As Penn State students return, the local business community fights to survive

STATE COLLEGE — For 14 years, Lila Yoga has been a staple in a downtown usually teeming with people.

But its bright orange and yellow handcrafted sign on Beaver Avenue came down last weekend. It’s among nine businesses in the shadow of Pennsylvania State University’s flagship campus that local leaders said have closed because of the pandemic, with others struggling to hang on.

“Everything here, whether it’s a restaurant or a yoga studio, is so directly affected by the university,” said Erica Kaufman, owner of Lila Yoga. “Although it’s very painful, it seemed smarter to let go of the space right now and reassess at another time.”

While business closures are happening around the country, quintessential college towns like State College have been hit particularly hard. Their businesses are built around the university, which supplies many of their patrons, and its fate is their fate.

With its 24 campuses, Penn State is an economic engine for the commonwealth, contributing $11.6 billion to the state’s economy in 2017, nearly $128 million of it in Centre County, home to the University Park campus. Local tourism officials estimate the region has already lost $100 million in revenue from hotels, businesses, and other venues as a result of the virus. The cancellation of Nittany Lions football this fall could mean the loss of an additional $80 million.

» READ MORE: Thousands of students back in Happy Valley? Penn State is planning for it.

Earlier this week, many of the university’s more than 40,000 undergraduates began moving back to campus. But viral videos Thursday of maskless students packed together at an outdoor party caused the university to threaten to shift to all-remote instruction and send students home, as some other schools have done, including the University of North Carolina at Chapel Hill.

It’s a touchy issue for college communities across the country, worried that students coming to campus from outside their area will cause a potentially deadly virus spike. Many colleges, including Drexel, La Salle, and the University of Pennsylvania, have decided to stick with remote instruction and limit students on campus. On the other hand, for local businesses, a second campus shutdown could deliver a devastating blow.

» READ MORE: Penn State students party outside freshman dorms, flout coronavirus safety rules, during move-in week

“If we can make it through this school year without being shuttered, I think we can be recovered by next fall,” said Rob Schmidt, executive director of the State College Downtown Improvement District, noting that recovery also will require the return of all students to the classroom and 100,000-plus fans to the football stadium. “This school year is critical to how long it will take to recover.”

Last week for the first time in months, the roughly mile-long business district that borders Penn State didn’t resemble a ghost town. Parking spots were filled. Parents and students walked along College Avenue, toting bags of Penn State-branded clothing and filling outdoor seating at restaurants.

“It’s exciting to have people in the restaurant again,” said Curtis Shulman, director of operations for Hotel SC, which runs several businesses including the Corner Room restaurant and is now owned by former Philadelphia 76ers president Pat Croce’s hospitality company. “Our demand quadrupled in a couple days.”

Every year, Centre County’s population swells by more than a third as students return. This year, 10,300 students are living in Penn State’s dorms, about 74% of capacity, a university spokesperson said, with many more living in the surrounding community. About two-thirds of the student body typically lives off campus.

The university, which has had to furlough some staff and stands to lose $250 million as a result of the coronavirus, is the community’s main employer, its lifeblood, as it is in many small college towns.

“College towns … like State College, a lot of their economy runs on restaurants and stores and tanning salons that are frequented by students, and those are taking a huge hit,” said Charles Ballard, an economics professor at Michigan State University, where its host community, East Lansing, also has been affected. “They run on football and basketball, and those are taking a huge hit. You put all that together, and it’s an ugly picture for communities like this.”

The borough of State College, founded in 1896, got its name from the university, then known as the Pennsylvania State College. Three of the seven members of borough council work for the university, including Council President Jesse Barlow, a computer science and engineering professor.

Council has had to weigh concerns of businesses and the university with those of community members and some faculty, who worry that bringing students back will increase local infection rates. The county has had more than 400 confirmed and probable cases of the virus.

“The university has done a lot,” Barlow said. “They’ve made a lot of preparations, but there is a lot of concern that has been expressed to me that it may not be enough.”

» READ MORE: Nearly three-quarters of Pa. state university faculty would not feel safe teaching students face-to-face this fall, survey shows

At a borough council meeting last month, the issue was hotly debated. Member Theresa Lafer warned it takes only a few virus carriers moving into each apartment building to cause major problems.

“I see this as the beginning of a pandemic in more than one building,” she said.

