Carnival of Soul

Helena-West Helena and surrounding Phillips County should be bustling this week in preparation for the King Biscuit Blues Festival, a four-day celebration that honors the rich contribution the blues have made to the region and that has showcased the community since 1986.

There is no cause for joy this year with the cancellation of the festival and only the pandemic blues hang over the area, leaving the Delta community to grapple with an economic crisis that swept in suddenly and likely will take years to overcome.

Covid-19 is hammering the 25 counties that make up the Arkansas Delta, one of the poorest and most economically depressed regions in the nation before the coronavirus-driven recession began in the spring.

“The Delta was already hurting and it didn’t take much to push things over the edge,” said Helena Mayor Kevin Smith. “A lot of people live payroll to payroll, and when those paychecks stop, it doesn’t take long for things to get desperate fast.”

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Unemployment is bloated, small businesses are scrapping to survive and thousands of Delta residents are relying on food banks to feed their families. The Arkansas Delta includes the counties that hug the Mississippi River and extends to include Pine Bluff and economically distressed areas in Pulaski County and east Little Rock.

“This pandemic is unique because it’s been such a sharp decline and the Delta was in bad shape before this happened,” said Lee Powell, head of the Delta Grassroots Caucus. “It’s a disturbing situation.”

Helena would typically attract at least 20,000 visitors — double the city’s population — for the King Biscuit festival, which was scheduled to begin Wednesday. The event has been the busiest time of year for hotels, restaurants and other service industries that relied on the festival to boost revenue for the year.

Edwardian Inn owner Robert Cheek would normally be welcoming guests – some from across the globe — to his 10-room bed-and-breakfast. They would pay a premium to stay at the 100-year-old inn for the added pleasure of a short stroll to the King Biscuit festival. This year, he’s dealing with a more challenging issue — cancellations.

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“When covid hit, everyone started to panic and cancel bookings,” Cheek said. “We had a full year of bookings and deposits that just cleared out.”

Business is down by half at the Edwardian and bookings are difficult to come by.

“October would normally be the high time for us,” Cheek added. “The blues fest is the absolute peak of the year for business.”

He has only two rooms booked for the week when typically there would be a waiting list and more requests than rooms availability. And the inn would be able to charge an above-market premium.

“We can charge a special rate for the blues fest because of the demand, but it all kind of just disappeared,” he added. “We’ve lost a tremendous amount of business.”

The losses are substantial for a small business with razor-thin margins.

In October 2018, the Edwardian Inn booked $14,000 in sales and in 2019, sales were $16,000, according to Cheek. This year, he has about $8,000 in bookings scheduled in October.

Gallery: Delta

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Like Cheek, salon owner Detria Stackhouse’s business has been cut in half because of the pandemic. Stack’s Hair Affair on Oakland Avenue is empty most days and has suffered from the loss of events that normally would have customers filling the chairs: graduations, football games, dances and parties.

“We’ve lost a lot of our older clients and a lot of people are just afraid to come in, especially with the number of cases going back up,” Stackhouse said. “Our business is just continuing to go down.”

HIGH UNEMPLOYMENT

Job losses are especially high in the Arkansas Delta. “It’s clear that the highest unemployment rates in the state are concentrated in the Delta region,” said Michael Pakko, chief economist with the Arkansas Economic Development Institute.

In August, Chicot County retained its position with the state’s highest unemployment rate at 12.5%. The unemployment rate in Phillips County was 10.6%, compared with a statewide rate of 7.1%. Other Delta counties with double-digit jobless rates include Crittenden at 10.9%, Mississippi at 10.8% and Ashley at 10.6%.

Even more, the region has suffered larger job losses from February to August — the period that demonstrates the pandemic’s economic devastation — than other parts of Arkansas.

Statewide, net increases in unemployment rates for the period have ranged from 1-3 points, according to Pakko. Net increases have been greater in the Delta: Mississippi County is up 4.8 points while Desha County is up 3.9 points; St. Francis and Chicot both were up 3.8 and Phillips increased 3.4, according to Pakko.

“Unemployment rates tended to be higher in the Delta region than other parts of the state before covid-19, so it is perhaps not surprising that they remain above rates in other regions,” Pakko said. “But there also appears to be a general pattern of unemployment rates remaining high in the Delta while falling back toward full-employment in other parts of the state.”

