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Fertitta cuts 40,000 workers as virus rocks service sector

HOUSTON

Galveston-born billionaire Tilman Fertitta has temporarily laid off 40,000 employees across his Landry’s Inc. business empire, according to business wire service Bloomberg.

The furlough accounts for about 70 percent of the employees who work at Fertitta’s restaurants, hotels and casinos, according to the report.

Fertitta didn’t criticize efforts to curb the spread of the coronavirus, although such measures as social distancing and government restrictions have staggered the hospitality industry.

“I think what we are doing with the shutdown is good, but in a few weeks people will need to be around people,” Fertitta told Bloomberg. “Otherwise, you are going to go into an economic crisis that is going to take us years to dig ourselves out of.”

The furloughs could last “a few weeks,” according to the report.

Fertitta has sizable holdings in Galveston County, including the Brick House Tavern & Tap, Bubba Gump Shrimp Co., Fish Tales, Joe’s Crab Shack, the Saltgrass Steakhouse and the Rainforest Cafe. He also owns the Galveston Island Historic Pleasure Pier, the Kemah Boardwalk and the San Luis Resort. Keeping properties open during the crisis has cost Fertitta millions of dollars in cash a day, he said.

“We are doing basically no business,” Fertitta said. “I want to hire every employee back. This is very hard on a lot of working families, but we have to survive or there is no company.”


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It's a race against time for small businesses across Galveston County

Pam Cauthen doesn’t need many words to describe how she’s feeling as the manager of the Ann’tiques, 1830 W Main St. in League City.

“It’s looking grim,” she said.

As local and state agencies have imposed more and more rules aimed at stemming the spread of coronavirus, also known as COVID-19, Cauthen has turned to the online marketplace eBay in an attempt to move merchandise. But that effort isn’t going well, and she’s now looking at the possibility of the store closing indefinitely as soon as Thursday, she said.

The slogan “Shop Local” has taken on urgent, even dire meaning, as city officials and business leaders race to help boutiques, restaurants and other independent businesses survive social distancing orders and closures by various governments. Like never before, chambers of commerce and government officials are creating games, challenges and marketing campaigns to inspire residents to spend money in their hometowns to stop what they fear will be a long-damaging or, in some cases, fatal blow to small businesses.

In the meantime, several area businesses are shifting business online and offering steep discounts to entice potential customers.

“Everything, at this point, counts,” said Terrie Ward, co-owner of Texas Artisan, 2800 Marina Bay Drive in League City. “Every transaction makes a difference. As retailers, we have to be creative. But consumers also have to make a concerted effort to keep small businesses in mind, rather than to do the default thing and shop on Amazon.”

Ward estimates small businesses like hers can bear, at most, about 60 days of government restrictions and social distancing before many start disappearing, she said.

BUSINESS BINGO

As of Tuesday, there were 21 confirmed cases of coronavirus in Galveston County, according to the health district. Nationwide, more than 44,183 people had been diagnosed with the virus as of Tuesday afternoon, and more than 544 people had died, according to the most recent numbers from the U.S. Centers for Disease Control and Prevention.

And, late Tuesday, a county order telling most residents to stay at home took effect and will remain in place until April 3.

With local businesses feeling the hurt, the League City Regional Chamber of Commerce is launching a Bay Area bingo for business promotion, wherein residents fill out a bingo chart when they complete different activities — such as shopping local online, buying a gift card, ordering takeout and sharing a small-business’ post on social media, among others, said Dewan Clayborn, president and CEO of the chamber.

Those who complete the bingo chart will be entered in drawings, he said.

“This is not the time to be frantic and scared, but assess and scale your business,” Clayborn said. “Business owners need to look to gain additional sales online and through marketing campaigns.”

THE LOCAL CHALLENGE

Earlier this month, the Galveston Regional Chamber of Commerce launched a “Buy Galveston First” campaign and a 14-day challenge to support local businesses.

Chambers also offer members classes and information as operators look into options such as small business loans, said Gina Spagnola, president and CEO of the Galveston Regional Chamber of Commerce.

“We are going to survive, but it’s scary,” she said. “Our retailers went to market, shopped and got things prepared for two weeks worth of spring break. But now their credit cards are maxed out and they’re looking at having to shut down.”

In La Marque, Charles “Tink” Jackson, city manager, launched a week-long campaign encouraging locals and others to take advantage of takeout options at La Marque restaurants by entering them in a drawing.

“All week, we’ve encouraged people to buy carry-out and drive-through meals at local restaurants and save their receipts,” Jackson said.

The receipts are either posted on the city’s social media page or emailed to the city and collected for a drawing on March 29. The winner will win a $100 gift card to use at a local business.

“I put up the money; I want to make clear it’s not taxpayer money we’re giving away,” Jackson said. “And you don’t have to be from La Marque to win. We want everybody from Texas City and all over the county to come over and eat at our restaurants.”

