As northern Michigan restaurants and bars reopen under occupancy limits and other restrictions, business leaders and city officials are considering ways to expand the footprint of existing restaurants to help boost revenue.
One option may include “social districts,” which allow municipalities to approve specific activities in locations by permit. The activities could range from the consumption of alcoholic beverages, sidewalk sales and expanded seating in a designated area.
The concept — similar to ideas West Michigan business owners have floated in the past around “open container districts” — is drawing support in downtown Traverse City, where officials are considering closing a portion of Front Street to vehicular traffic to give customers more space to dine and shop outside. The city is among the 17 counties in northern Michigan that were allowed to reopen on May 22 under an executive order by Gov. Gretchen Whitmer. The reopening of bars and restaurants up north gives a preview of what’s to come downstate.
The idea also has support among Grand Rapids city leaders and business groups. The Grand Rapids City Commission moved quickly this past week to allow “social zones” across the city as part of a COVID-19 special event spanning June 1 to Nov. 30. Under the plan, permits would be granted for specific areas during the event. The resolution approved on Thursday gives a general framework for how the zones operate.
“Hopefully as the governor has opened up some of the northern portions of the state, our turn is coming soon, and we want to get ahead of that as soon as possible,” Grand Rapids City Manager Mark Washington said during a May 19 city meeting.
Jeff Lobdell, owner of Grand Rapids-based Restaurant Partners Management LLC, will open five of his restaurants in northern Michigan on Friday. The restaurateur hopes as soon as possible to open his company’s downstate locations, which include Bagel Beanery, Sundance Grill, The Beltline Bar & Mexican Cafe, Omelette Shoppe & Bakery, Rockwell Republic, and the Noble Restaurant.
“We’re in uncharted waters and doing our best to navigate this,” Lobdell said. “I think it’s great in northern Michigan we’re trusted to open. Our goal is to just demonstrate we can do this. We’re just looking to get a breath of fresh air and be able to open our doors safely.”
At some of his restaurants, Lobdell said he will not truly be able to serve up to 50 percent capacity if he also abides by the 6-foot social distancing rule, making outdoor seating an important part of reopening.
Space will be critical
The city of Grand Rapids has existing special events and temporary use policies that city officials will use to create multi-business social zones during a COVID-19 recovery special event from June 1-Nov. 30. Alcohol consumption would be allowed subject to requirements by the Michigan Liquor Control Commission, but service would not. If a bar or restaurant is selling alcohol to go, it could be consumed within the zone. Additional details will be dependent on orders from Whitmer.
“We’ve heard from a number of our business owners here in town,” Grand Rapids Mayor Rosalynn Bliss said during the May 19 meeting. “They would support us to create spaces, knowing that space is going to be critical for them to operate, and have asked how we can be creative in utilizing outside spaces like sidewalks, potentially parking lots and parking spaces.”
Proposed social zones in Grand Rapids would not necessarily mean full street closures, said Louis Canfield, the city’s development center manager.
“We’re working on options for fee relief, and also there are some possibilities for state legislation that would expand alcohol consumption opportunities in social zones, so we want to keep monitoring those and keep advocating for them where appropriate,” Canfield said.
Stakeholders from the city and local businesses identified 20 potential social zone locations throughout Grand Rapids. The preliminary list of potential zones is “not exhaustive,” Canfield said, but were chosen around areas with at least four restaurants within about 100 feet of one another. The expects permit applications from business and neighborhood associations.
Andy Johnston, vice president of government and corporate affairs at the Grand Rapids Area Chamber of Commerce, said he is hoping to see traction soon on statewide legislation to enable local governments to designate social districts.
State Rep. Michael Webber, R-Rochester Hills, introduced House Bill 5781 on May 19 that would create social districts where people age 21 and older would be allowed to legally purchase to-go drinks from adjacent bars and drink them in another location while still remaining in a designated area. It allows local governments to specify, if they choose, how the zones are designed. The bipartisan bill has 16 cosponsors, while a similar bill has been proposed in the Senate.
“For restaurants and bars, it’s great opening at 50 percent capacity, but 50 percent capacity is still going to make it very hard for restaurants and bars to survive,” Johnston said. “Allowing to extend liquor licenses to outdoor spaces is the kind of flexibility we want to see.”
‘New reality’ for restaurants
Limiting the dine-in patrons to gradually reopen restaurants has been done in other states, usually with restrictions set at 25-50 percent of dining capacity.
“We made it clear there was almost zero support or willingness to reopen at 25 percent,” said Justin Winslow, president and CEO of the Michigan Restaurant and Lodging Association. “The overhead wasn’t worth it to reopen at 25 percent.”
Even at 50 percent capacity, restaurants will struggle to operate in the long term, Lobdell said.
“Restaurants operate on very thin margins,” he said. “There are just so many fixed costs with a restaurant. It’s just not enough revenue to sustain a business, but the reason I’m doing it and others are doing it is because we want to get our rosters back, our people back and open up our cherished community gathering places.”
Whitmer’s executive order that loosened restrictions on retail stores, offices, restaurants and bars in all areas of the Upper Peninsula and parts of the northern Lower Peninsula went into effect on May 22. Another executive order issued last week allows retailers statewide to open by appointment starting Tuesday, May 26.
Whitmer’s order banning dine-in services at restaurants and bars in other areas expires May 28, which is when Winslow hopes locations across the entire state will be able to reopen.
The order regarding restaurants and bars in the U.P. and northern Lower Peninsula kicked in Friday of the Memorial Day holiday weekend, which has the potential to bring in many visitors to tourist destinations such as Traverse City.
Winslow said “it’s possible” that some establishments will not follow occupancy limits, but he believes most restaurateurs will take the order seriously.
“They get it, they know these regulations are not going to be easy but they also know we are all operating in a new reality now,” Winslow said. “Managing these new regulations isn’t just a necessary function of agreeing with or working with the state, it’s really necessary to ensure public consumer confidence. They need people to want to come back.”
Lobdell said he is not looking at opening weekend as a huge money-making opportunity, but rather a chance to demonstrate restaurants can operate safely with the new measures in place.
“We have a lot of passion for this industry,” he said, “and we want to see it back on its feet.”
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