Being Fiscally Proactive in a Commercial Crisis
October 14, 2020
It makes sense, of course - having been desensitized over the course of the summer with chaos and violence - that the average observer chooses to filter out negative economic inferences.
But, to gain a foothold on establishing a new framework for decision making in the times to come, and turn an uncertain situation into an advantageous one, the practice of understanding and studying meaning becomes of the utmost importance.
There is a wide-reaching endemic that the nation faces: one of a catalyzing and complete shift in how we view general necessity.
The magnitude of foot traffic that has vacated metropolitan areas in the preceding months has been unprecedented and an indicator for how the trend of moving away from urban epicenters impacts how we humans will now view necessities like “office space” moving forward.
To be fair, being someone who is more of an expert in a different kind of “space” allocation – that of parking of course – the overall health of the commercial offices industry is something that affects me directly, so I care even more deeply about the implications of what such a vast shift in human behavior truly means so I can determine what to do about it, and thrive in a time when inventive approaches to business problems are needed more than ever.
Indicators of health in the parking industry are trending just as bleak as most. Revenues are down 95 percent in the last six months but this is not exclusive to my space.
Marriott’s revenue for the previous quarter is down 72 percent while Disney’s summer revenues have taken an 85 percent hit, and the list goes on similarly, ad infinitum, for all of the hospitality and commercial business sector.
In fact, it was Marriott’s Chief Executive, Arnie Sorensen, who was quoted in the Wall Street Journal this month, expressing his concerns for the meaning of this behavior.
“We too often see [big companies] making decisions about keeping offices closed for as much as the next year – [which is] frustrating to us because, in a sense, that’s just sort of withdrawing from the economy,” said Sorensen.
No matter the entity, everyone taking part in the larger economy of services, (which makes up 70 percent of GDP) is going to have to rethink their strategy to pivot from the fallout of the pandemic.
Still, overarching decisions like that which Google has made, to remain closed for potentially another year, are making this perspective difficult to hold!
Money velocity and consumer spending has reversed trend to heavily favor spending on goods rather than services, while a stable backstop is yet to be put in place for displaced workers. With this all said, however, you may be surprised to hear that all I can see amounting from these factors is opportunity. As Confucius said, “our greatest glory is not in never failing, but in rising every time we fall” like a Phoenix from the ashes.
Ultimately, these are times which will shape a new generation of business acumen. It is no secret that the aftereffects of COVID-19 will likely not be known for some time, as we have yet to sort through the current systemic damage to the economy.
I’ll have you consider another staggering scene of miles long Food Bank lines in Texas. This is a less than subtle indicator that the wealth and income gap has never been more apparent in this country, and that such a core human problem as hunger is now an unpalatable reality, with “bread lines” forming as phenomena that span multiple states.
Unfortunately, for even my own business, the behavior witnessed doesn’t bode well for a return to normal anytime soon. But, what does “parking space” have to do with a hunger crisis? Not much at a glance, but I am thinking more outside the box these days in terms of adding value.
Consequently, the unused capacity in parking is something we have been able to - at ACE - “give back” in a time where compassion is needed most, by providing many of our lots as COVID testing centers so people in the areas we serve can access a crucial examination more readily.
Now, these actions won’t kick-start the revenue wheel, but it has built my resolve in respect to my balance sheet in ways where my thoughts toward it are seeking to leverage returns that went unsought prior to the pandemic.
What I am getting at is, thinking this way has led me to discover a movement of urban gardening firing up across the U.S. which provides tremendous hope for finding a balance between meeting core community needs and assisting to resurrect the greater economy.
Consider the unused tax incentives afforded to urban farming efforts in LA and the benefits that could be rendered if maximized.
Used efficiently, I can very easily see how the tax benefit can be used as part of a broader strategy to turn the ship around.
The capacity consequences which the commercial sector imminently faces become much less daunting when I consider how I might use a policy that is already in place to find a win/win solution that helps my company survive and provides service to the community all at once.
All things considered, the harsh reality is that speculating on anything beyond the immensity of the personal financial consequences that face the average person day to day, it is understandably hard for most to devote any mental capacity to the meaning of the problems of the commercial sector.
However, with a bit of creativity, fortunes can be turned to benefit those who need it most while also helping contribute to a “new normal”.
We all face a tremendous ‘head wind’ to recovery because of overarching decisions of the biggest corporations to sway participation in the economy to a crawl.
However, perhaps with a slight shift in thinking we can collectively adopt a mindset of how we get from Today, to Tomorrow and ultimately to ‘Tomorrowland’.