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Houston small businesses and landlords grapple with rent relief options during COVID-19 crisis

Houston small businesses are struggling to pay their rent with doors closed and operations ceased — but where should the relief come from? Getty Images

It's not too huge of an assumption to make that many Houston startups and small businesses failed to pay their rents in full yesterday. Since the city's stay-at-home mandate on March 24 — and even preceding that — most businesses have seen a slowdown of revenue as a result of COVID-19-caused business disruptions.

Business owners are frantically looking in their leases and searching online to see what rights they have and what sort of protection they have in such an unprecedented time.

"People are confused. They don't know what to do, and finding information is hard," says Meredith Wheeler, co-founder and chief creative officer of Sesh Coworking, which opened earlier this year.

Wheeler and Sesh's co-founder, Maggie Segrich, have created a petition to get on the radar of local elected officials to challenge them to pass legislation to protect small businesses in this time.

"At the end of the day, it would be so wonderful and idealistic to say that we could rely on the niceties and the moral compasses of our landlords, but it's probably not true for everyone and so that's why we need legislation to dictate what is right," Wheeler says.

But landlords are also in unchartered territory, says Josh Feinberg, who has worked in Houston as a commercial real estate broker and co-founded CRE tech platform, Tenavox.

"There's this idea that there's this acrimony between tenant and landlord, and I think, as a former broker, we're set up that way to get our side the best deal. But in reality, that's just not true," Feinberg says. "The majority of commercial real estate is owned by regular people — not usually some faceless, gigantic corporation."

And they have a piper to pay too, Feinberg adds. Ninety percent of CRE is owned by debt, he says. If the government steps in anywhere, it should be on the lender level, as well as creating some sort of tax relief.

"If there's any relief here, it's going to have to come from lenders, and I think you'd hear that from owners and brokers," Feinberg says.

In somewhat convenient timing, Tenavox has recently co-founded a new company that provides a bit of a solution for small businesses. Otso provides landlords with an alternative to cash security deposits. Traditionally, deposits are held onto by landlords — they aren't legally allowed to spend it unless the tenant defaults.

"In general, I think cash deposits are wasteful," Feinberg says. "It's critical capital that the business can hire with, invest, and use."

Tenavox teamed up with Euler Hermes, a 135-year-old credit insurance company, to create Otso, and the credit company backs the lease performance of each tenant that is approved by Otso. The transaction calls for a fee added to the rent, but no large cash deposit would be required.

The tool can be used on new leases, and, in light of the current situation, Otso can also be used to create an addendum in existing leases so that the tenant can get back their deposit and use it in this time of crisis. Either landlord or tenant can apply online and hear back that same day — Feinberg says he's focused on a speedy response to help get this deposit money back to the tenant.

"If we can get some liquidity back into the hands of the business, they have some a better chance of survival," Feinberg says.

Other than looking into Otso, Feinberg has some other recommendations for small business owners. He says they should be applying for relief from the Small Business Administration, which has more money to dole out than they have ever had. And, as it pertains to working with their landlords, communication is key. Show financials and specific information — like what March 2019 looks like compared to 2020 — so that landlords can take that to their lenders.

"An unprecedented crisis is going to require unprecedented solutions," Feinberg says.

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A new AI-optimized COVID screening device, a free response resource, and more — here's your latest roundup of research news. Image via Getty Images

Researchers across the Houston area are working on COVID-19 innovations every day, and scientists are constantly finding new ways this disease is affecting humankind.

From a COVID breathalyzer to a new collaboration in Houston — here's your latest roundup of local coronavirus research news.

A&M System to collaborate on a COVID-19 breathalyzer

A prototype of the device will be used on the Texas A&M campus. Photo via tamu.edu

Researchers at Texas A&M University System are collaborating on a new device that uses artificial intelligence in a breathalyzer situation to detect whether individuals should be tested for COVID-19. The technology is being developed through a collaboration with Dallas-based company, Worlds Inc., and the U.S. Air Force.

The device is called Worlds Protect and a patient can use a disposable straw to blow into a copper inlet. In less than a minute, test results can be sent to the person's smartphone. Worlds Inc. co-founders Dave Copps and Chris Rohde envision Worlds Protect kiosks outside of highly populated areas to act as a screening process, according to a news release.

"People can walk up and, literally, just breathe into the device," says Rohde, president of Worlds Inc., in the release. "It's completely noninvasive. There's no amount of touching. And you quickly get a result. You get a yay or nay."

The university system has contributed $1 million in the project's development and is assisting Worlds Inc. with engineering and design, prototype building and the mapping of a commercial manufacturing process. According to the release, the plan was to test the prototypes will be tried out this fall on the Texas A&M campus.

"Getting tech innovations to market is one of our sweet spots," says John Sharp, chancellor of the Texas A&M System, in the release. "This breakthrough could have lasting impact on global public health."

Baylor College of Medicine researchers to determine cyclosporine’s role in treating hospitalized COVID-19 patients

BCM researchers are looking into the treatment effect of an existing drug on COVID-19 patients. Photo via BCM.edu

The Baylor College of Medicine has launched a randomized clinical trial to look into how the drug cyclosporine effects the prevention of disease progression in pre-ICU hospitalized COVID-19 patients. The drug has been used for about 40 years to prevent rejection of organ transplants and to treat patients with rheumatoid arthritis and psoriasis.

"The rationale is strong because the drug has a good safety profile, is expected to target the body's hyperimmune response to COVID and has been shown to directly inhibit human coronaviruses in the lab," says Dr. Bryan Burt, chief of thoracic surgery in the Michael E. DeBakey Department of Surgery at Baylor, says in a press release.

Burt initiated this trial and BCM is the primary site for the study, with some collaboration with Brigham and Women's. The hypothesis is that the drug will help prevent the cytokine storm that patients with COVID-19 experience that causes their health to decline rapidly, according to the release.

The study, which is funded by Novartis, plans to enroll 75 hospitalized COVID-19 patients at Baylor St. Luke's Medical Center who are not in the ICU. There will be an initial evaluation at six months but Burt expects to have the final study results in one year.

Rice launches expert group to help guide pandemic response

A new response team is emerging out of a collaboration led by Rice University. Photo courtesy of Rice

Rice University is collaborating with other Houston institutions to create the Biomedical Expert Panel, supported by Texas Policy Lab, to assist officials in long-term pandemic recovery.

"Not all agencies and decision-makers have an in-house epidemiologist or easy access to leaders in infectious disease, immunology and health communications," says Stephen Spann, chair of the panel and founding dean of the University of Houston College of Medicine, in a news release. "This panel is about equity. We must break out of our knowledge siloes and face this challenge together, with a commitment to inclusivity and openness."

The purpose of the panel is to be available as a free resource to health departments, social service agencies, school districts and other policymakers. The experts will help design efficient public health surveillance plans, advise on increasing testing capacity and access for underserved communities, and more.

"The precise trajectory of the local epidemic is difficult to predict, but we know that COVID-19 will continue to be a long-term challenge," says E. Susan Amirian, an epidemiologist who leads the TPL's health program, in the release. "Although CDC guidelines offer a good foundation, there is no one-size-fits-all approach when managing a crisis of this magnitude across diverse communities with urgent needs."

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