Mayor Ron Anders and the Auburn City Council met online Thursday to approve helping struggling city businesses to secure bridge loans to keep their lights on and doors open in the time of COVID-19.
Under the approved plan, seven local banks — Auburn Bank, BancorpSouth, BBVA, MAX Credit Union, Regions River Bank & Trust and Southern States Bank — are committing $500,000 each in loan authority and agreeing to cap interest at 4 percent on three-year loans up to $25,000. The businesses must be within Auburn’s city limits.
In exchange, the city will cover interest payments on those loans for three years — which works out to around $1,000 per year on a three-year, $25,000 note.
Councilman Brett Smith asked if the city was guaranteeing the loans. City Manager Jim Buston assured him the city’s only obligation on each note would be to make the interest payments — directly to the banks — as long as the borrowers are making the principal payments. Should a borrower default on their loan, the city is not obligated to keep paying interest, Buston said.
The slump in downtown Auburn is severe, with business off as much as 80 percent for some shop owners since Auburn University closed its campus to students earlier this month.
“It makes me want to throw up every day,” said Shelby Cohan, general manager of Charming Oaks, located at 123 N. College Ave. “It is so scary now.”
Cohan is coping much as her neighbors along College and Magnolia streets are. She cut hours, took hourly employees off the schedule, stepped up promotions on social media and has cut way back on stocking new inventory.
The period between spring break and graduation is usually busy all along College and Magnolia avenues, with students, high school seniors with their parents, Auburn University baseball fans and others in town.
“I usually have 18 employees and now I’m down to five,” said Michael Overstreet, who has managed Toomer’s Drugs for 20 years. “Honestly, we’re at about 15-20 percent of where we would normally be.”
Renee Hamby, manager of Wrapsody at 112 N. College Ave., said her shop is doing more delivery, curb side and online business, and that her vendors have been good to work with so far.
Downtown merchants welcome the effort shown by the city and the Auburn Chamber, and they’ve banded together themselves to promote #KeepAuburnRolling, a social media effort to get locals to show their support of downtown businesses. Shoppers should post pictures showing their support for downtown and include the hashtag. One lucky winner each week will get a $100 gift card to a local business.
The consensus along College and Magnolia avenues seems to be to try whatever one can think of and see if it works.
“I feel supported by the city and the Auburn Chamber,” said Doug Caldwell, who manages The Locker Room at 175 E. Magnolia Ave. “But honestly, there’s not much they or we can do” except try to ride out the deep slump.
Cohan, for her part, said she misses the people as much as the ringing cash register. “I miss my customers coming in and telling me how they did on a test, how their date went last weekend,” said Cohan, who has operated Charming Oaks for 4 years. “My favorite thing is to sit in the dressing room and dress some girl and see how it makes her feel better about herself. I really, really miss that.”