Economic impacts to Scottsdale, Paradise Valley unknown as novel coronavirus progresses daily

We won’t receive those reports for a few weeks, so without those facts, we want to avoid speculation on how the coronavirus is affecting Scottsdale’s tourism industry. We anticipate an impact, though we can’t yet say the scope of that impact.”

Stephanie Pressler, Experience Scottsdale director of community affairs

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By Melissa Rosequist
Twitter: @mrosequist_

The local economic impacts of COVID-19 are unknown at this point, community stakeholders say, as tourism comes to a screeching halt across America.

In this time of financial uncertainty when some people are without work and students are without school, community leaders are pulling together to take care of those most vulnerable as the COVID-19 pandemic unfolds.

Nearly every large event, community organization and municipal offering has been postponed in the wake of the national pandemic. Furthermore, school is canceled; employees are being told to stay home; meetings are held remotely and myriad changes are occurring at what seems like a mile-a-minute rate.

“The situation is so fluid it seems to be changing at such a quick pace,” Scottsdale Area Chamber of Commerce President & CEO Mark Stanton said.

“We’re looking at all our stakeholders, working closely with municipal state, and federal guidelines coming out and updates.”

While residents adjust to their new normal in the wake of COVID-19, Scottsdale and Paradise Valley coffers are likely to see a decrease to the influx of tourism-related funds as trips, flights and events are canceled across the world.

Both Scottsdale and Paradise Valley rely on bed-tax funds --- tax collected from hotel room rentals --- in addition to sales tax accrued from annual spring happenings.

“Like many destinations throughout the U.S., we are aware of visitors and meeting groups canceling their trips due to the spread of the coronavirus. Because of the unprecedented nature of this, we are waiting to receive reports from hotel market researcher STR, Inc., to have a more concrete understanding of the impact on Scottsdale-area hotels and resorts,” Experience Scottsdale Director of Community Affairs Stephanie Pressler said.

“We won’t receive those reports for a few weeks, so without those facts, we want to avoid speculation on how the coronavirus is affecting Scottsdale’s tourism industry. We anticipate an impact, though we can’t yet say the scope of that impact.”

Cities across the nation have begun implementing social distancing and quarantine guidelines to elevate the spread of COVID-19 at the request of national and state health officials.

The City of Phoenix on March 17 ordered bars to close, and restaurants to utilize delivery, take-away or drive-thru offerings only.

“Tourism is one of Scottsdale’s largest and most important industries, and this comes during Scottsdale’s high tourism season,” Ms. Pressler said.

“It is a time of year that hundreds of local businesses rely upon for revenue, 28,000 employees rely upon for their livelihoods, and thousands of residents rely upon for critical tax revenue.”

According to Scottsdale City Treasurer Jeff Nichols, Scottsdale’s monthly average for bed tax in fiscal year 2019-20 has been $1,669,831 per month.

Moreover, the monthly average for sales tax that support the General Fund this fiscal year is $11,611,329, numbers provided by Mr. Nichols show.

The sales tax revenues are used to finance the cost of various city services including, but not limited to police, fire, parks, libraries, and streets.

The bed-tax revenues are used for destination marketing to promote tourism and 50% are used for tourism-related event support, tourism research, tourism-related capital projects, and other eligible uses as determined by city ordinance or state law.

In Paradise Valley, municipal financial reports show last fiscal year, $23 million was generated from taxes. For the year, retail and hospitality accounted for $9.2 million, while bed tax garnered $4.8 million.

“I don’t want to forecast,” Mr. Stanton said of the potential detrimental impacts COVID-19 will have on Scottsdale’s economy.

“Right now it’s a real-time update and how we’re managing communication and supporting each other. I know we’re in a very aggressive planning mode for our communication with our members, how we provide updates, how we look to support small business.”

15 Days to Slow the Spread

The extreme precautions come as all 50 states report cases of the coronavirus, and countries around the world experience throngs of infected people.

President Donald Trump has declared a national emergency to address the virus; and Arizona Gov. Doug Ducey has also declared an emergency.

Closer to home, Paradise Valley Mayor Jerry Bien-Willner declared an emergency on March 17, and implemented a plan for public meetings and gatherings.

On March 16, President Trump and the White House Coronavirus Task Force issued new guidelines to help protect American citizens during the global outbreak.

