Downtown Wilkes-Barre working to adapt to ‘new normal’

WILKES-BARRE — Earlier this week, La Tolteca Bar & Grill opened on Public Square with a five-piece mariachi band playing as customers filled the new restaurant.

Across Public Square, Mark Bronsburg’s Mimmo’s Pizza was not so busy, as he continues to struggle to stay in business after two years of coping with the COVID-19 pandemic.

For a day when the weather was pretty mild, you would expect to see more downtown workers bustling to downtown restaurants to grab lunch and hustle back for the afternoon shift.

But with many of those workers now working from home, or “anywhere,” that daily downtown pedestrian traffic has been dramatically reduced, resulting in some businesses closing or on the verge and downtown stewards searching for ways to adjust to what has been called “the new normal.”

Two of the biggest employers in the downtown are Highmark Blue Cross/Blue Shield on North Main Street, and Berkshire Hathaway GUARD on Public Square. Together they employ more than 1,200 people who many, prior to the pandemic, spent their lunch hour and money at downtown restaurants and businesses. But since COVID hit, nearly all of those workers have been working from home, taking away much of the daily business that restaurants like Mimmo’s, Rodano’s, Circles on the Square, and others have relied on for years.

Finding the new normal

So what is the solution?

Larry Newman, executive director at Diamond City partnership, says, “We still don’t know what the ‘new normal’ is going to be.” Newman said that it appears that we are approaching the beginning of the end of the pandemic, but he acknowledges that it remains unknown just what that will mean. He expects a gradual return of some of the workers to downtown, but he quickly adds that he doen’t expect it to soon return to what it was like pre-pandemic.

“Offices will have less people,” he said. “Businesses, in turn, will need less space.”

Before the pandemic, Newman said there were 11,300 people working in the downtown — in the geographic area defined as North Street to Academy Street and the railroad tracks to the river. Now, Newman said, there are 3,500 people working downtown.

Brian J. Rinker is Market President for the Eastern Pennsylvania region of Highmark Inc. This includes oversight of Highmark Blue Cross Blue Shield in the Northeastern Pennsylvania market and Highmark Blue Shield in the Central Pennsylvania market.

Rinker said the challenge is how many of those 8,000 missing downtown workers will return.

“All we can say is that it will be greater than two and less than 8,000,” Rinker said. “We don’t see employees working downtown five days a week. We can see some coming in two, three or four days per month for now.”

Highmark announced last month that the 500-plus employees at the North Main Street building — just around the corner from Mimmo’s — will not be returning to the building to work anytime soon. Anthony Matrisciano, Corporate Communications spokesperson for Highmark Health, said the company is now a “work from anywhere company.”

“So there is no specific plan in place to bring employees back to the Wilkes-Barre office at a certain time,” Matrisciano said. “Employees currently have the option to work from the office in Wilkes-Barre when needed by following certain protocols, such masking, social distancing, frequent hand-washing, etc.”

Contrasting trends

Like every central business district, Newman said Downtown Wilkes-Barre has been seriously affected by economic fallout from the COVID-19 pandemic. He said visitor foot traffic plummeted in March 2020 and has only gradually improved over time. Total visits in 2020 were 35% lower than in 2019.

However, Newman said while many in-person events remain curtailed, visitation trends have been going in the right direction: Overall 2021 downtown visitor traffic was 26% higher than in 2020.

But the real challenge facing Downtown Wilkes-Barre remains the impact of remote work.

“Non-work visitation is improving, college students have returned, and residents never left, but the absence of workers continues to create real problems for downtown’s storefront businesses,” Newman said. “This was most recently evidenced by the January 2022 closures of Bronco’s Vault Brazilian Steakhouse and City Market.”

At the same time, Newman said patrons have slowly been returning to downtown restaurants and retailers. Real-time data aggregating customer traffic at 11 different downtown restaurants shows that visitation did improve from January through December 2021. However, overall 2021 traffic to these restaurants was only 68% of 2019 levels.

‘Pillars’ affected

While official business capacity restrictions have been lifted for some time, Newman said most of downtown’s storefront businesses — restaurants, retailers, and personal services — have continued to weather substantial declines in business compared to pre-pandemic conditions.

Newman explains why.

In recent years, the downtown economy has been supported by five primary pillars: office employment; the colleges; arts, entertainment, and hospitality; retail; and downtown residents.

“However, after the shutdowns hit Downtown in March 2020, only the residents remained,” Newman said.

