Downtown Memphis Still Working on Comeback From Pandemic

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By JANE ROBERTS, Daily Memphian

MEMPHIS, Tenn. (AP) — Downtown is trying to stage a pandemic comeback, but numbers show it’s still a work in progress.

The area is vibrant sporadically, with presses of people and lines at restaurants for evening events and some lunch shifts, but the number of workers is down from pre-pandemic levels.

In 2019, before the pandemic began, Memphis had an adult, daytime worker population of 47,337 people. The Downtown Memphis Commission is in the process of determining the current number through an online survey that will close in mid-December.

Of the 2,000 responses it has received, more than 40% report working full-time out of the office. Those people were in the office before the pandemic.

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Nationally, available statistics seem to bear out that workers are slowly returning to the office, though not at the full-time pre-pandemic number of hours.

Forbes reported in September that office usage in 10 major metro areas was at about 50% of pre-pandemic levels and that the percentage might actually be higher because the data did not include many large real estate owners.

But while in the office, it’s not a 9-to-5 Monday-Friday return, which seems to be a thing of the past at least for now. Data results showed that in Manhattan, for example, fewer than 10% of employees were in the office five days a week.

“We were interested in discovering how the return to work might be impacting our Downtown workforce and our daytime economy,” said Paul Young, DMC president and CEO.

Thousands of employees are working hybrid schedules, including nearly 1,500 AutoZone employees at the Downtown store support center. AutoZone expects staff to be in the office three days a week.

First Horizon, Prospero and FedEx Logistics are offering hybrid schedules, which means that hundreds of their employees are Downtown, but not every day.

“FedEx Logistics has modernized how we view the workday, including creating opportunities for a more flexible hybrid approach,” said Christina Meek, communications manager.

“In addition to our FedEx culture, the flexible work environment has been a great selling point for current team members and potential candidates,” she said.

Merchants are the barometer of how much the changes hurt and when.

At the Peanut Shoppe, a perennial Downtown business on Main Street Mall, business is off 35% to 40%.

“During the lunch hour, between 12:30 to 3 p.m., that’s when we start getting a bit of business, and then it starts to slow down in the late afternoon,” said Nura Abu Zaineh, daughter of the store’s founder.

Saturday business is brisk. She said that is, in part, because the family has been able to tailor the space in the store’s new location at 121 S. Main. The moves have increased its appeal, Abu Zaineh said.

Huey’s Downtown store, which fronts high-traffic Union Avenue and Second Street, is on the upswing, but foot traffic is still down, general manager Eric Hagerman said.

“It’s been challenging lately, especially with all the construction going on Downtown,” he said.

Noontime sales are close to pre-pandemic levels, “but they’re not quite there yet,” Hagerman said.

“I think the biggest difference we are seeing as far as revenue goes is in our late-night business. We’re not open as late as we were pre-pandemic,” he said.

“Now, we close at 11 or 12, as does everyone else Downtown. It used to be really easy to get something to eat at 1 in the morning. Now, nobody’s open that late as far as food goes.”

That change is entirely due to the pandemic, he said.

Hikes in food prices are also affecting how much people eat out, Hagerman said.

But across Huey’s eight locations, the Downtown store has shown some of the largest gains in the past six months.

“But we also had the most room to gain because we were affected the most with COVID. All the office people went home, and there wasn’t any tourism going on, events or games,” Hagerman said.

Shawn Massey, of The Shopping Center Group, said about 80% of Downtown office space was leased, but he noted that leased space can be an empty office or at least a less-full space.

“There is no exact science on this, no guarantees,” he said.

CBRE’s year-end review of Downtown office space shows a vacancy of 12.7%, down from 13.1% in 2019.

“The Downtown submarket has been a little confusing over the past at least two quarters, maybe even going back three quarters, because multiple buildings are being converted from office buildings to multi-family,” said Josh Seaton, research analyst.

Two of the largest are the Falls Building, 22 N. Front, and the Raymond James Tower, 50 N. Front.

A number of other tenants are downsizing in order to save money in the economy and to get nicer spaces, he said. Many of them are leaving Downtown and heading east toward the Interstate 240 Loop.

“A good example of that is Front Door. It had 50,000 square feet Downtown and is in the process of moving to about 20,000 square feet in the 385 corridor,” Seaton said.

The numbers are critical for companies and investors judging economic risk.

“Daytime workers and employees are a critical part of that. They make our street vibrant; they make our streets safer. They support our small business economies,” Young said.

For employers, part of the challenge is hiring. If stores and restaurants can’t hire enough people, they have to reduce their hours, he said.

The advantage Memphis has, Young said, is more people live Downtown here than in most of the peer cities. According to DMC research, 26,000 people live in Downtown Memphis.

Indianapolis has 24,000, followed by Louisville, Kentucky, with 14,000 residents in its downtown core.

“Nashville has 9,000, and Kansas City is at 6,500,” Young said. “I will say our geography is larger than the others are, so what we define as Downtown isn’t aways comparable, but we still think those numbers are important.”

Mike Watson, a Downtown worker, finds the restaurants are busy at lunch and in a few cases, hard to get into without a reservation.

“But I don’t know how many of these people are people working Downtown or tourists or people who just happen to be down here,” he said.

“It will be interesting to see when the weather gets colder if the numbers drop off.”

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