Good morning, MBA readers,
For most property owners and managers, the only option is to wait out the crisis. The coronavirus pandemic has triggered a cascading impact across industries, which is now trickling down to landlords whose tenants are especially vulnerable to the economic shocks. Some Missouri landlords are working with tenants on alternative payment arrangements, which could be driving more people to pay this month’s rent. But they are wary of a prolonged crisis, which would only further hamstring tenants and landlords alike.
Tenants’ rights advocates have pushed the governor to implement an emergency moratorium on rent and mortgage payments as relief for workers who face income insecurity. But opponents argue that a statewide rent freeze would hurt property owners.
While the stress of missing rent is more personal for individual renters, it’s also affecting major companies. Such is the case with AMC, leader of the now-endangered theater industry, which announced that it will miss rent payments indefinitely — the latest in a string of drastic austerity measures by the company.
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Fed unveils $2.3 trillion stimulus plan, far exceeding past rescue
The Federal Reserve Bank said it will use previously authorized funds — meant to buy municipal and corporate bonds — to include riskier debt in an unprecedented effort to absorb shocks to the economy. (New York Times)
Parson orders schools to close for rest of school year
Gov. Mike Parson announced Thursday that Missouri schools will not reopen for the remainder of the academic year due to the coronavirus. He made exception for school nutrition and child care programs. (St. Louis Public Radio)
UM System mulls restructuring, job cuts
In addition to $36.5 million in state funding cuts, the University of Missouri System could see a “severe to very severe” drop in fall enrollment due to the ongoing pandemic, its CFO Ryan Rapp said Thursday. In a worst-case scenario, he said, courses could stay online for the entire fall semester. System leaders said they are considering furloughs, layoffs and restructuring to drive down costs. (Columbia Missourian)
Virtual rally calling for ‘rent relief fund’ draws 200
Advocacy group KC Tenants held a virtual rally on Thursday, asserting that a statewide suspension or freeze on rent and mortgage payments is necessary relief for thousands of Missourians who are out of jobs. Gov. Mike Parson said earlier this week that rental assistance is “not a priority” at the moment, but he did not rule out the idea. (KSHB)
State AG orders stores to stop inflating mask prices
Missouri Attorney General Eric Schmitt’s office sent cease-and-desist letters to three St. Louis businesses accused of selling protective masks at a markup as high as 800%. (St. Louis Post-Dispatch)
Amid forecast of bankruptcy, AMC will stop paying rent
The Leawood, Kansas-based cinema chain, which leases nearly 900 theaters worldwide, has informed its landlords it will not make any rent payments starting in April. On Thursday, MKM Partners analyst Eric Handler downgraded AMC stock to a “sell” rating on the expectation that liquidity issues will likely push the company to bankruptcy. (Kansas City Business Journal, Variety)
KC-area trucking company under pressure from activist investor
Barna Capital Group, which owns about 5% of YRC Worldwide, said Thursday it will work to replace three members of the Overland Park, Kansas-based trucking company’s seven-member board of directors. In its regulatory filing, Barna said YRC’s board has “not provided the needed guidance for the company to achieve decent operating results.” (Kansas City Business Journal)
Caleres announces layoffs at headquarters
The footwear company has laid off 368 employees at its Clayton headquarters due to the COVID-19 crisis. The company said it has cut costs “in all areas of the business,” including layoffs and furloughs across its retail stores, distribution centers and corporate offices. (St. Louis Business Journal)
Leggett & Platt sheds 422 jobs
The Carthage-based manufacturer laid off 422 of its 22,000 employees last week for at least six months due to the pandemic. The company said it has instituted health and hygiene measures in facilities where employees cannot work remotely. (Springfield Business Journal)
KC orders Guitar Center facility to close after it defied order
Following debate about the definition of an “essential” business, officials closed a 700,000-square-foot Guitar Center warehouse, which has remained open despite Kansas City’s stay-at-home order. The facility employs about 300 people fulfilling orders for musical instruments and gear. (KCUR)
Port St. Louis commits $1 million toward small business loans
The St. Louis County Port Authority said Thursday it will contribute $1 million to a fund that aims to loan local small businesses up to $5,000 apiece at no interest. The program was started by the St. Louis Economic Development Partnership and St. Louis Development Corp. last month. (St. Louis Business Journal)
Airlines reduce regular flights at Columbia airport
American and United airlines have canceled three regular flights from the Columbia Regional Airport to Chicago as demand for air travel declines around the world. The airport will have to maintain at least one flight, five days a week, under amended guidance from federal transportation officials. (Columbia Missourian)
Schnucks advises shoppers to wear masks at stores
The St. Louis-based grocery chain is now asking shoppers to wear protective face coverings when shopping at its stores. On Thursday, Gov. Mike Parson’s office said it will not issue a statewide order to that effect. (St. Louis Post-Dispatch)
Wash U fast-tracks clinical trial on potential COVID-19 treatment
Washington University researchers will join one of 20 concurrent clinical trials for chloroquine, a malaria drug being tested as a potential treatment for COVID-19. The drug has been heralded by President Donald Trump as a treatment, but health officials its effectiveness against the virus is unproven and largely anecdotal. (St. Louis Post-Dispatch)
School of Rock shutters Springfield location
The local branch of the musical instruction franchise is closing its doors due to hardships leading up to the coronavirus outbreak, laying off eight employees. The franchise will continue to cover online lessons. (Springfield Business Journal)
Today’s graphic offers another look at the hit air travel has taken since the start of the coronavirus outbreak. Flights have decreased by about 60%, according to flight tracking service Flightradar24. The seven-day moving average for number of flights plummeted to about 81,000 on March 31 from nearly 178,000 three weeks earlier.
