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Lonsdale City Hall remains open with little traffic during the coronavirus outbreak. Many area businesses have remained open for now, but the owners ask customers to practice social distancing while other facilities ask customers to make transactions online or via drop box. (News Review file photo)

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Bar, restaurant closures send shockwaves throughout the region

Gov. Tim Walz announced one of the state’s most significant efforts yet to curb the spread of coronavirus Monday, March 16, ordering restaurants, bars, gyms, movie theaters and other “places of public amusement” to close by Tuesday afternoon.

In a press conference, the governor cast the decision as a difficult but necessary “new normal,” in light of the Centers for Disease Control and Prevention’s recommendation that Americans avoid restaurants and bars and limit social gatherings to 10 people or fewer. Under the governor’s executive order, delivery and curbside takeout orders will still be allowed. Grocery stores, convenience stores and pharmacies are specifically exempted from the order.

Across the region, restaurants owners and employees were left reeling by the loss of much or all of their business for an indeterminate period of time, even before the governor’s order. Though the executive order is in effect until March 27, there appears to be a general expectation that it will only be extended until an unknown amount of time.

In Lonsdale, Whistle Stop Tavern and Grill owners Terry and Mary Lu Bastyr have been offering takeout meals to customers between 4 and 8 p.m. since Walz announced restaurant and bar closures.

Although the first day was slow, Terry said Wednesday was better as far as customer turnout. He and Mary Lu are thankful for the support of their loyal customers. Keeping up with maintenance and doing plenty of cleaning, they’re limiting exposure as much as they can with only the two of them on staff. On Thursday, Terry said they may ask other workers to assist over the weekend.

“A lot of the customers who come in are thankful we are open, giving us a lot of kind words and support, and we really appreciate that,” said Terry.

Still, he said, “It’s going to be tough for a while.”

New business model

At his Monday press conference, Walz said that the pandemic is only beginning and he expects the closures to last longer than the current order states. For Montgomery Pizzeria 201 owner Troy Domine, the virus has forced him to change his entire business model.

What once was a bustling dining area was converted into a pizza delivery and curbside pickup business on Sunday, March 15. Domine made the change days before Walz enacted the new executive order barring restaurants from holding dine-in service.

“We felt this is a gathering spot,” said Domine on why he made the change. “We get a lot of traffic in and out every week, and we felt this is the role we could play in making a statement that this is important. We should all do what we can to slow this down.”

To make up for lost business, Pizzeria 201 has greatly expanded its hours and its delivery service beyond Montgomery to most all of Le Sueur County, north to Jordan and east to Kilkenny and Shieldsville.

The restaurant also implemented a pickup station outside the restaurant on certain hours each day. Additional weekly specials like home baked mac and cheese, BBQ ribs and enchiladas are being put on the menu to keep interest up.

“It’s not business as usual anymore,” said Domine. “We woke up in an entirely new market.”

The pizzeria is still keeping things together, albeit with a third of the regular staff. The skeleton crew is comprised of all of the restaurant’s full-time workers, some part-timers and family members of Domine’s. However, once the pandemic has reached its end, Domine plans to bring back the rest of his staff.

The shutdown has hit Owatonna particularly hard. Across the city, roughly 70 businesses are being directly impacted by the governor’s recent executive order, including Old Town Bagels, one of the most popular places to eat in the downtown district.

On a typical day, hungry patrons begin to fill the downtown storefront the moment it opens its doors at 6:30 a.m. By the time lunch arrives, the building is packed with customers, with a lingering crew up until its 4 p.m. close. Tuesday was much different. The absence of customers couldn’t be ignored as the owners Stacy and Mark Wilson began to prepare for what will now be their new normal.

“We kind of all saw it coming and we know it needs to be done,” Stacy Wilson said. “I do believe that we are positioned a little better with online ordering already being available, and I am sure we will see a drop in business, but it’s going to be a process as we learn how to mitigate this new normal we are in.”

The ripple effect of the executive order reaches far beyond the businesses themselves, putting almost an entire industry of workers out of a job and without a paycheck.

“I think we all are concerned about how the economy is going to react to this,” said Brad Meier, president of the Owatonna Area Chamber of Commerce and Tourism. “People will be a little tighter to the vest with their money and that always impacts things. That’s a reality that we’re worried about.”

The Wilsons said that our of their 12 staff members, only three of them have a second job outside of the bagel shop. While the store is planning to stay open to accommodate pick-up and deliveries, hours of operation will be cut, as will labor.

“Our staff is a great concern, we don’t want to put them out of work,” Stacy Wilson explained. “But the restaurant industry is a cash-flow business, if there is no cash coming in that is going to trickle down.”

