Small town Preston, Minn., battles to overcome the economic impact of COVID-19

PRESTON, Minn. — Nearly six months after Gov. Tim Walz first closed bars and restaurants in Minnesota, the threat of another shutdown is what worries Andy Besik most.

"The hard part is just the constant not knowing what’s going to happen next week," said Besik, who for the last year has co-owned Trout City Brewing in Preston, Minn., along with his wife, Anita Besik. "The rumor's bars and restaurants will be shut down again. The idea that’s what’s going to happen."

The Besiks are among those who answered a business survey in Preston conducted by Community and Economic Development Associates. That survey, which was sent to 75 businesses in Preston and answered by 34, shows a community that has weathered the storm of COVID-19 thus far but worries what might happen next.

"All of our businesses reopened," said Cathy Enerson, a CEDA business development specialist and Preston's Economic Development Authority director.

Enerson said a big part of the success has been loan and grant programs — everything from the federal Paycheck Protection Program to an EDA loan fund and DEED grants from the state of Minnesota — have helped keep businesses afloat and, in a few cases, even take the slowdown as an opportunity to expand.

However, according to the survey, a second shutdown would certainly kill off a handful of businesses in the town of about 1,300 people.

"A lot of businesses have used up their slush funds," Besik said. "Right now, they are riding right on the edge."

Besik said the brewery and pub he runs might be able to weather a second shutdown — "People still drink beer," he said — but it would depend on how long that shutdown might last.

"The trust factor for government has gone out the door," he said.

Besik added that while he has avoided things like PPP loans, he did apply for some CARES Act funding through the county to offset some of the impact of the pandemic.

Linda Mathison, however, has used a couple of programs to keep her fitness center business running, including a small Economic Injury Disaster Loans grant. She also received a zero percent Department of Employment and Economic Development loan to help pay her mortgage on three building loans — for fitness centers in Harmony, Spring Valley and Preston — as well as help pay utilities.

But when her business was shut down in March, there was a period of worry that all she'd worked to build would be gone.

"We’ve lost some members," Mathison said. "But the community's been great, and there are people who are still supporting us even if they're not coming in."

Part of Mathison's recipe for survival has been people coming in who needed physical therapy even if her business, Fit Express, was closed to the general public. Still, members older than 65 have been reduced by two-thirds compared to a year ago or before the March shutdown.

While she can open to 25% capacity now, many people who are immune compromised are not coming to Fit Express, even though exercise and maintaining their strength are key to remaining healthy, Mathison said.

"I hear people say, 'I could do things at home,' but it’s not the same," she said.

And the possibility of another shutdown causes her panic.

"When you shut down, people get out of the habit of coming," Mathison said. "It’d be devastating."

Keeping businesses open in Preston has been a concerted, joint effort, said Mary Schwarz, vice president and lender at F&M Bank. The bank has helped businesses with PPP loans and worked with CEDA, the Preston Chamber of Commerce and the city to educate businesses on programs that can help them get through the pandemic. But it's been hard.

Schwarz noted that many of the programs designed to help businesses have been changing as they are rolled out, making it hard for business owners to decide if a particular program is right for them.

"Things were changing through that process, and things still can change," Schwarz said.

In the end, it's important to keep businesses open so small towns don't die off due to COVID-19.

"We want to see all these businesses survive through this," Schwarz said. "It affects our whole community if they don't."