Lexington prepares for major cut in tax revenue as local businesses shutter

A few restaurants still offer curbside pick-up or delivery


April 12, 2020: Easter Sunday in Lexington. Photo by Hannah Denham.

Jin Ni

Looking at Lexington, it’s hard to tell that something is wrong. The birds are chirping, cherry blossoms are in bloom and temperatures soar into the 70s and 80s.

But the parks are empty. Washington and Lee University’s picturesque Colonnade is vacant of any students lounging in the sun, reading or socializing. On Lexington’s historic Main Street, many of the shops are closed until further notice.

The closure of many popular restaurants and hotels will reduce the city’s collection of meal and lodging taxes, which will impact its budget for fiscal year 2021.

It’s been nearly a month since Washington and Lee, Virginia Military Institute and Southern Virginia University moved classes online and sent students home.

It’s also been three weeks since the Lexington City Council declared a state of emergency and the Virginia Department of Health confirmed the first case of COVID-19 in Rockbridge County.

Lexington City Manager Jim Halasz said that the emergency declaration didn’t change the situation dramatically. The city council didn’t impose any regulations on businesses, besides closing childcare and daycare centers.

The order is still in place, with the exception of childcare centers staying open for the children of emergency responders and essential workers.

According to the Virginia Department of Health, as of April 12, there are 10 confirmed cases of COVID-19 in the local area: three in Lexington, four in Buena Vista and three in Rockbridge County.

The combination of stay-at home orders from Gov. Ralph Northam and limits on gatherings of more than 10 people has led to temporary closures or reduced hours for many local businesses.

Heliotrope Brewery, which serves artisan brews and pizzas, is now only open on Wednesdays through Sundays from 4 p.m. to 8 p.m. The brewery has closed its dining room to customers and only accepts delivery or curbside takeout orders. Payments are completely contactless, with customers ordering and paying with credit cards over the phone.

Heliotrope Brewery moved to delivery and takeout only. Photo by Hannah Denham.

“We’re lucky to have a pretty constant crowd,” Heliotrope Sous Chef Lucas Bergmann said in a phone interview. “Some days it seems pretty busy, but it’s different from day to day. But we’re doing good business. Better than we expected.”

Bergmann said he believes Heliotrope’s success could have to do with many other restaurants in Lexington closing down altogether.

“We’re grateful to still be open,” Bergmann said. “And because we’re preparing food and serving it to the community, we take their health and safety very seriously.”

Bergmann said the kitchen staff goes through two to three boxes of gloves every day. Delivery drivers have to wear and change gloves any time they touch anything new outside of Heliotrope, and door handles to the brewery and cars used for delivery are sanitized hourly.

Other restaurants that are still operating include Napa Thai, Pure Eats, Brew Ridge Taps and Domino’s Pizza.

Napa Thai is open from 4 p.m. to 8:30 p.m. seven days a week, and offers only takeout and delivery. A transparent barrier between the cash register and the customer now exists, and all employees wear masks and gloves while working. The restaurant calls customers when their takeout order is ready to purchase and pick up inside.

Pure Eats is open from 8 a.m. to 2 p.m. Monday through Thursday and from 8 a.m. to 8 p.m. Friday through Sunday, according to their voicemail. They offer both delivery and takeout during these hours.

The Lexington Farmer’s Market is open from 8 a.m. to 12:30 p.m. Last week, the farmer’s market created a website for some farm vendors to offer produce, meat and other items for pick-up and delivery.

Blue Sky Bakery, Sweet Treats, Golden Garden, Salerno’s and Taps did not respond to requests for comment.

Many restaurants and businesses in downtown Lexington have posted handmade signs in response to the impact of the coronavirus, like Sweet Treats Bakery. Photo by Hannah Denham.
Many restaurants and businesses in downtown Lexington have posted handmade signs in response to the impact of the coronavirus, like Earth, Fire & Spirit Pottery. Photo by Hannah Denham.

Halasz said reduced business hours and closed shops have cut down on the city’s tax revenue.

“We’ve seen a reduction in our revenue as restaurants and hotels close down, since we get a lot of it from meal and lodging taxes,” he said.

Halasz said in an email that the city originally expected to collect $920,000 from the meals and lodging tax between March and July 2020.

But based on calculations and estimates as of April 7, Halasz said Lexington stands to lose about two-thirds of that projected revenue.

“We’ve had to cut $600,000 out of our current fiscal year budget and recalculate the budget for [fiscal year 2021],” Halasz said. “We’ve cut nearly $1 million out of [fiscal year 2021’s] budget after accounting for revenue losses and cuts in city budgets and activities depending on the severity and length of the COVID-19 outbreak locally.”

Lexington is “on heightened alert,” Halasz said in a phone interview, adding that the city has increased staffing with emergency response teams and management services.

“We’re working with the [Virginia Department of Health] and local health department to provide health guidance and develop medical care based on our community needs,” he said. “But we don’t anticipate any problems in the community.”

Handmade signs to the community are posted in various shops in downtown Lexington. Photo by Hannah Denham.
Handmade signs to the community are posted in various shops in downtown Lexington. Photo by Hannah Denham.