Desperation growing at Michigan restaurants after new COVID limits

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.