From AVL Watchdog: A post-pandemic Asheville faces a daunting return

AVL Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County.

By Jason Sandford and Sally Kestin

Asheville’s thrumming downtown, a darling of the “best of” list makers and an economic hub for Western North Carolina, stands quiet as its once harried restaurant owners, beer-thirsty tourists and Millennial workers hunker down to avoid the health threat posed by a deadly coronavirus.

Boarded-up storefronts warn off patrons in scenes reminiscent of the 1970s and ’80s. Visitors who just a few weeks ago poured into town by the thousands have vanished, and gleaming new hotels stand empty. But talk is gradually shifting toward a restart.

What might a post-pandemic Asheville look like? AVL Watchdog asked nearly two dozen elected officials, business owners and leaders in the arts, and the picture is sobering: a recovery lasting a year or longer, as many as 40 percent of small businesses closing, restaurants struggling to hang on, and an arts community in desperate search of buyers and benefactors. From the manicured grounds of the Biltmore Estate to the downtown streets full of buskers, Asheville is staring down a slow and daunting return.

“It’s not going to be like an ‘open up the Walmart on Black Friday’ kind of thing, where everyone just rushes into the stores and starts shopping,” said state Rep. Brian Turner, a Democrat from Buncombe County. “It’s going to be a phased, gradual restarting of the economy.”

Brownie Newman, chairman of the Buncombe County Board of Commissioners, predicted “the next four or five months will be quite depressed, and the recovery will be slow.” 

“There are a lot of concerns about a second wave [of infection] in the early fall and winter,” Newman said. “If that’s the case, the idea of an economic recovery in fall and early 2021 will probably not be what happens.”

Mountain BizWorks, a nonprofit administering financial assistance to businesses in the crisis, is preparing owners to brace for the long haul. “We’re going to have a one-yearlong coronavirus economy, and how can your business exist in that?” said Matthew Raker, executive director.

Proprietors are revamping, shifting to online sales or takeout and delivery, but questions of viability loom large, especially if the shutdown lasts well into the summer.

Even celebrity chef Katie Button is worried.

“There may be a day where I have to sit and face some very dark realities,” said Button, owner of Cúrate and Button and Co. Bagels. “And there may be days when a bunch of different restaurant owners in town have similar moments.”

Already, the toll is mind boggling: The Biltmore, one of Asheville’s premier destinations drawing 1.4 million visitors a year, has closed its gates and furloughed 2,000 employees. The Omni Grove Park Inn, now temporarily shuttered, laid off 800 workers in one day. Thousands more – Asheville’s bartenders and baristas, servers and store clerks – are navigating the unemployment lines.

And the worst of the disease outbreak may still be ahead, with a peak in cases at the end of April, followed by a plateau in May and a decline beginning in June, said Rep. Turner, who is receiving regular updates from public health officials. He worries the economics may no longer work for many small businesses, changing the face and character of Asheville’s downtown.

“I think you’re going to see a lot of landlords who are going to get hurt by this, so when it comes time to repopulate downtown, they’re going to be much more wary about taking on a new business or a start-up or an independent business,” said Turner, who works in commercial real estate. “You may see some turnover of buildings and having them being picked up by outside entities, which will care even less about maintaining the character of downtown Asheville. They’re just going to worry about whether they can stick a J.Crew in there.”

From budding artists to the tapas bars, here are predictions for how the pillars of Asheville’s once-thriving economy could fare.

Reopening for tourism

For a city that consistently attracted 11 million visitors annually, tourism will be a key to recovery. The $2 billion-a-year industry supports 27,000 jobs, or 15 percent of Buncombe’s workforce, according to the Explore Asheville Convention and Visitors Bureau.

Newman, the county commission chairman and the local official with authority over the “stay home, stay safe” orders, said that when to hang an “open for business” sign on Asheville’s door is a thorny question.

“If we begin to open the county back up to visitors across the country, I think there’s significant risk of introducing COVID-19 back into the community,” he said. “It’s going to be a challenging question to think through – the timing of opening businesses that are specifically aimed at inviting people here.”

Tourism officials said Asheville’s hotels, normally accustomed to filling 80 to 90 percent of their rooms, are about 15 percent full. Hotelier Himanshu Karvir hopes to see occupancy “creep up to 35, 40 percent” by the end of the year.

Karvir, president and CEO at Virtelle Hospitality, which includes two Holiday Inns and a Comfort Suites hotel, has weathered recessions and downturns, but none like this.

“People have lost their jobs. The disposable income, it’s not going to be there right away,” he said. “Asheville’s always been steady, but this is a very, very different situation. We have not seen anything like this.”

Asheville has one advantage in attracting visitors back. “It’s one of the most desirable places to visit in the United States, and we’re within driving distance of all these large cities,” said Tom Leslie, president of Leslie and Associates, a large property management company. “People don’t have to fly to get here.”

