Here’s a COVID quiz:
Should you obey the law and go broke?
Or flout the rules and profit — even if it spreads the virus?
Many small businesses are facing this dangerous pop quiz, thanks to the state’s complicated, largely unenforced rules governing high risk businesses like gyms and bars. The rules, the viral unknowns and the lack of enforcement have created a welter of winners and losers.
And now Gwen and James Zorn are starting to think they’ll end up as one of the law-abiding losers, as they scramble from one bureaucracy to the next, trying to save their Payson gym.
They have closed their gym in compliance with state orders. And yet, nearby gyms have remained open — with no apparent consequence.
They’ve navigated a bewildering bureaucratic runaround, only to find the health department won’t give them a waiver and the police department won’t enforce the regulations, leaving them with the rent piling up as they lose their customers to competitors.
In the meantime, Republicans and Democrats have deadlocked on whether to offer a fresh round of business bailouts that have kept the Zorns from going broke so far.
What a mess. It’s a story of good intentions and hard realities in a head-on crash, with fatal consequences for many small businesses.
How did this happen?
All “non-essential” businesses closed down back in April when Gov. Doug Ducey issued his first stay-at-home order. When the percentage of positive tests dropped, Arizona lifted most restrictions. This fueled a second outbreak that for a time left Arizona with one of the worst outbreaks in the country. This prompted the governor to issue new restrictions, this time mostly aimed at big gatherings, crowd-creating events and certain businesses considered high risk.
The order targeted businesses that normally produce crowds of people sharing the same air — including theaters, water parks, indoor gyms and fitness centers. Those businesses couldn’t open at all until the county hit certain benchmarks. Even then, they must operate in ways that would reduce the risk of spreading the virus.
Several businesses — including a Phoenix gym — filed a lawsuit against Ducey and the Arizona Department of Health Services. The lawsuit claimed the state had engaged in “subjective enforcement” that forced his business to close — while restaurants remained open.
The judge ruled that the state must give these businesses an opportunity to re-open in a way that would protect the public.
In response, the ADHS created a system of benchmarks in mid-August, to determine the level of viral spread in each community. Once the benchmarks showed “moderate” spread of the virus, the high risk businesses could reopen with certain restrictions.
The benchmarks that measure the presence of the virus include a two-week decline in the percentage of positive tests, the infection rate and hospital visits for COVID-19 symptoms.
Gila County is not there yet
Gila County has not met those ADHS benchmarks, to the frustration of the Zorns, franchisees of Anytime Fitness. This week, only Gila, Graham and Yuma counties still have such widespread infection rates that gyms and bars that don’t serve food can’t open at all.
Every day the Zorns open up the state’s attestation page to see if they can re-open, studying infection, test and hospitalization rates.
Each day the message has popped up to say, “You are in a county with COVID-19 transmission level that does not make your establishment eligible to reopen at this time,” said Gwen.
Each day pushes the Zorns closer to bankruptcy, for their franchise won’t let them out of the franchise fees, without a five-figure payment.
But the fees aren’t the only monthly expense.
“Our average monthly expenses are $6,200 and rent is $8,600 all on its own,” said James.
Those totals do not include payroll. They had to let all of their employees go by the end of August. The federal CARES Act PPP loan had helped for awhile, but that has run out. House Democrats passed a $3 trillion extension and Senate Republicans countered with a $1 trillion alternative. The two sides broke off negotiations on a compromise and have now hit the campaign trail.
Now they’re just hoping they’ll get the open up order before they suffer the same fate as fellow gym owner Debbie Neckel from Tears of Steel.
Neckel, who had a career in law enforcement, opened her business six weeks before the first closure order. She survived the first shutdown, but not the second.
“I think that I have cried all the tears, but who knows,” said Neckel. “I had to go through that and let it go. It was a dream. Here I am ... I am going to cry,” she said with a catch in her throat.
Adding insult to injury
What really galled both gym owners — three local gyms not only remain open, but one celebrated a grand opening in the middle of the governor’s closure order.
As the two gym owners sat in their empty gyms, they watched as their customers joined the gyms that defied the closure order.
“We know from watching Facebook former members are going there because it’s open,” said James.
But Neckel said, “I kinda sorta believe in the law” so she followed the order.
“But I guess enforcement was never part of the governor’s order,” she said.
Neckel just wanted a fair chance.
“I want to make it clear that I don’t wish anyone going out of business, especially not the new gym,” she said, “(but) to lose the money we have lost, which is our life savings, there needs to be a level playing field.”
The Zorns face the added need to keep the Anytime Fitness franchise happy. That means they must follow the letter of the law to protect the franchise. But if they fold, they are on the hook for thousands of dollars.
“Our franchise has been very clear we risk internal fines and penalties if we do not pay,” said James.
So they scrape by from one week to the next, staving off bankruptcy.
Who will enforce the public health order?
The closure has to do with public health, so it would seem the Gila County Health and Emergency Management Department would enforce the closure of businesses that violated the state order.
Not so, said Gila County Health Director Michael O’Driscoll.
“That would be a question for the Town of Payson Police (because) the executive order states local jurisdiction is responsible for enforcement,” he said in an email.
Payson Chief Ron Tischer agreed that the local police department can enforce the laws, but relies on “voluntary compliance.”
He said his officers “have been extremely busy lately” with calls, including calls in which people are arguing over wearing a mask, or not wearing a mask as well as what constitutes social distancing.
“We prioritize all complaints, but there are times we just do not have the manpower to investigate these types of complaints,” he said.
That said, he sympathizes with the Zorns.
“As the police department, we feel it is one of our responsibilities to help businesses thrive in town,” he said. “The last thing this town needs is for any business to close up shop.”
At the same time, he has no interest in issuing $2,500 misdemeanor fines to small-business owners.
He said he hopes the town will either meet the criteria for reopening or the gym will get a waiver from the state. But “who knows with this pandemic,” he wrote in an email.
The state’s response
The state has set up a system so businesses can apply for waivers to reopen.
That didn’t work either, said Gwen. When she applied for a waiver she told the state, “We have five sanitizing stations, we have moved cardio equipment to be 6 feet apart, we have moved strength-training equipment to be 6 feet apart, we have signs in every restroom per the CDC, we had limited our 5,000 square feet to only 10 individuals in the gym per hour including staff, we encouraged face masks, hand washing, etc.”
Still the state rejected the requested waiver.
“Your application failed to provide proof that your business has taken or will take such extra steps, beyond those required, as necessary to operate safely,” explained ADHS in its denial to her application.
Gwen intends to apply again.
And in the meantime, she checks the county’s benchmarks every morning.
“Liberty and justice for all doesn’t seem to apply to gym owners in Payson,” she said ruefully.