Even on a bright day in the middle of a work week, downtown Chicago can’t shake the gloom.
In many places, the best corners are empty, and the surviving restaurants, if they’re smart, have window or sidewalk signs declaring they’re open. Aside from the commute or the lunch break, any day before the pandemic hit three years ago can seem like a sleepy Sunday.
Businesses are in their own ‘long COVID’ battle. Some have changed their hours of operation and competitive approaches. But few who run them know exactly what rhythms of urban life they depended on. The pandemic, receding as a health threat, has had a profound impact on where people choose to work and therefore spend money.
Atlas Stationers, a family-run business in the Loop dating back to 1939, needed a quick rethink. When the shutdown took place in March 2020 – three years ago this week – a company serving packed offices in its area found zero income overnight. So President Don Schmidt, with flattery from his sons Brian and Brendan, enacted a plan.
The store is still located at 227 W. Lake St., but visitors who haven’t been there in a while will do a double take. You may remember its old looks – stacked to the ceiling with notebooks and accordion binders like in an office supply warehouse. It now sparkles like a jewelry store, but not to display rings and watches. Fancy fountain pens and stationery are on display.
Don Schmidt (right), President of Atlas Stationers, speaks with David Oscarson, a designer of luxury fountain pens.
They form the core of Atlas’ new business, which consists of 75% online orders that ship across the US Hobbies, the Schmidts said.
Don Schmidt said it took Atlas a year to reach its pre-pandemic earnings. Now it’s doing three times as much business and has added five employees in recent weeks, bringing the total workforce to 16. “I think that’s a top value for us,” said Schmidt.
The store itself has been redesigned to place fewer items on lower shelves with more attractive displays to cater to tourists and walk-in customers who have discovered its niche online.
“Saturdays have become our busiest day,” and the family is looking forward to warmer weather, which will bring people to the Riverwalk near the store, Schmidt said.
He said the online presence makes even first-time visitors feel like they know the place. A warm welcome and some in-store events can help retailers survive, Schmidt believes. Atlas has a table amidst its valuable floor space where people can test out pens and some of the stores’ 600+ colors of ink, and Schmidt says people love it.
Customers browse products at Atlas Stationers, Inc. in the Loop, Thursday, March 16, 2023.
He was able to follow the comeback of downtown and how it differs from other areas. “Check out the Fulton Market. This place rocks. It’s crowded,” said Schmidt, mostly from younger people working from home. “But the loop itself is better. It was empty, but now it’s stable.”
Like other merchants, Schmidt believes that the old habit of five days in the office is over. “I think Monday, Friday [office visits] could be questionable for the foreseeable future,” he said.
Similarly, Mike Flanagan, chief growth officer at Chicago-based Arch Facilities Group, has identified opportunities from the pandemic but knows many risks. His company is a private equity-backed company that has acquired weaker competitors in the business of providing workout rooms, lounges, coffee bars and other office rental and hotel services. Even bowling alleys and virtual golf simulators have been set up.
It has more than 400 locations across the country, including 52 in Chicago and another 10 in the suburbs. Flanagan said Chicago’s downtown recovery is ahead of San Francisco, Portland and Seattle. But while office landlords ponder how to make buildings more entertaining to draw occupants back, some have been slow to commit to expensive work.
“What used to be a four to eight month decision-making process has evolved into two years,” he said. As a result, Arch has furloughed some workers.
Pedestrians walk past a vacant shop front at 10 S. La Salle St. in December. City officials are exploring ways to revitalize the Loop.
Tyler Pasciak LaRiviere/SunTime
Flanagan said upgrading facilities can cost a building $25 to $30 million. Office building owners often face the expensive question of converting ground floor space, which typically charges high rents, into a tenant convenience, he said.
Weekly data from Kastle Systems, which tracks comings and goings in buildings with security equipment, showed that as of late January, about 50% of downtown Chicago office workers were inside the rooms daily. The proportion has risen only modestly in recent months, marking a recovery that Michael Edwards, head of the Chicago Loop Alliance, has described as “excruciatingly slow.”
A key component of downtown living, hotels have fared better and expect more bookings as convention business picks up throughout the year. As tourism is also set to improve this summer, hotels are slowly increasing average rates, according to research firm STR data provided by the Illinois Hotel & Lodging Association.
But things may not return to pre-pandemic normal for at least two more years, said Michael Jacobson, the association’s president and CEO.
Broader dimensions of the economy are showing their resilience and the stabilizing effect of federal aid. They also show that even if it’s homework, a job is still a job. The state government’s annual private sector employment census found that the total number of jobs in central Chicago had changed little overall from 2019, the last full year before the pandemic, to March 2022.
Overall, Chicago remains slightly below its pre-pandemic record of 1.2 million private sector jobs in 2019, the data shows.
Other research by the labor-backed Illinois Economic Policy Institute on job growth or decline through 2021 showed that most post-pandemic gains were in high-paying jobs that could be done remotely in areas like management and financial services. Among the jobs that fell most often were administrative support roles and in restaurants and similar food services, all jobs tied to presence at a location.
While some business leaders are pushing to return to office work, at least part-time, many employees resist, still preferring a couch to a desk. It might not matter if the office has free pizza. The preference for remote work could even benefit suburban office buildings, where brokers are reporting an increase in leasing activity by companies enticing workers with shorter commutes.
Atlas Stationers, Inc., located at 227 W. Lake St. in the Loop is seen in this photo dated Thursday, March 16, 2023.
Whether more workers return from downtown could depend on concerns about crime, Atlas Stationers’ Schmidt said. He said that during the riots that followed the police killing of George Floyd, his store’s windows were smashed but nothing was stolen. A survey by WBEZ found that drivers cited crime, unreliable service and dirt as reasons not to use the CTA more often.
To revitalize downtown, “it comes down to crime and taxes,” Arch Amenities’ Flanagan said.
Schmidt and Flanagan both support city efforts to bring more housing downtown, such as with a program that incentivizes developers to improve the La Salle Street corridor. It could take outdated office layouts off the market, but requires expensive renovations. But there’s nothing rah-rah in her vision, just realism.
“I don’t think the city has an alternative,” said Schmidt.
