PORTLAND, Maine — Empty stores, papered-over windows and “closed” signs on doors — some permanent — appear at regular intervals on Congress Street, the retail and commercial thoroughfare running through the heart of Maine’s largest city and economic engine.
During a recent walk down Congress Street, a reporter discovered at least 16 empty first-floor spaces, including the former homes of Mainely Wraps, the Higher Concept Glass Gallery head shop and the recently closed Port City Music Hall. Lease signs dot the landscape where businesses moved out during the pandemic or before it, leaving slow-to-lease spaces behind.
The city has yet to tally the damage in lost taxes or tourist sentiment, a Portland city councilor said, and it could take the development of a coronavirus vaccine to turn things around. If the history of previous economic downturns repeats itself, however, Portland’s downtown will be rejuvenated after the coronavirus is quelled, experts said.
“People like to shop and recreate in places where there are multiple businesses in close proximity,” Adie Tomer, a fellow at the Brookings Institution’s Metropolitan Policy Program, said. “That is a permanent advantage for downtowns all over the country.”
For now, he said closures like those in Portland are playing out in downtowns around the country. With the virus still raging, he said, people are choosing to not go out. That is challenging downtowns.
Still, businesses are trying to get back on their feet. In July, 86 percent of U.S. small businesses said they were either fully or partially open, up from 79 percent in May, according to a MetLife and U.S. Chamber of Commerce poll in July. Most remain concerned about financial hardship from prolonged closures and a little more than half worried about having to permanently close, especially if there is a second wave of coronavirus.
That is showing up in local figures. Of 91 businesses surveyed recently by Portland Buy Local, 58 percent said they were generating 40 percent or less of their typical revenue over the summer.
“Until we have a widely adopted vaccine and this virus is behind us, we’ll continue to see a lot of ‘for lease’ signs on Congress Street and elsewhere,” Justin Lamontagne, partner and broker at NAI The Dunham Group in Portland, said. “I think retailers will come back and certainly restaurants, but in the short term it’s going to get worse before it gets better.”
That’s what happened to Vinland, a restaurant at 593 Congress St. whose owner announced its permanent closure in a Facebook post last Friday. David Levi said his locally sourced restaurant could not withstand the disproportionate impact on fine dining and the economic downturn.
He cooked his last meals on March 15. Gov. Janet Mills ordered restaurants to close indoor dining on March 18, initially for two weeks, and then to keep closed until June 17, though outdoor dining was allowed before then. Capacity limits in retail stores also were raised on June 17.
“I’d hoped for a reopening even as I failed to see the viable path,” he said.
Portland City Councilor Justin Costa, who chairs the city’s economic development committee, said the city has relatively limited resources to help. That includes small amounts of financial assistance through the Portland Development Corp. and the closure of some streets to traffic to help boost restaurant traffic, though that has also deterred some customers who like to park close to where they shop.
Costa said he’s still waiting to see how the closures, recession, virus and federal actions to support businesses will play out. As long as the virus continues to spread, he said, consumer spending is going to be down in record amounts.
“There’s no question that if [federal help] doesn’t happen, the effects could be catastrophic on the city’s economy and the economy of the whole state,” he said. “I don’t think there’s any way to get around or sugarcoat that reality.”
Not all the news is bad. Some empty spaces sport signs saying another tenant is moving in. The former home to Mainely Wraps at 431 Congress St. has a sign saying Flores Salvadoran Restaurant is coming soon. Hazy Hill Farm Made in Maine, a medical marijuana company with two conditional adult-use licenses, plans to move into the space at 484 Congress St. formerly occupied by a Boost Mobile location.
While demand for retail and office space is slowing somewhat, there are still people looking for downtown space. The first floor of the building at 480 Congress St. was for lease before the pandemic broke, but it is now under contract with due diligence being performed on the new tenant, Silas Hatch, a broker at NAI The Dunham Group, said.
Hatch said many different factors play into leasing, including whether a client really wants the location, which was a factor in the 480 Congress St. lease, and whether or not the city will grant a permit for a different use of a building.
Venues like Port City Music Hall, a large and specialized space for concerts, will likely have difficulty getting new tenants because crowd restrictions make it hard to put on shows, Hatch said. Buildings outfitted for restaurants may also face a challenge. Hatch said he normally has up to a dozen restaurants looking for space, but there are none now.
On the upside, rents may drop a little, and some businesses may be able to take advantage of that, he said.
Cary Tyson, executive director of Portland Downtown, a nonprofit focused on improving the city’s downtown area, remained optimistic despite counting 13 businesses that already have closed throughout downtown Portland during the pandemic, citing agreements between neighboring businesses to allow restaurants to use more outdoor space.
“I’ve seen some good collaboration come out of this situation,” he said.
He recognized, though, that there is less opportunity for people to go downtowns spontaneously for coffee or dinner. Those ripple effects could remain for a long time.
“You’re not making that trip so you’re not stopping and buying that book you’ve had your eye on or seeing the ‘sale’ sign in a store and buying that shirt or pair of shoes,” he said.