Businesses in downtown San Jose want students back
July 1, 2021
Students return to campus at San José State University this fall, and they could bring with them the city’s economic recovery.
A recent study shows that the university, before the pandemic, generated $ 776 million in economic output per year for San Jose and $ 2.4 billion for the Bay Area. This disappeared with the onset of the pandemic and the shutdown of most in-person functions.
The study, commissioned by the university and produced by a Los Angeles-based research company Flagship economy, also calculated that the university’s economic impact reaches $ 4.1 billion when considering its statewide reach.
The school’s student body totals over 36,000 people and the university employs over 3,500 workers. When fully occupied, the school’s dormitories are home to more than 4,200 students, with thousands more living nearby. All of this means more local expenses.
Small businesses lost millions of dollars during the pandemic, and many have filed for bankruptcy and closed altogether. According to county numbers released in february, 2,600 restaurants temporarily closed in Santa Clara County, while 1,000 others have closed permanently.
Businesses located in downtown San Jose were no exception.
Randy Musterer, restaurant owner Sushi Confidential, minutes from the heart of the college campus, said not only did it miss its student base, but students also made up a large portion of its workforce. Without them, it was even more difficult to hire enough staff to stay open.
“We are definitely feeling the effect of the absence of students,” Musterer told the San José Spotlight. “Right now it’s extremely difficult to hire employees, and a large portion of our employees came from the state of San Jose”.
The majority of students are on summer vacation, but thousands of people will flood the city in August for the start of the school year.
“We are looking forward to August and September when the students return and we will try to hire more staff so that we can stay open later,” said Musterer. His restaurant closes an hour or two earlier each evening than before the pandemic. “And in turn, (we can’t wait) for all the students to come and support all the local businesses.”
But it’s not just the hiring pool, it’s also the atmosphere that the students bring.
“They bring an energetic and fun environment and culture,” said Musterer. “They also contribute to the diversity downtown… that’s all the things that are missing right now.”
University president Mary Papazian made a similar point in a June blog post.
“Our local businesses are thriving, our arts districts are crackling and our civic pride is growing, all thanks to the tens of thousands of students, staff, faculty and other supporters and stakeholders of the university who populate and visit our campus, ”Papazian wrote.
The results were presented to San Jose City Council in June in a downtown status report as “positive news” for the city and in particular the downtown area.
Sales tax revenue across the city declined by around 20% during the pandemic, but the city center was hit even more, losing around 50% of its sales tax revenue, Blage Zelalich said, downtown manager of the city.
The decrease is linked to the loss of conventions, downtown office workers, visitors and tourists, and the university. But the impact of having 36,000 students and nearly 4,000 teachers downtown, compared to their absence, is enormous.
“The state of San Jose has a significant impact on the downtown area,” Zelalich said. “We are very lucky to have such a large university (as it is)… We are fortunate to have this urban university where there is a huge commitment between the university leadership and the management of San Jose to continue to … Work more closely than in the past. “
Zelalich said the city was working with the university in August to create “welcome week” events for students returning to campus or arriving for the first time.
“(This is) for the students to know that downtown is also their neighborhood, and also for them to get to know some of the businesses that they haven’t been to for about a year,” Zelalich said.
It’s unclear how big the fall boom will be – students need to be fully vaccinated before walking on the campus. And while freshmen are normally required to live on campus in school residences, it’s unclear when this requirement will be reinstated.
“The requirement was suspended last year and will also be suspended next year,” Kenneth Mashinchi, spokesperson for the university, told the San José Spotlight. “A decision has yet to be made on whether to reinstate the requirement for fall 2022.”
Student spending accounted for a third of the university’s local economic contribution, according to the study. The school also indirectly supports nearly 1,300 additional jobs across the city through its economic activity, including hospitality, groceries, entertainment, recreation and personal shopping.
A bustling university also supports local government through tax revenue.
SJSU-related spending generated more than $ 606 million in state, local and federal tax revenue in 2018-19. Sales tax alone, generated by spending by students, staff and visitors, mostly in the downtown area, generated $ 89.7 million, or about 14.8% of all taxes related to businesses. universities. “
“Cities are important, we know, because they provide fertile ground for creativity, art, innovative thinking and the exchange of ideas and cultures that lead to positive transformation,” Papazian wrote in his blog post. “Every major urban university, including the State of San Jose, needs to be surrounded by a great city, and we are thrilled to be a part of the great city of San Jose to help us achieve our collective goals. “
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