The Wilsons estimated that for now the staff will lost about 30% of their hours at work, and that they had offered everyone the option to be taken off the schedule for now if they did not feel comfortable coming in, knowing that filing for unemployment would then be an option. Unemployment, however, isn’t a perfect solution as it only covers about 50% of an employee’s wages.

“It is very overwhelming, a lot of people here this is their only job and their whole livelihood,” said Torey Statlander, owner of Torey’s Restaurant and Bar in downtown Owatonna. “With no income and no paychecks, people are going to be scraping by to pay some bills and just to put food on the table.”

Statlander said that his staff is his number one priority, but during the mandated closures the restaurant will also be forced to significantly cut back on labor as they provide takeout orders for the next two weeks. For some other businesses, specifically bars that do not serve food, the only option is to lock up completely until the restriction is lifted.

“This is going to affect every business as people are afraid to go out of their homes,” Statlander added. “We need to support any local business that we can, we’re all just trying to make a living.”

Northfield restaurant owners also said that they, too, have seen a drastic decrease in customers in recent days and that the governor’s order has only confirmed their worst fears about how the pandemic might play out for them.

“It’s very scary,” said the Hideaway Coffee House and Winebar owner Joan Spaulding. “This is how employees are supporting their families.”

Spaulding hopes customers will place orders online and over the phone in light of the virus, but thus far delivery hasn’t made up for the cafe’s dine-in losses. James Gang Coffeehouse and Eatery has mostly made up for their losses with online ordering and its drive-thru service, said owner Tanya Mollenhauer.

Northfield’s plethora of bars — Froggy Bottoms, the Contented Cow, Reunion and others will also close. Smoqehouse saw around half of its business vanish over the past few days, said manager Nicholas Bauernfeind. Business has slowed for Hogan Brothers’ Acoustic Cafe as well, said owner Greg Heymans.

Smart move or prelude to an economic nightmare?

Walz’s decision drew criticism from some state legislators, who argued that its impact on local small businesses would be excessive. Others expressed concern as to whether the governor should be allowed to make such a massive decision unilaterally.

“I sincerely, sincerely hope the governor will reconsider his decision to close down most private businesses – including, but definitely not limited to, bars and restaurants,” said Sen. John Jasinski, R-Faribault, in a prepared statement. “These small businesses are the backbone of our state’s economy. Many of them have high overhead and low margins. Ordering them to close, even for two weeks, will have a disastrous effect not just on our economy, but on thousands of hourly wage earners and small business owners.”

Rep. Jeremy Munson, R-Lake Crystal, also expressed concern over the governor’s decision. Munson said that given the uncertainty over just how long coronavirus might be here to stay, the governor’s decision could have significant economic effects.

“I think that it was overreach by the governor to implement such broad restrictions on private businesses,” he added. “I know that a lot of businesses were already taking precautions.”

Other legislators were more measured in their reactions. Rep. John Petersburg, R-Waseca, said that he’s heard from business owners who are concerned about their livelihoods and understands those concerns, but believes that significant action is needed to stop the spread of coronavirus.

“The governor’s decisions seem to be based on decisions in other places that seem to have helped,” he said. “This is spreading very fast and we’re assuming it will spread much wider than it already has.”

Rep. Todd Lippert, DFL-Northfield, said he agreed that the temporary closure of businesses is difficult but necessary, and was glad to see the governor accompany the order with additional protections for potentially displaced workers.

To help workers who may be displaced by the new policy, governor also signed a separate order making it easier to get unemployment insurance. Workers were asked to apply online for benefits, given the expectation that the state’s phone lines will be overwhelmed.

“It’s a very difficult decision, and the governor was clear about that, but we must do everything we can to stop the spread of COVID-19,” he said. “People are still congregating and putting themselves into situations where the virus can spread, and we have to do everything we can to save lives.”

Several other states have already implemented similar measures, including California, New York, Illinois and Ohio. With concerns that large crowds might congregate on Tuesday to celebrate St. Patrick’s Day, public health authorities urged immediate action.

‘This is what we need to do’

It is unclear how COVID-19 will impact establishments that don’t rely on dine-in service. With the exception of their sanitation products flying off the shelves, nothing has changed for Ziggy’s in Northfield, said cashier Theresa Kopp.

While the Brick Oven Bakery’s cafe in the college city has been “very quiet,” bakery sales have boomed. But owner Dean Christensen is worried that could soon end, as it’s possible customers have been stockpiling bread to freeze before they retire to their homes to wait out the virus.

In Waseca, Oscar’s All-American Food and Drinks owner Oscar Marquez worried that several bars and restaurants might not reopen if the closure extends beyond the March 27 deadline. Marquez and his wife, Maria, own five restaurants and employ around 60.