‘IT’S NOT THE SAME’

One of the most popular eateries, judged by the number of receipts posted on Facebook, is Benito’s, 1309 1st St., a Mexican food restaurant that’s been in La Marque for 50 years. Manager Will Andino and his mother, the owner, are the last two working after having to send their servers home when they went to strictly take-out service last week, Andino said.

“The last two days were pretty good, but it’s not the same as with people in here,” Andino said. “We’re usually busy with lots of people.”

Andino doesn’t want to even consider the possibility of Benito’s permanently closing, he said.

“We’ve been here for 50 years and that just can’t happen,” he said. “We’ll leave it up to God and the people of La Marque to get us through.”

Texas Pit Stop BBQ, 2216 I-45 N. in La Marque, saw a small uptick thanks to the Dine in La Marque campaign, manager April Leach said.

“Business has slowed down drastically,” Leach said. “We’re making just enough to get by on take-out meals, but last night we got really busy for dinner.”

‘OWNED By LOCAL FOLKS’

The La Marque campaign embraces locally owned restaurants and chains equally, said Colleen Merritt, the city’s public relations director.

“A lot of our franchises are owned by local folks, and they all employ locals,” Merritt said. “I think it’s just about encouraging people to think about options to dining in or dining at home. Every time you place an order somewhere, you’re helping somebody keep their job.”

It’s a bleak picture for many small businesses, said Peter Heim, owner of The Spice & Tea Exchange of Galveston, 2309 Strand.

Heim had one sale Monday and only one as of noon Tuesday, he said.

“There’s nobody here now,” Heim said.

Heim has been sitting alone in the shop to answer calls after he had to furlough his employees, he said.

He’ll be able to pay them through the end of the month, but isn’t sure what will happen after that if the federal government doesn’t step in with aid, he said.

“We’re going to make every effort to keep paying them,” Heim said.

Heim’s shop is allowing consumers call to have products picked up or delivered, he said.

If people think about purchasing something, they should first think about local businesses, he said.

‘HANGING IN THERE’

Haak Vineyards and Winery in Santa Fe already has had to lay off two people, said Gladys Haak, co-owner of the business.

“We have a skeleton crew working, only to complete bottling,” Haak said. “We have lots of wine that has to get in a bottle, because it can go bad.”

The winery is selling wine and will deliver it to customers in their cars if they call ahead, she said.

“We’re hanging in there, but I don’t know for how long,” Haak said.

No one had called the winery about any special buy-local efforts, but Haak was hoping local residents would recognize the business was hurting and reach out, she said.

“We give at least four donations a week to charities, and now it’s time to pay back,” Haak said. “We need the business. If you need to drink wine, you can call us.”

PRICED TO MOVE

Luis Briones, owner of Friendswood Frame and Gallery, 150 S. Friendswood Drive, said he was resorting to heavy discounts and improvisational sales to stay afloat for the time being.

“I’m taking a lot of the business home and listing products online,” he said. “I’ll give out my cell phone number and run sales through my phone if necessary, telling people they can pick up the merchandise when the shelter-in-place order is released.”

Even some money coming via heavy discounts is helpful when it comes to generating enough revenue to pay employees, rent and other overhead costs, he said.

“There are going to be casualties,” Ward said. “But at the end of the tunnel, for the businesses that make it, I hope the community as a whole understands how important supporting small businesses is. They are the true infrastructure of America.”

Reporters John Wayne Ferguson, Keri Heath and Kathryn Eastburn contributed to this report.


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UTMB engineers hope hack can address ventilator shortages

GALVESTON

A pair of inventors at the University of Texas Medical Branch are hoping that a hacked-together device they’ve created can help hospitals in need turn common medical equipment into emergency ventilators.

Using electric switches, a valve, a blood pressure cuff and a rescue breathing bag, Dr. Christopher Zahner and Dr. Aisen Chacin have devised a possible way to create a makeshift ventilator if the actual machines start to become unavailable.

“We’re responding to the lack of ventilators across the world,” Chacin said. “We started brainstorming about what we could do to mitigate that issue and help other hospitals worldwide.”

The pair’s idea essentially creates a breathing aid for patients. The cuff goes around the bags, and the electronic switch tells it to squeeze and release. The bag can then be hooked up to a hospital oxygen supply and turned into a breathing machine.

A shortage of ventilators is one of the most pressing issues of the coronavirus crisis. In the most serious cases, infected people can suffer severe breathing problems. The machines are needed to help them survive.

Zahner, a former NASA engineer who is now an assistant professor of clinical pathology at medical branch, and Chacin, an engineer and medical device designer, came up with the concept at the medical branch’s MakerHealth Space, a lab, of sorts, where medical branch employees are able to design, build and test devices that might be able to help them complete their jobs. Chacin is the lead designer at the lab.

Zahner and Chacin hope their design can be in brought in front of a medical review board soon, and that they can begin to share their designs with hospitals around the country, they said.

The attractiveness of the idea is that the parts can be relatively easily and cheaply obtained, Chacin said. Devices such as blood pressure cuffs and breathing bags already are widely available in hospitals. The cost of one set up would cost less than $100, she said.

