Published in Economic Development
Shoppers peer into a downtown storefront on Sept. 9 on Mason Street in Saugatuck. Shoppers peer into a downtown storefront on Sept. 9 on Mason Street in Saugatuck. MIBIZ PHOTO: KATE CARLSON

Saugatuck 5.0? COVID-19 drives business and civic leaders to turn the Saugatuck-Douglas lakeshore tourist spot into a year-round destination

BY Sunday, September 13, 2020 06:00pm

SAUGATUCK — Business and civic leaders along the West Michigan lakeshore realized in March that COVID-19-related shutdowns could have a devastating effect on the already short summer tourism season that fuels the beach towns’ local economies.

A group of community leaders from Saugatuck, Douglas and Fennville started meeting informally through regular Zoom meetings in the early stages of the pandemic, referring to themselves as “Saugatuck 5.0.” 

They tackled immediate needs like setting up a small business COVID-19 loan and grant fund, and forming consistent safety procedures for downtown businesses. Now the group is starting to look at larger, foundational issues surrounding the area’s short tourist season that could leave it vulnerable to future unexpected events. However, the group faces a series of obstacles to their goals, including lacking a key economic development agency and inadequate wireless internet infrastructure. 

Saugatuck 5.0 is based on the idea that the city has gone through four major transformations of its economy: a trading post on the river, logging and shipping, fruit growing, and tourism. The group is now looking to grow the area by attracting more permanent residents and stabilizing a year-round economy that currently does not exist.

Rather than solely relying on summer tourism, they’re hoping to attract permanent residents who would stay in the area for more amenities in the greater Saugatuck area, said Jim Sullivan, Saugatuck-Douglas Rotary Club president. 

“We envision Saugatuck 5.0 as an environmentally wonderful, artistically sophisticated refuge,” Sullivan said. “Building on our 100-day tourism season we think is the challenge and opportunity we have now.”

The group of women who own Isabel’s Market + Eatery, a specialty market and event space in Douglas set to open this summer, are involved in the 5.0 initiative and intentionally have planned for Isabel’s to be a year-round business.

It is impossible to really build an economy out of the short summer tourism season, said Elizabeth Estes, one of the owners of Isabel’s. She also is a co-owner of Coast 236 Restaurant & Bar in downtown Saugatuck.

The group is trying to “plant the seed” with Isabel’s Market that there is support for a year-round business, Estes said.

Like many beach towns, Saugatuck has a strong tourism component, said Saugatuck Center for the Arts Executive Director Kristin Armstrong. Tourist towns in the Midwest are presented with an extra challenge of having a small window of warm weather when they need to do well, Armstrong said.

“COVID-19 was really the catalyst for this particular group of people who said we need to get beyond this 100-day tourism season,” Armstrong said. “The model is broken, it doesn’t work anymore, and we can clearly see that when there is this disruption.”

The pandemic has proven to be a new unpredictable event in addition to recent high Lake Michigan levels that can and have caused flooding in downtown Saugatuck and Douglas, Armstrong said. 

The Saugatuck Center for the Arts has operated on a year-round model, but has been more robust in the summer. Moving toward a year-round economy would help support additional smaller events at the arts center beyond the big concerts, Armstrong said. It could spark interest in holding more classes or additional small entertainment or niche events, she said.

The pandemic has given the area a chance to “reset,” which the Saugatuck 5.0 group is embracing, Armstrong said.

“One of the upsides to COVID-19 is it has impacted everyone, not just one or two businesses. Everybody got hit with this, so it has really pulled people together in terms of working with our friends and neighbors,” Armstrong said.

Regional economic development

Saugatuck City Council member Garnet Lewis realized an obstacle early in the 5.0 discussion: Saugatuck and Douglas do not have basic economic development tools like a Downtown Development Authority. This makes it hard to have a community-wide economic development focus, she said.

“We see it as imperative that we take this opportunity and come together as three communities to develop a strong economic development plan for the region that helps not just the tourist season, but year-round residents as well,” Lewis said. 

If the region had a formal economic development group, it would be competing with neighboring cities like Holland and South Haven. Both cities have DDAs and are able to facilitate year-round events, streetscape programming, partnerships and promotions for downtown businesses, Lewis said. Meanwhile, not having such an economic development program makes the towns ineligible to seek state funding through the Michigan Economic Development Corp., Lewis added.

Hot real estate, infrastructure challenges

Part of the Saugatuck 5.0 initiative is to attract more residents who stay in the area year-round as opposed to just the summer months. With many large employers turning to long term or permanent remote working strategies, residents in large cities are no longer tied to them because of their jobs. 

Mill Pond Realty Owner and President Laura Durham has worked as a realtor in the area for 39 years, and 2020 is the busiest summer she has ever seen in the Saugatuck-Douglas real estate market.

“There is a huge uptick in the market, we just don’t have enough properties to sell,” Durham said. “We need more inventory to accommodate the people who want to buy a home here.”

Durham has sold homes to a wide range of buyers this summer at varying price points. 

Gregg Smith, an associate broker at Coldwell Banker Schmidt, Realtors, has a similar success story from this year. Most of his clients have been from larger cities like Chicago, Indianapolis and New York City, he said.

“Between my office and other agents I’ve spoken to, everybody seems to be having record years if not close to record years,” Smith said. “I think a lot of people realized they don’t have to go to the office to work and realized they can work from home.”

Smith’s clients have ranged from young professionals, retirees and families.

“Homes will go up and I’ll have multiple offers within 24 hours if not less,” Smith said. “We have not seen that in quite some time and that’s happened to me several times this summer.”

Despite the quality school systems, attractive beach living and artistic amenities that the beach towns boast to tourists and potential residents, some infrastructure concerns remain.

“Our Wi-Fi is poor downtown,” Estes said. “When you start talking about people that could start working here remotely full time, that might be an issue. Mostly it’s a good thing, but for a small community like ours, there are some infrastructure obstacles.”

Local benefactors banded together and purchased mobile hotspots for some students who are going back to school remotely but did not have strong Wi-Fi at their house, Sullivan said. 

“It’s a critical issue,” he said. “You can go two or three miles inland off the lakeshore and you can’t get internet connection.”

AT&T Communications has reached out to the city about the possibility of 5G, but it’s a matter of placing the big and bulky devices, Lewis said. Typically, a municipality needs to get approval from its planning commission before bulking up broadband infrastructure because of the aesthetics of the structures. 

However, modernizing the city’s internet is a necessity to growing a year-round economy. Lewis is optimistic about expanding the region’s broadband in the near future to support the Saugatuck 5.0 initiative. 

“The opportunity for us to get 5G is there,” Lewis said. “It’s a matter of educating the public and dispelling the myths about it.” 

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