Sarah Townsend, an associate professor of Spanish and Portuguese at University Park and a member of the Coalition for a Just University at Penn State, maintains that the school is not doing enough testing or taking enough precautions to keep the campus or community safe. The school should have tested all students upon arrival and should test 10% of the campus population daily, rather than the planned 1%, she said.

“If you are going to do this, you need to do it right,” she said.

» READ MORE: What if students won’t wear masks in class? Professors want assurances that universities will enforce a mandate.

Penn State has been planning the return for months and recently launched a campaign “Mask Up or Pack Up,” urging students to follow social distancing guidelines. It also had 30,000 students and staff — those coming from virus hot spots — get tested before returning to the system’s campuses.

Penn State’s plan “significantly exceeds the governor’s guidelines and has been developed with infectious disease, health policy and supply chain experts,” said Lawrence Lokman, Penn State’s vice president for strategic communications.

Borough council enacted a $300 fine for failing to wear a mask when required, limited the numbers of people who can stand outside a business, waiting to get in, and capped the number of people allowed to gather at a residence at 10.

Even some students said they doubted it would be enough.

“I don’t think it will be long before we get sent back home,” Emma Hurley, 18, a freshman from Pittsburgh, said as she moved into her dorm Wednesday.

Some students said they know the stakes and intend to follow the rules.

“I don’t want to contribute to anything that might cause Penn State to shut down or have a spike in cases,” said Andrea Prest, 18, a freshman from Chicago, after getting her picture taken at the Nittany Lion statue.

When students left in March, businesses felt the impact immediately. Those who thought a local economy fueled by a state’s flagship university was largely protected found otherwise.

“Ninety-five percent of our business dropped within a week,” said Gary Brandeis, president of the Ardmore-based Scholar Hotel Group, which runs the 165-room Hyatt Place hotel in downtown State College and has another hotel under construction there. “Everything we thought was somewhat recession-proof … is not protected from a global pandemic.”

Fritz Smith, president and CEO of the Happy Valley Adventure Bureau, the local tourist agency located on Penn State’s campus, cited the region’s $180 million loss in revenue and potential revenue, a chunk of it from losing fall football. On game days, State College becomes the third-largest city in the state, with hotels packed to capacity. Home games bring more than 700,000 to the region annually, and that’s only those who fill the stadium. Many others come and tailgate outside.

» READ MORE: Big Ten calls off football season. Penn State AD Sandy Barbour expresses support for decision.

“This is their Christmas season here,” said Caroline Gummo, chief operating officer of the Family Clothesline, which reopened in July. “They use the football traffic and fall sports traffic to keep them afloat the other seven or eight months of the year. With the loss of football season, a lot of us are just bracing for the impact and hoping to weather the storm.”

Her store, which sells Penn State apparel and souvenirs and has been in the borough for more than 35 years, saw a 75% decrease in business after the coronavirus hit, but was able to stay afloat through its online store, Pennstateclothes.com, she said.

Hotel SC expects a drop in revenue in the seven figures, Shulman said. While it has been able to reopen two of its businesses including the Corner Room, its beer garden, small bar, and nightclub are among those that remain shut.

Kaufman, of Lila Yoga, said that even though guidelines would have allowed her to reopen her studio, she didn’t think it was safe.

“For me to ask people to congregate indoors and breathe deeply didn’t seem like a very good idea,” she said.

After six months of paying rent with no income, she decided to close.

Harpers, a clothing store serving the Penn State community for nearly a century, has been running 50% behind in revenue and without football, owner Brian Cohen doubts that will change. The store counts university employees, alumni, and parents among its main customer base.

“We are kind of like a factory town, and that’s our factory,” Cohen said of the university. “And we need it to be running well.”

His day was brightened when two longtime customers popped in last week.

“We always come to Harpers. We just love it,” said Tracy Steele, of Wynnewood, who was in town to drop off her daughter, a Penn State freshman.

With her was her husband, Kevin Steele, Montgomery County’s district attorney and past president of the university’s alumni association.

“They know him. They look out for him,” Tracy Steele said of Harpers. “They instantly recognize both of us.”

Businesses should do their best to hold on until spring, when there’s a chance football will return, said Smith, of the visitors bureau.

“It would make for an awesome comeback,” he said.