Desperation growing at Michigan restaurants after new COVID limits

COVID-19 cases and hospitalizations are growing, but the state’s bar and restaurant industry says its dining rooms are unfairly shut down. Layoffs continue, and many warn of more closures. (Shutterstock)

Dan Kolander and his staff normally get ready for a surge of business on the night before Thanksgiving as regulars jam Dan’s Downtown Tavern.

The bar and restaurant is an anchor among the handful of nightspots in downtown Saline, just south of Ann Arbor, and Kolander says he can count on $15,000 in revenue on what’s now called “the biggest bar night of the year.”

“Now it’s zero,” Kolander said. “It’s literally zero.”

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This year, the bar will be dark on Wednesday, a week after new state restrictions, including bans on indoor service at Michigan bars and restaurants, took effect as the state suffers through a record number of coronavirus cases. Kolander and the six people left on his staff spent Tuesday preparing turkey dinners for catering orders, and they planned to do that Wednesday, too.

 

When Dan’s Downtown Tavern reopens Friday, it will be for carryout, including beer growler refills, while offering a few seats on an outdoor heated patio. That’s all the establishment can allow, following orders issued last week by the Michigan Department of Health and Human Services for food establishments to close to indoor service through Dec. 8. 

The order from MDHHS Director Robert Gordon, an appointee of Gov. Gretchen Whitmer, also re-closed movie theaters and casinos due to concerns about indoor spread of coronavirus, and it dropped retail capacity limits from 50 percent to 30 percent. 

“We need to get it open,” Kolander said, not just of his establishment, but of bars and restaurants across Michigan that he said are suffering with the three-week halt to their indoor operations. “I don’t know what can be done.”

One week after the state’s move to close indoor dining service, the restaurant industry is trying to figure that out.

The Michigan Restaurant & Lodging Association (MRLA) last week filed a lawsuit against Gordon. A U.S. District Court judge in Grand Rapids denied the restaurant group’s request to allow these businesses to remain open until the matter can be argued in court. A hearing is scheduled for Nov. 30. 

According to a study by the U.S. Centers for Disease Control and Prevention, adults with coronavirus were twice as likely to have reported dining at a restaurant. The CDC went on to say that mask use and social distancing can be difficult while eating or drinking, and it rated indoor dining high-risk.

A few restaurants around the state have reopened, defying the order, something that Kolander said he considered before worrying whether it could endanger his liquor license. Suspension or revocation of a liquor license is possible for violating the MDHHS emergency order, according to Jeannie Vogel, spokesperson for the Michigan Liquor License Commission.

And business groups around the state are watching the proceedings, wondering whether the so-called three-week pause will be lifted Dec. 8 as announced or extended, possibly to other business sectors.

“I’m concerned that this three weeks is not going to be the end of this in terms of the restrictions and that it will be extended for another two or three weeks after that,” Brian Calley, president of the Small Business Association of Michigan, said Monday on a video broadcast. 

Calley based his prediction on data from other countries that initiated business restrictions before Michigan’s move in mid-November, as coronavirus cases and hospitalizations rose to record levels. Other business groups, including the Lansing Regional Chamber and the Michigan Licensed Beverage Association, also say they’re concerned about a possible extension.

MDHSS has not said what specific criteria it will use to determine whether the pause will be lifted on Dec. 8, but spokeswoman Lynn Sutfin outlined for Bridge Michigan some of the factors that will be considered. 

“At the end of the three-week pause, we will evaluate the impact the actions we have taken have had and determine next steps,” Sutfin said. “These factors can combine in different ways, and there’s no exact formula for the analysis.”

Among the factors Sutfin said MDHHS would weigh: 

  • The number of emergency department visits for coronavirus-like illness and COVID-19 inpatient admissions
  • Whether rates of positive test results and reported COVID cases plateau or decline
  • Whether there are plateaus in case rates by onset date
  • The number of infected people filling up hospital intensive care units and inpatient beds 
  • And the ability of local health departments to track the spread of the coronavirus

Meanwhile, the first week of the order left restaurant owners frustrated, said Andy Johnston, vice president for government affairs at the Grand Rapids Chamber of Commerce. He said Tuesday he’s had multiple conversations with restaurant owners in Kent County who told him the last week has been hard. They’d already closed in March and operated at half-capacity since, while bar owners couldn’t open until early October.