“We are using supplies that are in most of the medical supply closets that are in all units in the hospitals,” Chacin said.

The idea to use available and existing medical supplies might mean some hospitals can create emergency ventilators faster than waiting for completely new devices to be created, Zahner said.

“Most of the solutions that we’ve seen thus far utilize non-medical sources,” Zahner said. “It’s not a good solution for most hospitals. They just can’t deploy non-medical breathing equipment. This will be deployable in most hospital settings.”

Along with seeking a medical board review of their device, Chacin and Zahner are trying to find a manufacturing partner to help create a better interface for the device, Chacin said.

“There are a lot of different design platforms out there right now where people are saying we can solve this problem in a lot of different ways,” Zahner said. “We are at the point now where we think this is the basic platform and the bedrock people should be operating from.”


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Coming Thursday

As coronavirus spreads, so do myths about it. What’s fact and what’s fiction?


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Galveston tells short-term-rental guests to leave, closes fishing piers

GALVESTON

The city of Galveston on Tuesday ordered all short-term guests staying in vacation rental properties to leave the island, closed all public fishing piers, halted charter boat trips, closed electronic amusement gaming establishments and extended its emergency disaster declaration to April 3.

The orders were the latest in a series over the past week meant to encourage tourists to leave the island, which attracts more than 7 million visitors a year, and limit large outside gatherings as city leaders attempt to reduce the spread of coronavirus.

The decree sending vacation renters home excluded hotels and motels and drew objection from the association representing the island’s short-term-rental industry.

The orders, ratified by Galveston City Council during a regularly scheduled meeting Tuesday afternoon, will be in effect at least until 5 p.m. April 3. The council plans to meet next week to evaluate whether it will need to extend those orders.

The city declared a state of disaster March 16 and since then has closed bars, tourist attractions and the dining rooms of restaurants.

“No tourists,” Mayor Jim Yarbrough said. “Period. That’s the bottom line.”

The order for short-term rental guests went into effect at 10:45 a.m. Tuesday and doesn’t apply to Winter Texans — people who spend the winter months in Galveston — or people staying for more than 30 days in a short-term rental property, Yarbrough said.

Galveston had almost 3,000 registered short-term rentals in December, according to the Galveston Park Board of Trustees, which promotes island tourism.

Unlike hotels, motels and bed-and-breakfast properties, “operators of short-term rental units do not have the professional housekeeping staff and management present to ensure that appropriate cleaning and hygiene measures are enforced,” according to the order.

Yarbrough’s order focused on short-term rentals exclusively, rather than including hotels and motels, partly because the island’s vacation rentals have a higher occupancy rate than hotels.

Island hotels have only about 6 percent occupancy, while the short-term-rental owners were reporting near full occupancy, Yarbrough said.

The park board is projecting that next week, full-service hotels and vacation rentals will be at about 10 percent occupancy and limited-service hotels will be at about 15 to 20 percent occupancy, Chief Tourism Officer Michael Woody said. That’s based on current bookings, and the pace of reservations and calls, Woody said. A full-service hotel is typically higher priced with restaurant and lounge facilities.

Yarbrough also said he wanted hotels to remain functional in case the city needs to use them to house first responders or as hospital rooms, he said.

“If you close a hotel, it doesn’t just open on a dime,” Yarbrough said.

But short-term rentals shouldn’t be singled out, said Mary Branum, president of the Short Term Rental Owners Association of Galveston.

Guests of vacation rentals are less likely to come into contact with others compared with guests of hotels or bed-and-breakfast operations, Branum said.

“Short-term rentals are individual properties, free-standing homes, where there is zero interaction with any of us,” Branum said.

Based on conversations with association members, Branum doubted occupancy was particularly high among short-term-rental properties, she said.

The short-term rental industry has always fought for what’s best for Galveston and its residents and should be treated equally with hotels, Branum said.

It’s hard to look at the order and not feel singled-out, said Claire Reiswerg, co-owner of property management company Sand ’N Sea Properties.

Sand ’N Sea has professional cleaning measures in place, such as having laundry commercially cleaned, and has for decades, Reiswerg said.

“If the goal is not to have tourists in Galveston, then let’s look at how to not have tourists in Galveston and let’s look at it holistically,” Reiswerg said.

The city council plans to meet next week to determine whether island hotels are filling up with tourists and might consider extending the order, Yarbrough said.

Enforcement will be based on good-faith trust, Yarbrough said.

“Enforcement is tough,” Yarbrough said. “It’s tough during normal times.”

The city is trying to send the signal that now is not the time to visit the island, even if Harris County or mainland residents would like a quick getaway, officials said.

“We need to be very, very careful that we’re not inviting a bunch of people down here to the island to quarantine,” City Manager Brian Maxwell said.

The island is having issues with supplying materials to its own residents and doesn’t need visitors competing, Maxwell said.

The city also ordered closed all commercial fishing piers, charter boats and electronic amusement games, including eight liners and video poker machines, as of Tuesday.