securing the federal government’s forgivable loan known as PPP.
“It was harder to get in other places around the country,” said Donnie Lee, general manager of The Gant condominiums, which received PPP to cover payroll of its 90 employees for eight weeks.
He said it was a good message to be able to send to the board, which represents all of the condo owners, that The Gant’s close relationship with Alpine Bank made it possible.
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The Gant, like many other Aspen businesses, got in the program during the first round of PPP funding — before the coffers were depleted.
“It allows us a longer runway to weather the storm,” Lee said, adding that by not having to cover payroll for two months, expenses like landscaping and property management can be covered in advance of an eventual reopening once public health orders are lifted.
The PPP, which has been funded for a second round that begins Monday, is available to businesses with no more than 500 employees. It provides as much as $10 million to qualified businesses through the Small Business Administration’s loan program.
If at least 75% of the money awarded is used for payroll in an eight-week time frame, it’s a forgivable loan. If not, it has to be paid back at a maximum rate of 4% and no more than 10 years.
Detailed information on how to comply with the rules and successfully apply for loan relief have not been made clear yet.
That’s why Dave Ellswieg, general manager of Campo de Fiori and co-owner of Starbucks in Aspen, said he is relieved his establishments didn’t make it in the first round of PPP funding.
He’s been told by his financial institution that they are cued up for the second round of funding.
“Our biggest concern is understanding the parameters and what the ramifications are if you don’t follow them,” Ellswieg said. “Being in the second round was fortuitous because as time goes on, we’ll understand the terms of the loan.”
Making sure employees stay on the rolls at whatever levels they were when the loan was approved can prove challenging for some businesses.
Longtime retailer Bob Wade, who owns the Ute Mountaineer with his wife, Ruth, said he’s paying a staff of around 20 even though the store is closed per the county’s public health order.
“You want to use your staff to create revenue,” he said, adding some employees are working, but not everyone. “We’re going to redistribute the staff to volunteer in the community.”
When the PPP funding was first announced, Wade said there was a feeling of urgency and uncertainty, so the Ute got in the queue quickly with Alpine Bank.
“It was a rush job for sure,” he said of the PPP. “It’s not going to do what it was intended to do for small businesses.”
If he had a crystal ball, Wade would’ve benefited from the second round of PPP, because he’ll likely be open in some fashion in the coming weeks if public health orders are amended.
But it’s the right thing to do to keep people employed and away from the unemployment rolls, area employers agreed.
For Kate Owens, owner of Valley Veterinary Hospital in Rifle and All Pets Mobile Vet, which serves Aspen to Rifle, she is covering payroll in both businesses through PPP funds.
While the mobile vet is closed because of the public health orders, which are designed to slow the spread of the novel coronavirus, the Rifle operation is open, although business is slower because of restrictions.
When Owens fully reopens, she wants her team, many of whom are specialized doctors and staff, intact. Combined, Owens employs 17 people.
“It’s hard to replace them,” she said. “It’s making sure my staff is being taken care of.”
Owens said the PPP is crucial in keeping her businesses solvent.
“It’s helping because we’ve seen a reduction in revenue and it helps me be able to pay for things like equipment repairs,” she said.
Brad Jasicki, owner of Replay Sports, got caught stuck in the queue in the first PPP funding round by going through Wells Fargo, where he’s done business for nearly two decades.
He said he was told it was first-come, first-served and to wait for the application link to appear online when the program opened, but that took longer than what was advertised.
After being repeatedly told via email that he was in the queue, Wells Fargo finally recommended that Jasicki use a different bank because they couldn’t process the application.
“Timberline (Bank) came through for me and said I was accepted through the SBA,” he said, adding that it’s been stressful while he’s waiting for the money to appear in the bank. “That PPP was tough.”
He’s got three employees he’d like to pay, including one who was sick.
“I want to pay sick leave and I’ve got zero income coming in,” he said. “(PPP) is buying time because the future is uncertain, so yes, of course it assists me because I won’t even probably use it until we are open.”
The local economy was jamming up until the COVID-19 outbreak in early March when 13 Australian visitors tested positive.
Shortly after, public health orders shut down the spring break party throughout the resort.
“We lost three of the most lucrative weeks in March that we won’t get back,” said Campo de Fiori’s Ellswieg, noting that business in the summer is a big question mark.
Major events like the Food & Wine Classic in Aspen, Aspen Ideas Festival and the June Jazz Aspen Snowmass Experience have canceled.
Jim Horowitz, president and CEO of Jazz Aspen Snowmass, said without ticket sales, revenue has dried up.
A “low six-figure amount” of PPP, through Alpine Bank, is enabling him to keep his team of six employed.
“It’s a crucial lifeline right now,” he said. “It’s going to be tight but the PPP helps.”
The PPP is helpful for small operations, which is what most of Aspen’s economy is made up of.
Tricia McIntyre, owner of Aspen Luxury Vacation Rentals, first tried to obtain PPP funds through Wells Fargo thinking that because they are big and deal with small businesses they’d come through.
But that proved to be difficult, so McIntyre turned to FirstBank and was able to get PPP to pay her five employees for the next two months.
“I’d rather keep them on staff, and we didn’t skip a pay period because of it,” she said. “It’s buying time and saving our little town.”
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Each week for the next month, Pitkin County will allow a new group of businesses to open under guidelines meant to prevent the spread of COVID-19.