They said they’ll continue to operate Oscar’s and use a pickup window to serve food In the meantime, they’re still deciding on what to do with inventory that has an expiration date and what to tell staff.

“I told my wife when we see a tornado coming, we know to go the opposite direction,” Oscar said. “We don’t know where we need to go.”

Todd Schmidt, owner of the Boxcar Bar and Lindner Liquor in Waseca said his phone is ringing off the hook with panicked customers and staff. Schmidt said that he still needs time to process what the closures will mean for him and his employees.

“If this is what we need to do, then this is what we need to do,” Schmidt said. “It hasn’t hit yet. Reality will hit when I lock up the doors.”

Board signs off on Bagley Ave. project

<&firstgraph>Rice County’s Board of Commissioners has signed off on plans to reconstruct a stretch of County Road 46 north of Millersburg, providing a potential boost to regional economic development.

<&firstgraph>The portion of highway, often referred to as Bagley Avenue, is approximately 2.8 miles long and extends from County Road 1 to the Flying J Travel Center at the intersection with Hwy. 19. It is directly west of I-35 and serves as a de facto frontage road.

<&firstgraph>The project is one half of the marquee I-35 frontage road reconstruction project that will dominate the county’s road budget for 2020. On the east side of I-35, the county will spend $3.6 million to grade and drain a 2.3 mile stretch of County Road 76/Base Line Road. That portion of road extends from the highway’s intersection with County Road 1 to its intersection with County Road 8. Unlike the Hwy. 46 project, the Hwy. 76 project will extend into 2021, giving it a higher overall cost but reducing its impact on the 2020 budget.

<&firstgraph>Still, both projects were expected to put a major dent in the county’s 2020 budget. At the same time, commissioners held a tough line against what they saw as an excessive proposed levy increase for 2020, forcing the county to cut its road budget.

<&firstgraph>About two-thirds of the Hwy. 46 project and half of this year’s portion of the Hwy. 76 project were covered by state aid dollars. But with a reduced road budget, the board was forced to borrow nearly $1 million from its 2021 state aid in order to afford both projects.

<&firstgraph>That might no longer be necessary now that the low bid for the Hwy. 46 project, from Kasson-based Swenke Ims Contracting, has come in more than $1 million under budget. Commissioners expressed relief at the affordability of the low bid.

“It’s always good when we come in under budget,” said Commissioner Jake Gillen. “Some of the budgets don’t start out so well on the front end.”

Given the area’s ease of access to I-35 and the Twin Cities metropolitan area, the county has long eyed the frontage roads as prime locations for industrial development. Those efforts could see an extra boost from an improved interchange proposed for the west side I-35 and Hwy. 19.

<&firstgraph>Last month, the Minnesota Department of Public Safety completed a traffic safety report on that interchange. As the main point of access to Northfield from I-35, it is already one of the most well traveled in Rice County. Based on traffic flow and projections, officials concluded that the best approach would be to install a six way-roundabout. Exit and entrance ramps to I-35, Hwy. 19 and area frontage roads would be included.

<&firstgraph>However, that project likely remains a ways off in the future. County Engineer Dennis Luebbe has cautioned that given the analyses and planning that needs to take place, construction would be unlikely to break ground for at least five years.

<&firstgraph>The county has also discussed a possible interchange at the intersection of Highway 9 and I-35. That proposed project, at the north end of Faribault, could help east traffic at the intersection of I-35 and County Road 21, currently the city’s busiest. That project was first proposed more than a decade ago, as a way to make I-35 more accessible for industrial companies wanting to locate north of Faribault. However, city staff has recommended development near the intersection of I-35 and Hwy. 60 on the southwest side of town be a priority.

<&firstgraph>Efforts to gain state backing for the interchange project have struggled to get traction in recent years. However, the county Board’s Transportation Committee signed off on a proposal to conduct a comprehensive analysis of the proposal, sending it to the full board for approval.

<&firstgraph>Faribault’s City Council will discuss the proposal at its work session on Tuesday evening, according to a preliminary agenda released on Friday. However, as with the improved interchange at I-35 and Hwy. 19, construction is likely a ways off.

<&firstgraph>According to Luebbe, any interchange would require years of lobbying and millions in funding, pushing the likely completion date at least a decade and a half out. Even the comprehensive evaluation backed by the county is likely to take 16 to 22 months.

As of March 16, 54 positive coronavirus cases were reported in Minnesota, up from 35 on Sunday. At least 13 counties have reported cases, including Waseca and Blue Earth counties. (Photo courtesy of Metro Creative Images)