Last year, it was the Swan Lake Fire. This year, it was the COVID-19 pandemic. For the past two years, local businesses on the Kenai Peninsula have had to deal with disappointing summer seasons that saw relatively little business from tourists and Alaskans alike when compared to past seasons.
The businesses that have survived up to this point have done so through a combination of individual resourcefulness, financial assistance from government entities and support from their local communities.
The Clarion spoke to six business owners who operate on the Kenai Peninsula from Seldovia to Cooper Landing in a variety of industries about the unique challenges they’ve faced in 2020, how they’ve adapted and how they’re feeling about the future.
The early months
Shirley Wilmoth, owner of the Hutch Bed and Breakfast in Cooper Landing for the past 17 years, was still on vacation with her fiance, George Anderson, at the beginning of the year. Wilmoth and Anderson were looking at a full calendar of reservations for the summer months, but when she and Anderson returned to Alaska in February, news of the novel coronavirus and a potential pandemic was starting to hit home.
Wilmoth said that in the month of March, as Alaska began to respond to outbreaks within the state and implement closures of nonessential businesses, her phone line was eerily quiet.
“It was like the phone company had shut off our phone lines that month,” Wilmoth said.
Where March was quiet, April saw Wilmoth’s phone ringing off the hook — but not in a good way. People were calling left and right to cancel the reservations they had made for the summer, Wilmoth said. By that time, travel restrictions were in effect and out-of-staters were required to quarantine for 14 days upon arrival in the state.
“When people plan a 10-day vacation to Alaska and then all of a sudden they have to quarantine for 14 days, it’s just not worth it,” Wilmoth said. “By the end of May we lost every international booking, including a group of French gentlemen that have come every year for the past 20 years.”
Meanwhile, in Seldovia, Paulie Carluccio was having a similar experience with the Central Suites of Seldovia, which she has run since 2006. Carluccio said that her lodge is one of a handful that operate in the winter months, so she had a full calendar of reservations in February. For March, she had two reservations. In April and May, there were none.
Paul Warner, who owns and operates The Supper Club in Ninilchik, was also on vacation in January and was looking at a summer full of reservations for his business, which offers high-end, multi-course, custom meals for up to 12 guests at a time. Warner left France about a week before that country shut down due to the coronavirus, and it wasn’t long after he returned to Alaska that all of his reservations ended up canceling.
Businesses directly and indirectly related to the tourism and hospitality industries have been hit especially hard by the financial impacts of the pandemic, because travel in and out of the state was heavily restricted this summer. Tom Stroozas, who prints an annual hospitality and dining guide called America’s Cuisine, said that he printed 16,000 copies of the 2020 edition of his magazine this year, but only had one opportunity to distribute those to his clients before the pandemic hit. Normally he distributes in February, May and September to his 30 clients, but as of September he was still sitting on about 10,000 copies.
Steve Beeson, owner of Beemuns Variety Bike and Ski Loft, said that he was concerned when his business and others had to shut down following mandates implemented by the state in March. After about a week, however, Beeson got approval from the state to reopen as an essential business.
“Bicycles, bike repair and office supplies are considered an essential business, so because of some of those things we were able to reopen,” Beeson said. “So we never really had an issue. We were closed for eight days or so and after that, we were up and going again.”
Nick Miller, who has owned and operated Nick’s Ironworks in Kenai for 41 years, was convinced in the early months that Alaska wouldn’t be hit too hard by the pandemic. It wasn’t until the end of March and the beginning of April that he began to feel a sense of uncertainty, when the jobs he had lined up started getting delayed.
Miller said that many contractors like himself tend to line up one or two major jobs a year, which he called an “anchor,” that give them a financial cushion for the rest of the year. For Miller, his anchor project this year was with a client from Utah, so when the client was unable to travel to Alaska, the job fell through. Miller had already invested in equipment upgrades for that project, so at that point he was looking for another way to recoup those losses.
The state steps in
At the end of May, Alaska’s legislature approved a plan to use $290 million in CARES Acts funds for small business relief grants to assist the businesses that had already started to feel the impacts of the pandemic. The grant offered up to $100,000 for each applicant and could be used to cover expenses or make up for lost income. Because of the initial eligibility criteria, however, the money was slow to get out. By June 30, only $6 million of the $290 million program had been distributed across the state, and just over $1 million of that had reached the peninsula.
Carluccio said that she applied for the state grant on the first day that the window was open, but didn’t hear anything back for a month. Tired of waiting to hear if she would be receiving assistance, Carluccio reached out to Tim Dillon, executive director of the Kenai Peninsula Economic Development District, to see if he could help. Dillon and Caitlin Coreson, programs manager at KPEDD, have spent the past several months assisting peninsula-based business owners in applying for financial assistance on the federal, state and local levels.
Dillon told Carluccio that he would look into her application, and within a few days, she heard back from Credit Union 1 and learned that she had been approved for assistance. Two weeks later, she received a check from the state, which she said she used to cover many of the regular monthly payments that she was unable to pay due to the lack of business.