Before the virus hit, Asheville’s tourism had been so successful that it triggered a backlash among some residents who argued that its effects were detrimental to the city and its character, leading to a push to decrease how much tourism officials spent to advertise Asheville to the world.

But tourism will help power Asheville back to vibrancy, just as it did after the recessions in 2001 and 2008, said Tom Tveidt, an Asheville-based research economist with Syneva Economics and a former Asheville Area Chamber of Commerce researcher. “I think we’re going to be heavily reliant on tourism coming back.” 

That could take a year or more, Turner said. “There’s been a lot of angst and criticism directed at the tourism industry as a whole, and I think we’re going to see in the next 12 to 18 months what it’s like to live without that industry.”

Small business struggles

Much of Asheville’s appeal to locals and visitors is its diverse and unique small-business base, one that’s been crippled by the shutdown. 

Bottle Riot, a wine bar in the River Arts District, shifted to curbside sales and home delivery, said co-owner Lauri Nichols. “Our whole business plan changed. I don’t know if we can survive off that model because the landlords now said, ‘OK, we’ll defer that first month.’ The next month, then what?”

The Asheville Chamber of Commerce has organized an emergency fund, One Buncombe, and government assistance is available for laid-off workers and businesses. Still, many fear it won’t be enough.

Raker of Mountain BizWorks estimates 10 to 15 percent of Asheville businesses could ultimately close. “A lot of the businesses we work with are very small, and for these families, the business is their retirement fund, it’s their kids’ college fund. If there’s not the right assistance … they could end up with all kinds of problems.”

Turner worries that as many as 40 percent of Buncombe’s businesses could fail. He said smaller communities such as Weaverville “that were starting to come into their own and become these vibrant communities, I just fear this is going to wipe a lot of them out.”

Gloved servers?

Asheville’s restaurant landscape is being reshaped day by day, as owners close, recalibrate and in some cases reopen again. They’re innovating on the fly, creating new takeout menus, using doorways as temporary take-out windows and building meal kits that are easy to hand off at a safe social distance.

“I don’t know how many restaurants in Asheville are going to make it or not make it,” said Button, the James Beard-nominated chef. “The grim truth is that I don’t know.”

William Dissen, chef-owner of The Market Place, predicts “a much different landscape.”

“I don’t see tourists coming back and spending the way things have been for at least 18 to 24 months,” he said. “The restaurants who survive this will have to be creative and adaptive.”

Joe Scully, chef and co-owner of Chestnut restaurant downtown and Corner Kitchen in Biltmore Village, said he’s been working on what he calls the puzzle of safely reopening. The sit-down restaurants will require a carefully thought-out answer to social distancing, he said.

“We’ve got to find some fundamental ways to set barriers that make people feel safe in restaurants,” Scully said. That could mean masks and gloves for servers, health checks for employees at the start of shifts and remodeling already cramped kitchens to keep back-of-house workers apart.

“The quandary of how we might reopen is really difficult,” Scully said. “I’m not sleeping very well.” 

Taps tempered

Asheville’s reputation as Beer City has been shaken as its 28 craft breweries have laid off staff, closed taprooms and cut production. Those that have remained open cobbled together curbside pick-up options.

Nationally, craft beer sales have dropped an average of 65 percent and hundreds of breweries could close if strict social-distancing measures remain in place for the next couple of months, according to a survey at the end of March by the Brewers Association, a trade group of brewers, suppliers and distributors.

The smallest breweries are at highest risk of closing, according to the survey, but so far there’s no indication of any permanent closures in Asheville.

Asheville Brewing Co. celebrated its 25th anniversary in March, and two days later owner Mike Rangel summoned his staff of more than 145 employees, some who’d been with him 23 of those years, and laid them off.

“I was gutted, distraught,” Rangel said. “I couldn’t talk to anybody for two weeks.”

Rangel is now plotting the way forward, thinking how to pare his business back and create more outdoor options, such as a new patio bar at the brewery’s Coxe Avenue location. Plans are still on to convert the adjacent lot into a new outdoor venue in partnership with The Orange Peel. While planned concerts have been canceled, the open-air space could be crucial in a post-pandemic world and will host events such as outdoor movies and local theater performances.

Derek Allen, an Asheville attorney and expert in craft brewery law and trends, foresees an ever-greater need for beer makers to create safe and convenient systems for customers to order drinks and pick them up or have them delivered. Online sales will be important, while mobile canning operations will stand in high demand.

For now, the most popular new watering hole in Asheville is a virtual one.

“We used to have work meetings over a beer, at a brewery,” Allen said. “The new pub now is the Zoom room, where we get together with our favorite Asheville beer in hand.”

Starving artists

Asheville’s thriving arts scene – its street performers and artists’ studios, community theater and galleries – could be at risk.