“They just want to be given some type of chance to operate safely,” Johnston said. He said some told him they can’t survive on takeout orders. 

Adding to the frustration is that many are raising questions about how the state interpreted data that led to the closing of indoor dining, Johnston said.

As of Monday, the state’s data showed 21 new outbreaks for bars and restaurants combined, plus another 33 ongoing outbreaks. By comparison, manufacturing has 65 outbreaks, office settings have 40, and retail 32. 

The MRLA’s lawsuit against the state was not filed “lightly,” said Justin Winslow, president  and CEO of the industry group. The filing says that the industry is being treated unfairly and has operated safely, and it challenges the public health benefit to closing dining rooms while outbreaks continue at higher numbers in other areas, including schools and social settings.

The state responded to the lawsuit on Monday, noting that it did not order a complete shutdown. 

“Food service establishments—i.e., restaurants and bars—may continue to operate using drive- thru, delivery, carry-out, and outdoor seating,” according to the state. “They simply cannot offer indoor dining services at this time, given the high risk of infection and spread... and the urgent need for Michigan to stem the virus’s aggressively surging tide.”

The state framed MRLA’s legal request as asking the court to “substitute its judgment for that of the public health officials.”

That’s not the message Kolander, the owner of Dan’s Downtown Tavern,  wants to hear. He estimates losing at least $500,000 since March, with sales falling from $40,000 per week to $5,000 last week. He inherited his building, so has fewer expenses than many others in his industry. 

“That’s the only reason I’m surviving,” he said. 

Kolander worries for staff, too. Before COVID-19, he had 46 employees. That fell to 18, then he laid off 12 in the last week. “And they rely on this income,” he said. “That’s what we’re going through with this tyrannical B.S. This is insane, absolutely insane.”

Winslow said layoffs in the last week are averaging 65 percent to 75 percent of staffing from earlier in the fall, which already was reduced due to 50 percent capacity limitations. Some owners are trying to hold onto their workers, in the hopes of reopening in early December.

“There are a large number of operators who are trying to follow guidelines despite their immense frustration,” Winslow said.

“I don’t know what comes next,” he said. “There’s a lot of desperation, and it’s growing.”

Winslow joins other business sector leaders in waiting for relief from Washington, D.C., in the form of another federal stimulus package. The $2 trillion CARES Act in March created financial safety nets for unemployed workers, businesses and state governments, but a new package has been stalled for months. 

Johnston said the Grand Rapids Chamber is hoping to encourage the Michigan Legislature to take up property tax deferral in its lame duck legislative sessions before the end of the year, and possibly also sales tax deferrals for businesses affected by restrictions. 

“They’re not getting any kind of help from the state,” Johnston said. 

The chamber also is urging its members to use their holiday shopping dollars to support local restaurants and other businesses affected by pandemic orders. 

“Gift cards make great stocking stuffers,” Johnston said. “The key is getting these businesses through this.”

Steve Japinga, vice president of government affairs for the Lansing Regional Chamber of Commerce, said his group is making a similar appeal. 

“It’s about survival now,” Japinga said, noting that after the holidays come the traditionally slow winter months. Many restaurateurs count on holiday sales to bridge the sales slowdown until spring. 

Relief for the owners and employees are top of mind for many business groups. Japinga said a new COVID-19 fund would be helpful for people who don’t have the resources to pay their bills.

“It’s pretty obvious that this thing we’re all going through is far from over,” Japinga said.

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Comments

Blame McConnell
Wed, 11/25/2020 - 5:46am

Majority Leader of the US Senate, Moscow Mitch, refuses to help support WORKING FAMILIES and businesses as they contend with economic hardship from Covid19. So if we're pointing fingers, let's start there.

Nosmallbusinesses
Wed, 11/25/2020 - 10:35am

Instead of COMPLAINING, DO SOMETHING ABOUT IT! Namely, grow a spine and stay open. If ALL the small businesses banded together and give the state the middle finger. What are they going to do? Shut down everything??

Start a general gofundme to pay for fines. You see how easy that is??? The ANSWER is right in front of your face. If you choose to sit on your hands and do nothing, YOU are sinking your business.

