A Resilient Approach to COVID-19 Economic Recovery

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A Resilient Approach to COVID-19 Economic Recovery

R. Michael Goman, Principal of Goman+York Property Advisors, LLC

The challenge

As of March, many of us were thinking that we’d just about seen everything. After all, if you’ve been in commercial real estate or economic development for any length of time, you’ve probably seen several economic downturns and innumerable business bankruptcies, as well as floods, fires, power outages and the various impacts of extreme weather events. Despite all that experience, none of it prepared us for the impact of Covid-19.

And now, even after being immersed in all things Covid-19 for several months, there is still much that we don’t know. In our advisory practice, our clients regularly ask how they should respond to this pandemic and the one thing we do know is that there is no simple one-size-fits-all answer.

What can be done?

Despite the continuing uncertainty, we know there are specific steps that should be taken and which, if implemented, will facilitate the creation and implementation of a workable plan. The steps are simple: figure out where you are today, decide where you want to be and then develop an action plan aimed at getting you there. While the steps are simple, implementing them requires a substantial amount of detailed work, the engagement of a lot of talented and experienced people from your company and/or community, and some skilled leadership.

The solution

Objectively determining where you are today involves an in-depth updating and analysis of the key metrics that you routinely use to evaluate your organization, plus the development of some new ones. The goal here is to establish a thorough and accurate baseline of what’s going on in your organization. In a community, this includes performing a sector-by-sector (office, retail, industrial, medical office, warehouse, restaurant, hotel and residential) analysis of building occupancy, vacancies and activity in each economic node in your community, as well as conducting interviews with key employers and generators of economic activity to gauge their outlook for their business over the expected period, in this case, through to the end of next year.

Once armed with that information, the next task is to agree on where you want to be at different stages over that time. This is essentially a process of setting goals and objectives, but it’s important to acknowledge that two over-arching issues will impact your work in this regard. The first is simply achieving consensus, which is challenging in the best of times and has become uniquely difficult in the current circumstances, and the second is that the goals and objectives have to be realistic. In our advisory work, we view goals as aspirational, thematic statements regarding what success looks like. We define objectives as the specific metrics we’ll use to assess how we’re doing along the way and how we’ll know whether or not we’ve succeeded. It’s important to keep all of this manageable, so we recommend keeping the goals to no more than 3 to 5 and the objectives to no more than 2 to 3 for each goal. Too many goals and objectives can make communication too complicated and the required focus can be diminished or lost altogether.

A few additional thoughts about goal setting. First, be willing to be a little creative, remembering that extraordinary times require an extraordinary response. Second, be agile – revisit your goals and objectives periodically and update them as warranted. Third, don’t let the perfect become the enemy of the good. The important thing is to begin the necessary work and then adjust as conditions and information warrant.

Lastly, we need actual implementable tasks that can incrementally move the organization, whether it’s a company or community, toward your goals and objectives. Avoid adopting feel-good tasks that sound great, but which are vague and immeasurable. We like to see very specific tasks that include both the complex and the routine. For example, in our firm, we’re advocates of temporary property tax incentives and abatements as well as using fundamental tools such as holding regular meetings with your recovery team and maintaining regular personal contact with your local businesses. We also think that the current environment presents a unique opportunity for communities to streamline their regulatory environment and we encourage our clients to look at the work done in British Columbia, Idaho and Missouri. For a good article on regulatory exemptions for small businesses, see Mercatus’ work on Regulatory exemptions that could be key helping small businesses during and after Covid.

Conclusion

The current times are likely to be the most challenging any of us will face in our lifetime. We need to be creative and agile, but we will benefit by creating and then following an organized plan which is kept current and which is implemented and monitored by a capable and focused team.

To borrow a quote from from John Locke, the 17th-century British philosopher and physician, “all knowledge is derived from experience.” In these highly uncertain times, our experience tells us two things. The first is that whatever plan is initially put together, the final version is likely to look much different, and that’s OK. The second is that we will learn much from this experience, and ultimately will emerge stronger and better positioned than ever before.