“I worry that we’re not going to have as much of that, and that’s something that made Asheville really unique and special,” Turner said. “That was in large part to us being a center for visitation. … We’re also known as a place for second homes, for retirement. We saw a lot of support for the arts come from there, and I think we’re going to see that decline.”

Nichols, the Bottle Riot owner and president of the River Arts District Business Association, said she’s heard of several artists “that will probably not be coming back, which is extremely sad.” 

Sarah Wells Rolland, a potter and owner of the Village Potters Clay Center in the district, is a member of an artists’ business roundtable. “There’s probably 10 of us that are artists, seasoned business people in the arts. Of that group, I think probably half of us are in a pretty precarious situation.”

Wells Rolland has applied for loans and is offering 500 unique pots for a suggested donation. 

Many potters work from home studios, she said. “They’re faced with trying to find a job, the grocery stores are hiring kind of realities. … Nobody is saying this is going to be a disaster, but I do know I have a whole lot of friends that have no idea how they’re going to generate income.”

Wells Rolland sold her work in galleries for many years. “I don’t think galleries are going to survive this. They’re brick and mortars with very high rents and very low profits.”

She predicts the pandemic and its aftermath will “hurt artists really, really badly.”

“I don’t think there will ever be a situation where we lose the arts,” she said, “but I think there’s a good possibility that the River Arts District could change pretty dramatically.”

Quiet in the concert halls

Asheville’s music venues went from booking bands to cutting refund checks for canceled shows.

“It breaks my heart every day,” said Russell Keith, owner of the 25-year-old Grey Eagle, beloved for its shabby warmth and embrace of new artists.

After laying off 25 employees, Keith turned to selling merchandise and gift certificates and now is planning for a post-coronavirus reopening with more outdoor patio shows and forehead thermometers to test people at the door. He’s optimistic about the future.

“Asheville will survive this,” Keith said. “We’ll still be here. We’ll probably lose some iconic places, but the ones that are really focused on the better well-being of the community will be there.”

Isis Music Hall in West Asheville is rebooking the 70 or so shows it has canceled and scheduling new ones for later in the year, said owner Scott Woody. 

“I think probably for the next year, it’s going to be pretty tough for people to come out and congregate,” he said. “There’s a lot of people that are very scared. … I’ve heard other people say, ‘Well, by the time they start lifting this, people are going to be ready to go out.’ ”

He predicts the larger music venues will survive.

“I think everybody in Asheville has to be concerned about falling from being a center where people come and visit,” Woody said. “I think the locals will come out to the music scene, but will we have people coming to Asheville?”

That doesn’t concern Sam Katz, an independent music promoter, who said concerts in Asheville sold out long before tourism took off several years ago.

“This is a music town,” he said. “People in Asheville love to go out, they love to buy concert tickets … so perhaps we’ll get a little break from all the people coming here, and the locals will go out and party like it was 2014.”

Urban retreaters?

Local real estate could remain strong and may even see increased demand from buyers wanting to escape bigger cities after the scare of a pandemic. With the outdoors and beautiful mountains providing plenty of room for physical distancing, Asheville area sales continue to percolate, said Mike Figura of Mosaic Realty.

“I know agents in my office who are doing more business now than they normally do,” he said. “There’s people who are buying properties now sight-unseen based on virtual walk-throughs.”

Figura has seen a dip in new listings. “People don’t want other people walking through their homes right now.”

Still, sellers aren’t slashing prices and interest remains high, including from buyers in metropolitan areas. “We are getting people coming to our website, calling us from Los Angeles, San Francisco, New York and Miami, who want out of those places,” he said. “If you are in a 700-square-foot apartment right now with two other people, and you’ve been trapped there for a month, you can imagine you start fantasizing about open space.”

And unlike during the last recession, caused by a housing bubble, Figura said the market now is stable. “Asheville is still a good deal, even if you’ve lost money in the stock market. If you’re in one of the major metropolitan areas, Asheville still seems cheap.”

Byron Greiner, president of the Land of the Sky Association of Realtors, said he anticipates a slight drop in value in the fall or winter “because we are way overdue for a shift” after several consecutive years of 3 percent growth.

“We’ve been not immune but are much more blessed than other parts of the country in that we’re a desirable area, regardless of the price,” Greiner said. “The effect of the value on real estate hasn’t been anything like it is on our 401(k)s or our investments.”

Homes are being offered for sale “as though nothing ever happened price-wise,” Greiner said.

“We’ve always been a tourism-driven town from turn-of-the-century on and we’ve always been a playground for the wealthy,” he said. “The lure and the desire and the drive to come to Asheville is always going to be there, and tourism is slowly going to recover.”

AVL Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County. Jason Sandford is a reporter and founder of Ashvegas.com; Sally Kestin is a Pulitzer Prize-winning investigative reporter.