And job losses hurt businesses like Stackhouse’s hair salon that are still open and ready to take clients, but few in the community have the disposable income to pay for the service.

“We were excited to come back to work but our clients are not coming back,” she said. “A lot of people in this area are still not working and they don’t have the money to spend. Everybody in the community is suffering from the pandemic.”

State and federal loan programs have helped though they aren’t enough to compensate for the severe revenue declines.

Both Stackhouse and Cheek received loans under the federal Paycheck Protection Program, but just enough to cover some basic expenses. Stackhouse received $2,000 from Southern Bancorp and Cheek received less than $5,000 through the program.

“We used the money to basically pay bills and to buy some protective equipment,” Stackhouse said. “We were able to survive off it but we’re going to need more help.”

In addition to the federal stimulus, Cheek received a small loan from the state’s Quick Action Bridge Loan program, which was established to help small businesses remain afloat while they were awaiting federal aid.

“Those programs were helpful but it doesn’t make up for the lost revenue,” Cheek added. “But in terms of providing me with crucial liquidity in key moments, the programs absolutely were very successful.”

Southern Bancorp, which supports underserved Delta communities, has provided 388 paycheck protection loans valued at $42 million to small businesses in the 25 Arkansas Delta counties, the bank said.

And Southern also raised $100,000 to provide grants to businesses that were not eligible for federal paycheck loans, according to Chief Executive Officer Darrin Williams, who says the financial aid has helped.

“It was meaningful,” Williams said. “People were able to keep the lights on and buy groceries.”

The bank provided the business continuity grants in Delta communities that were identified as suffering the most by the covid vulnerability index maintained by the Surgo Foundation.

The index identifies communities across the nation that are most vulnerable and will take longer to recover from the pandemic. It relies on factors such as economic status, transportation, employment and educational attainment to rank local areas and states on a scale of 1-10, with 10 being those most in need.

Arkansas ranks third-worst in the nation with a score of 9.6, and the Delta region has the worst scores in the state, according to the index.

Chicot, Desha and Monroe counties scored a 9.9; Mississippi County registered 9.8; Lee County was 9.6; and Phillips County scored a 9.4.

By comparison, Boone and Baxter counties in the hill country scored 2.3 on the index while the prosperous northwest corner, Benton and Washington counties, had vulnerability scores of around 5. Pulaski County scored 5.2 on the index scale.

FOOD IN DEMAND

Business declines and job losses are sending more Delta families to food banks for help, overwhelming their ability to meet all needs.

In Marianna, the Delta Dream Ministry’s food pantry has seen an exponential increase in its efforts to meet nutritional needs, according to Evelyn Shackelford, who helps lead the outreach to residents in Lee, Phillips and St. Francis counties.

Before the pandemic hit, the ministry was serving about 300 families a month. Now, the food pantry opens three days a week and gives away about 500 food kits each day.

“And we still run out of food every time, there’s just not enough to go around,” Shackelford added. “We have people lining up at 6:30 in the morning every time and we don’t start until 10.”

There have been some unexpected bright spots. In Helena and Phillips County, for example, tax revenue is higher than forecast and officials attribute that to a boost in online sales — increases that also are a likely result of the coronavirus.

The city and county had forecast a tax-revenue increase of about $70,000 for the year from the internet sales tax approved by the Legislature. So far this year, revenue from the tax is $155,000, according to Treasurer Derrick Turner.

“There are a lot of people staying home because of the virus and they’re ordering more online,” Turner said.

Arkansas’ Delta communities are ill-equipped to sustain more losses, according to officials familiar with the area. Delta communities are hit harder when a businesses closes and the shutdowns leave residents with few options.

“Small businesses are so important to the Delta,” said Williams of Southern Bancorp. “One business closing has a much larger impact in Helena, Ark., than it does in Little Rock, Ark.”

Covid is likely to linger in the state, and the Delta, for months to come.

The White House reported Tuesday that Arkansas had 194 new cases per 100,000 population in the past week. That compares with the national average of 93 new cases per 100,000 and ranks Arkansas with the seventh-worst rate in the country.

“It’s almost like being in the Twilight Zone,” said Harvey Joe Sanner, a Delta Grassroots Caucus leader who lives in Des Arc. “Everybody is scared because things don’t seem to be getting any better. The covid numbers keep going up and we’re all worried as hell about what’s going to happen next.”