Warner was rejected when he first applied for state assistance, because the application required an active Alaska business license, and Warner uses a liquor license for his supper club. Dillon helped Warner obtain a business license that would be accepted by the state, and after a few months, Warner received a check for $14,000.
“I needed the money four months ago, so it was a little bit of robbing Peter to pay Paul,” Warner said. “But it was really nice to be saved. I’m OK for now. This time next year, who knows?”
Beeson said that, because of locals continuing to shop at Beemuns throughout the summer, he never felt the need to apply for assistance.
“I knew a lot of people that did, but we were in the position where we didn’t have to have it, so why should I take money that we didn’t have to have?” Beeson said. “And again, I’m really thankful to the customers that shopped us, because that makes a big difference for the local guys. We really appreciate that.”
Similarly, Miller said that he only applied for enough state assistance to cover the costs of the equipment upgrades he had already made. Miller said he also got assistance from Dillon after reading an article in the Clarion about what KPEDD was doing to help small businesses in the area.
“In my 41 years of business I’ve never just been given money like that, so I didn’t want to get greedy,” Miller said. “I didn’t go for the whole enchilada.”
Wilmoth was already drawing from her savings to cover the costs at the Hutch for April, May and June, when Dillon visited Cooper Landing to give a presentation on the AK CARES grant program to local business owners. Wilmoth hosted Dillon and about 30 other Cooper Landing business owners at the Hutch on June 3, and by June 10 Wilmoth had submitted her grant application.
“I wanted to make sure it was in before fishing season,” Wilmoth said. “I wasn’t sure if I’d have the time once that started.”
While waiting to hear about state assistance, Wilmoth heard from Brenda Ahlberg with the Kenai Peninsula Borough about the borough’s small business grants that were newly available. After a much easier application process, Wilmoth said she received confirmation from the borough within about five days.
Eventually, Wilmoth received $1,800 from the borough and just over $50,000 from the state, which she put toward mortgage and utilities payments, as well as all the cleaning supplies and PPE she had purchased ahead of time.
“It was lifesaving,” Wilmoth said. “We are not going to be whole, but we’ll be OK.”
In addition to assisting local businesses in receiving the funds, Dillon and others worked throughout the summer to push the state to expand its eligibility for the AK CARES program. Eventually Dillon’s recommendations were implemented, and the program was opened to commercial fishermen, nonprofits and businesses that had already received federal assistance. As of Sept. 29, Dillon said that 3,099 applications had been approved for over $128 million in assistance from the state.
That includes 526 applications from the Kenai Peninsula Borough, totaling over $21 million. Dillon said the average amount of assistance peninsula-based businesses have received from the state is about $40,100.
“I think people are pretty happy with that,” Dillon said.
Looking ahead
Although millions in assistance has been distributed, business owners have a number of COVID-related concerns going into the winter and the years to come.
For Beeson, the big concern is having stable supply chains for the rest of the year. Bicycles, canning jars lids and paint were in high demand and short supply this summer, and Beeson doesn’t expect that to change next year.
“Lots of people wanted bikes this year,” Beeson said. “When spring hit outside, people didn’t have anything to do so they went out and bought a new bicycle. Right now we’re ordering for next year, and we won’t get many shipments until January or February of next year … another great example is canning jar lids. They’re not available from our suppliers. In June I ordered canning lids to be ready for fishing, and they were out. I will not get them until the beginning of January.”
Miller also dealt with supply chain issues this year, often waiting months before getting the materials he needed for jobs.
“It took me back to the old days, when you expected to wait two months to get anything,” Miller said.
Miller spoke to the Clarion in between jobs and planned to be busy for the next few months, saying that this is the time that contractors try to fit in as many jobs as they can before winter. This year was no different in that regard.
Carluccio has seen her revenue decrease by 47% this year, and while she anticipates additional assistance from the City of Seldovia and the borough, she’s also planning on renting out some of her extra storage space this winter to make ends meet. She also gets some winter reservations from duck hunters, but at this point she’s expecting about half of the usual bookings.
“My biggest concern now is, how long will it be before things get back to normal?” Carluccio said. “You don’t have a business just to pay the bills. You want to succeed and be able to make money.”
For Stroozas, now would normally be the time that he would be putting together the content for his 2021 dining guide. As of September, however, Stroozas said he planned to just run the 2020 edition, considering there are still so many copies to distribute. The clients that Stroozas has are all in the hospitality industry, so many cannot afford to pay for advertising like they could in the past.
“I’m working with my existing clients on a reduced rate, but at this point it’s like, will they even be able to pay me 50%?” Stroozas said.
Dillon said that although the state’s grant program is much-improved since it was first implemented, there are still people being left out — namely, the commercial fishing industry.
“A lot of these folks were still out on the water during the application window, so they still need help,” Dillon said.
Reach reporter Brian Mazurek at bmazurek@peninsulaclarion.com.