Because of these guidelines, coined “15 Days to Slow the Spread,” people are encouraged to be aware of how their activities can increase the risk of COVID-19 for others, even if you are young or otherwise healthy.

The guidelines include:

• Work or engage in school from home whenever possible;
• Avoid social gatherings in groups of more than 10 people;
• Avoid eating or drinking in bars, restaurants and food courts;
• Avoid discretionary travel, shopping trips and social visits;
• Do not visit nursing homes or retirement or long-term care facilities;
• Practice good hygiene including washing your hands, avoid touching your face and sneezing or coughing into a tissue or inside of your elbow.

As of press time, the Arizona Department of Health Services considers Arizona’s level of community COVID-19 risk as “minimal.”

Maricopa County has 11 confirmed cases of the virus, and zero deaths.

Taking care of employees & clients

However, not all businesses are seeing the sudden loss of work.

Joy Seitz, CEO of American Solar & Roofing, says she is seeing an increase in calls as residents across the Valley become concerned about quarantine.

“Because we provide power plans and safe roofs, customers are now nervous that they need to get their house in order if they’re going to be sitting in it for an extended period of time,” Ms. Seitz said. “People are concerned about power outages, leaks --- and now with winter rains too, a lot more roof leaks are happening.”

Ms. Seitz says the coronavirus is increasing concerns, as prior to the public safety worries a small leak may not have been so critical.

The majority of American Solar & Roofing’s clientele is senior citizens, Ms. Seitz says.

“We are the front line,” Ms. Seitz says. “Maintaining a safe, dry house is critical. My demographic is 60-plus --- they don’t have a nephew to come over and fix it for them.”

For her own staff of nearly 20 people, Ms. Seitz says they are focusing on cleaning standards, and respecting the 6-foot-rule in the office and on project sites.

“I would be lying if I said I didn’t have concerns,” Ms. Seitz said of the impact of COVID-19 on her staff and their families.

“I am actively seeing what’s going on globally, I’m trying to be as thoughtful with that as possible and see what we are doing. If they do go into lockdown, how long are people really staying there? How much do I need in my bank account if I need to support my staff?”

Ms. Seitz also points out the potential of a shelter-in-place rule, like other American cities are implementing, where only emergency personal can go to work. Pointing to a customer she has, Ms. Seitz says she woke up thinking about not being able to help.

“She is a single woman at home with an active leak. She is nervous,” Ms. Seitz said. “When I was really thinking about it, if for some reason we do declare a United States state of emergency, how would I serve her?”

Supporting each other

During this time of uncertainty, the community is pulling together.
Ms. Seitz says as a business leader, it is her job to remain calm.

“Leadership for all levels, elected or not elected, are responsible for remaining calm, providing knowledge and facts as much as possible,” she said.

Mr. Stanton echoed similar sentiments. He said at the Chamber they are receiving calls from organizations asking how they can join and even become sponsors of events.

“It’s reassuring in a lot of ways,” Mr. Stanton said. “What people ultimately know is we have to pull together, support each other, support local businesses, organizations and each other.”

Scottsdale resident and community advocate Denny Brown is one such person who is doing what he can to help others.

“We’re in big conversations about what to do at this juncture,” Mr. Brown said of how to help those in need.

“The kids are good --- we’ve got breakfast and lunch grab-and-go [at the schools]. I’m worried about all of our service-industry folks. The way things are going, I think there could be critical issues there.”

Mr. Brown couldn’t say much more than convey initial talks are in-the-works with local organizations to see what options are available to provide food for others.

“It’s so chaotic,” Mr. Brown said of the current state of his south Scottsdale community. “I know there’s a concern --- there’s no way you could not have fear going on. When you go to the store, go to the grocery store and see empty shelves --- that’s the fear of god.”

Scottsdale Unified School District, who will remain closed until at least Friday, March 27, has set up drive-thru or walk-up means for children ages 1-18 at four campuses. Children do not need to be enrolled or approved for the meals.

The meal sites are available 9:30-11 a.m. at:

• Navajo Elementary: 7501 E. Oak St.;
• Tavan Elementary: 4610 E. Osborn Road;
• Yavapai Elementary: 701 N. Miller Road; and
• Tonalea K-8: 6720 E. Continental Drive.

Hundreds of meals have been provided, SUSD Spokeswoman Amy Bolton said. On March 16, 490 meals were distributed, and 742 meals on March 17.