Say that again
“There is some slower payment of rent, but not yet a critical problem, at least not yet, nationally.”
That’s Jeffrey Adler, vice president at real estate software firm Matrix, explaining the drop in rent payments for April amid the COVID-19 crisis, the St. Louis Business Journal reports. According to a survey by Matrix and the National Multifamily Housing Council, about one-third of U.S. renters did not make their rent payments by April 5, compared to just 18% who didn’t a year earlier. In Missouri, 87% of people paid April rent by the end of the first week, according to Entrata, another property management software firm involved in the survey. One potential mitigating factor, Entrata said, is the willingness of property owners to waive convenience fees. One example is Gateway Multifamily, a St. Louis-area property manager that oversees more than 300 apartments, which said it has about 15% of rents outstanding or deferred via a payment plan. Deca Realty Co., also of St. Louis, has gone a step further and bought $50 gift cards to Schnucks, Walmart and Target for its residents across 1,500 apartment units.
That’s how much new daily home listings are down in St. Louis amid a pandemic as well as a yearslong trend of low inventory, the St. Louis Business Journal reports. Based on pricing and supply data from Zillow, the local market shrunk at a faster pace than the national average of 27%. On one hand, the slim stocks are potentially wiping out billions in sales commissions for real estate agents nationwide. Yet some brokers in St. Louis argue that it’s also keeping home prices stable, for the time being. “It’s not like people are going to come in and steal homes right now,” said Mark Gellman of the Gellman Team at Coldwell Banker Premier. “The reason is, it goes back to our inventory. There is just limited inventory.”
Leave it to the sisterly duo at Jones Bar-B-Q to officially up the ante and unveil a barbecue vending machine for hungry after-hour patrons. We’re living for it! @M2Esq has the deets. https://t.co/2THnjY0NTE
— In Kansas City (@inkansascitymag) April 8, 2020
In a time of many uncertainties, one Kansas City-area restaurant wants to make sure its customers can get its barbecue whenever they want. Run by sisters Deborah and Mary Jones, Jones Bar-B-Q recently installed a vending machine outside its store after requests from customers, IN Kansas City reports. “Our customers kept telling us they want to buy products in the evening, and we’ll do anything to make our customers happy,” Deborah Jones said. The temperature-controlled device will be stocked daily with some of the restaurant’s favorite items, from chicken wings to a rib tips sandwich. It may well be the first of its kind in the Kansas City community, but, according to a barbecue blog, there is at least one other device in Tokyo that sells prime rib at a train station.
Hello, my name is
This seasoned executive has been named the new vice president of entrepreneurship at the Ewing Marion Kauffman Foundation, Startland News reports. Over the years, Gaskin has served in a number of leadership roles, including senior vice president of global business strategy for BCD Group, a travel service conglomerate, and chief operating officer for Impact Hub Network, a platform for entrepreneurs. In his new role, Gaskin will lead the foundation’s entrepreneurship portfolio, including grantmaking. Gaskin’s appointment caps a months-long national search triggered by Victor Hwang’s departure from the post at the end of 2019.
It’s been a pleasure doing business with you this morning. Have a great weekend.