I’m done supporting small businesses. If YOU don’t care about your businesses, why should I?
If I WANTED CARRYOUT I’d order a pizza. Or Chinese. Or fast food drive through. I go to a restaurant to DINE IN. Get away from the kids. Peace and quiet. I have zero interest in eating COLD, sloppy food thrown in a styrofoam container.
No thanks. You don’t want to fix the problems, I’ll stick with big chains. At least the big chains will ALL be closed because that’s how corporate works. Small business has a CHOICE. What’s worse? Going out of business or 50/50 chance state will bust your balls. The answer is glaringly obvious.
You don’t want to do anything? Then quit whining, pack up the restaurant equipment and CLOSE DOWN. No business or tips from me...ever again. You don’t want to take my $ I’ll gladly spend it where it’s appreciated.

LH
Tue, 12/01/2020 - 12:52pm

To an extent I agree with you. However, there have already been establishments in Michigan who have had their liquor licenses suspended because they tried to remain open. Others have suffered fines of $5,000 or $1,000. I would contribute towards fines if a restaurant near me was fined, but the loss of a liquor license is much more serious and not something patrons of an establishment can fix. Obviously, the state is willing to bring out the big guns to enforce their nonsensical orders. I will continue to support my local restaurants as soon as they re-open, and I don't intend to stop patronizing them if they comply with the closure orders.

Todd Priest
Tue, 12/01/2020 - 1:51pm

Your comment displays exactly how ignorant people who don't own or aren't educated in small business are. Astoundingly ignorant.

Tim
Wed, 11/25/2020 - 3:29pm

If something isn’t done soon many of the small business owners will fold and the large corporations will take the spoils. Not a good day for Michiganders.

Mr.Anderson
Thu, 11/26/2020 - 9:54am

Prometheus wasn’t handed fire...and the government isn’t going to hand you back your freedom.

Kevin Grand
Sat, 11/28/2020 - 2:19pm
Anonymous
Mon, 11/30/2020 - 1:35am

Partial moratorium on rent and mortgage payments. Problems solved.

DoNothingSenate...
Mon, 11/30/2020 - 3:14am

Survival? Instead of blaming the governor and state government, maybe the Chamber can persuade the Rebublicans in the US Senate to grow a pair and pass a relief bill for FAMILIES and small businesses. Like the Chamber, they work to defend business interests rather than the well being of our people. Covid19 is driving the economy. Public health measures protect us and small business interests. Failure to recognize this continues to harm us all.

Matt
Mon, 11/30/2020 - 8:43am

This a repeat and concerning story. I personally know owners of restaurants and I see the struggle. What I don't understand is the Governor is quick to shut down but not willing to help. She shuts the business, why doesn't she force the banks to pause loan payments, or utilities to defer payments. Additionally they are still forced to pay property taxes. Why are not these stopped?

CM
Mon, 11/30/2020 - 11:22am

Something not right with the MI shutdowns (pause). From the state and restaurant association data, restaurants are not a source for major transmission of covid, so why close them down? Perhaps the real culprit, is that masks that are used by the public are not effective against a virus that too small to be filtered out, therefore the virus still spreads with or without masks. Why do a sub group of our society use double masks and sealed? Do these double mask users know something that hasn't been shared with the public?

LH
Mon, 11/30/2020 - 1:11pm

The numbers of Covid cases and deaths continue at a high rate in nursing homes. Workplaces, etc., have higher transmission rates than restaurants. So what does Whitmer do? Close restaurants and bars. I have very little hope that restaurants will be allowed to re-open until after the holidays, if even then. I recommend the Great Barrington Declaration as required reading. It's not perfect, but it certainly makes more sense to me than anything we have done so far. I wear a mask when I'm out and about, and while I hear a lot of people grumbling about masks, I see very few people who don't wear them. I am very careful about social distancing as well, that makes sense. But we were eating out a couple of times a week since restaurants re-opened for dine-in, and with one exception, we encountered no issues and never felt unsafe. The one restaurant we went to where servers were not masked and capacity was not reduced is off our list of places to go until the pandemic is over. That's a situation we dealt with by using common sense, not panic. If the government, state or federal, is going to shut businesses down, then they should help them try to survive, I agree. But to rely on government to spend money it doesn't have to compensate for actions that are unnecessary is foolish. News flash -- someone is going to have to pay for this, and it's going to be the less than 50 percent of the households that actually pay income taxes, and all of us who pay property taxes, directly or indirectly. But the handwriting is very clearly on the wall -- it's going to get worse for small businesses and individual liberty as soon as the new occupants of the White House move in.