Tech gives, tech takes awaySeptember 20, 2020
It’s a warm Friday afternoon at a Mountain View sports pub just a stone’s throw from several Google offices, and tables inside and out should be filled with people celebrating the end of the workweek. But the long barroom with seating for 80 is closed by coronavirus regulations, and on the outdoor patio — despite efforts to draw people in — there are just a dozen customers drinking and eating in a space for more than 200.
In this city with an economy heavily dependent on the technology industry’s army of daytime workers, thousands of whom are typically bused in by their employers, the shift to remote work is wreaking financial havoc across a broad swath of Mountain View businesses even as the city’s biggest employer contributes new revenue and pandemic assistance.
“We’re surrounded by Google here, and Microsoft is just over there. A lot of small companies as well,” says Jackie Graham, who has owned The Sports Page with her husband, Rob, for 28 years. “We used to be busy nearly every day because of the surrounding companies.”
Now, the Grahams have pulled the net from the sand volleyball court and ringed the expanse with socially distanced picnic tables plucked from the patio, where they’ve mounted three giant-screen TVs along the rear fence “just to try to bring some people in,” Graham says.
The Sports Page has kept its five bartenders but at dramatically reduced hours. Graham estimates revenue has cratered 70% from pre-pandemic times.
Elsewhere in the city of 83,000, where the most recent census data from 2012 showed annual retail sales topping $1 billion and hotel and food services bringing in nearly $300 million a year, shops, hotels and restaurants are largely deserted. Even when closed-off Castro Street gets lively in the evening, spacing mandates put a heavy damper on the numbers of diners and drinkers. Cities throughout the Bay Area, from Walnut Creek to Pleasanton to Cupertino, are facing similar challenges.
But Mountain View, whose largest employer has enough workers to fill a small city of its own, is experiencing a few benefits that other cities aren’t — even when the offices and campuses of that employer and others are mostly empty.
“It is a double-edged sword,” says city manager Kimbra McCarthy. Without the eating, drinking or shopping of tens of thousands of tech workers, many of whom live outside the city, Mountain View has taken a big hit on sales tax revenue. Hotel-tax revenue has plummeted, too.
But in a region that’s one of the nation’s most expensive real estate markets, property taxes remain the top revenue source. City-owned property delivers another $21 million annually, with Google the largest tenant.
Plus, the city this year has new revenue from business: Mountain View’s per-employee tax went into effect January 1. Google, the city’s largest employer with 23,000 workers in its headquarters complex, is expected to pay more than half of the annual $6 million to be raised.
“A lot of cities don’t have that revenue base so sales tax would perhaps play more prominently in their revenue source,” McCarthy says.
The temporary closure of Castro Street, an experiment many other cities are replicating to provide more space for outdoor dining, is providing a lifeline for restaurants but is far from a cure for their COVID-19 ills. On a recent Monday at lunchtime, a few people were scattered among the restaurant tables arranged on the roadway. Last year, restaurants would have been packed.
“We barely get customers,” says Rabi Sharma, a supervisor and server at Quality Bourbons and Barbecue, which has slashed drink prices by a third and food prices 10%. “I have two tables and I just wander around.”
Up the street at novelties shop Therapy Stores, foot traffic has plunged during the street closure, which the city may extend till the end of the year. Though online sales are up, this store is the biggest income generator in the family-owned Bay Area chain, and relied heavily on the city’s biggest industry, said assistant manager Morgan Guidry.
“We would get so much Google traffic, so much tech traffic,” Guidry said. “Even the smaller tech companies, we would get traffic from them.”
Business is down about 27%, and staff hours have been halved, she said.
Still, the city’s flashiest street, Chamber of Commerce CEO Peter Katz is quick to point out, “is not all of Mountain View.”
In a strip mall along El Camino Real, dozens of violins hang from racks at Sono Strings, and larger stringed instruments lean against the walls. Most sales and rentals have become impossible even with curbside pickup because the instruments must be sized in person.
“You can’t do business if you’re not open,” says co-owner Connie Tse, 51, sporting a “Viola Vampire” t-shirt.
About 80% of the shop’s customers work in tech, co-owner Jason Yoon, 34, estimated. Like others in the city’s small business community, Tse cited the challenge of struggling through the pandemic in a city with “tremendously high” commercial rents.
Mayor Margaret Abe-Koga emphasized that the city is running a micro-loan program that has provided funds to about 100 businesses so far.
Tse and her partners said they have not received city assistance. Of the $900,000 fund, $400,000 came from Google after it canceled its annual developers conference because of the virus.
The company has provided more than $1 million in aid in various forms to help Mountain View businesses and residents weather the pandemic, spokesman Michael Appel says. Sunnyvale-headquartered LinkedIn has donated $100,000 to help Mountain View small businesses.
Over the years, the tech industry’s contributions to Mountain View, along with other strong revenue sources, have pushed the city into a relatively favorable position for troubled times, Abe-Koga says.
“We’ve always put away money for rainy days,” Abe-Koga says. “That’s all coming into play now in keeping us afloat.”
Tech companies have kept many of their Mountain View workers employed, albeit remotely, which has helped keep the city’s unemployment rate down to 6%, Abe-Koga said.
But the chamber’s Katz worries that many of the tech workers who patronized local businesses will be gone for some time. Google is taking what its CEO called a “slow, deliberate, and incremental” approach and says its employees can work from home through at least next June.
“I’m more worried now than I was before because it’s been lasting so much longer than I think many people anticipated,” Katz said. “And I don’t see a strong path ahead.”
Abe-Koga said she’s troubled by growing numbers of empty storefronts and “for lease” signs on commercial offices, including an entire 10-story building on El Camino Real. “I haven’t seen something like that since the last recession,” she said.