Over time, the other sectors began to return: First, the business closures were lifted; then the college campuses reopened, and finally, dining restrictions and measures in other sectors were lifted at the beginning of the year.

“However, downtown office occupancy remains very low, because most workers are still not back in the office,” Newman said.

Early in 2021, we had been hopeful that, as vaccination rates increased, more businesses would begin returning to the office this summer — and in fact, that began to occur with several of our major office employers.

“However, that was reversed by the rise of the Delta variant — some office employers that had returned to in-person work several days a week have now shifted back to a default remote-work mode,” Newman said. “And, that has big consequences for businesses that rely on office workers.”

For example, in July of 2021, Newman said visitation to downtown dining establishments was half of what it had been in July of 2019.

“That’s certainly better than where things stood in January of 2021 — when downtown dining visits were down by 90% from January of 2020 — but the pain continues to be substantial,” Newman said.

Similarly, Newman noted that Downtown’s entertainment anchors — such as the F.M. Kirby Center or Movies 14 — have been able to restart their venues during the past few months, but that progress was under threat from the recent rising case count.

The good news, Newman said, is that King’s College, Wilkes University, and LCCC are all committed to ensuring safe, in-person instruction and residential life this semester — because their campuses are critically important to the downtown economy.

“Like the entertainment sector, neither the schools nor the businesses that depend upon them can afford to go backwards,” he said.

Residential bright spot

The brightest spot has been Downtown’s residential market, which has continued to be incredibly strong.

“That was true during the worst days of the shutdown — and it continues today, with high leasing demand and the announcement of several new residential conversions during the past few weeks,” Newman said.

Additionally, in 2020, DCP and many other entities have used the warm weather to advantage, creating or reintroducing a whole range of outdoor events that have helped to reanimate Downtown.

“The public has responded,” Newman said. “We’ve been thrilled with the attendance at outdoor concerts like Sunsets on South Main, Rockin’ the River, and Out Back at Karl Hall, to outdoor activities like the Riverfront Yoga Project and Y Walk Wednesdays,and to Public Square events like the Fine Arts Fiesta, Farmers Market, and Cruisin’ the Square. As we shift toward the fall, more events are on the way.”

Newman said while there have been seven downtown business closures since the start of 2021, there also have been six new tenants in downtown storefronts during that same period.

“We’re inspired by our business owners’ creativity and resilience,” Newman said. “They’ve created new outdoor dining spaces; developed new online channels to reach customers, pursued available assistance programs, and built new marketing partnerships. But, they can’t be expected to hold on indefinitely.”

Here’s the reality: Newman said the downtown economy is highly inter-connected — one segment reinforces another. And, when a segment of the downtown economy disappears, it impacts everything else.

“That’s why if it can be done without compromising public health, we are anxious to avoid additional business restrictions and closures if at all possible,” Newman said. “And, that’s why, given the challenging circumstances, DCP intends to continue to support Downtown businesses with resources, advocacy, and assistance; create outdoor events to activate Downtown at street level; and work to make Downtown a place where people want to be.”

Entrepreneurial activity

Newman also said that he expects some entrepreneurial activity to occur. He said employees working from home sometimes want to “get out of the house” and they look fora place where they can work. Some have used coffee shops and restaurants as landing spots.

Newman said some of the downtown office space can be re-purposed to rent to people to set up work spaces. He said there could be locations where people could set-up and work with privacy and without interruption. Newman said several people could work out of the same building with each of them working for different employers.

“If a person is looking for a place to park themselves and do business, there are places in Downtown Wilkes-Barre available,” Newman said.

Rinker said he has not seen any drop-off in productivity with employees working from home. He said video-conferencing has also been key in keeping in touch and allowing co-workers to stay connected to their colleagues.

And there was some good news recently — Berkshire Hathaway GUARD workers will be returning to the office to work on Public Square.

Elizabeth Hartman, Vice President of Marketing & Communications at Berkshire Hathaway GUARD Insurance Companies, said about 750 employees in Wilkes-Barre will be returning to their offices beginning March 14.

Newman said the reality of doing business in a pandemic is that new approaches and practices will have to be found.

“We will have to address these as we move forward,” Newman said. “While the move to remote working is going to start to swing back and as the pandemic continues to recede, we also must realize that we are never going to snap back to where it was in February 2020. Downtown business have relied on the traditional downtown worker. Now we will have to adapt to this new reality and that is going to be a challenge.”