‘Shock and despair’ as Michigan bars, restaurants take another COVID hit

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The coronavirus roller coaster continues for Michigan’s bar and restaurant industry, which now starts another shutdown of indoor service on Wednesday.

The announcement of the three-week “pause” by the Michigan Department of Health and Human Services on Sunday evening follows weeks of escalating COVID-19 cases and hospitalizations in the state. By the end of last week, hospital directors were pleading with state residents to wear masks and cancel plans for large gatherings at Thanksgiving. 

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Michigan’s retailers now face 30 percent capacity limitations, down from 50 percent, while bars and restaurants will be closed to indoor service for the three weeks.

For bars in particular, the move represents yet another step backward in the up-and-down pandemic year. Many of them now have been closed more than they’ve been open.

“Our industry has been devastated and this is just another nail in the coffin for many businesses,” said Scott Ellis, CEO of the Michigan Licensed Beverage Association, in a news release as the latest order was announced. 

The state’s bars and restaurants were first shuttered by state executive order last spring when the coronavirus infiltrated Michigan. Gov. Gretchen Whitmer allowed them to reopen for indoor service – with capacity limitations – on June 8, but by July 1 bars throughout lower Michigan were once again ordered to close. They were permitted to reopen again in early October with table service and social distancing.

There are 8,500 active on-premise liquor licenses in Michigan, Ellis said, representing bars and restaurants. Nationally, food and liquor sales in bars totaled $19.9 billion in 2017, the latest year for which figures are available.

With the latest closure, Ellis joins other business leaders, including the Michigan Restaurant Association, in asking for relief for hospitality workers. 

“As the governor said, we’re at a precipice and there is a need for action. If we’re being told to sit back, be patient and not act, we expect our leaders to have a plan,” Ellis said. “We expect our Legislature and governor to be taking the steps necessary to ensure that our industry survives.”

Ellis spoke Monday with Paula Gardner, Bridge Michigan’s business editor. Here are excerpts from the conversation:

What are you thinking as you figure out what this means to your industry and its thousands of employees?

It’s been a long couple of days trying to figure out why and how we again want to blame bars and restaurants [for the coronavirus’ spread]. We’re less than 4 percent of the outbreaks based on state numbers (as of Nov. 5). 

The updated numbers on Monday showed Michigan bars were responsible for 2 new outbreaks and 10 ongoing outbreaks among 983 total in the state. Restaurants, as a group, had 19 new outbreaks and 23 ongoing cases. 

I do understand where the governor is coming from. I’m not arguing one bit that numbers are on the rise and hospitals are being overrun. I’m not debating that at all, and no one can.

But we have to learn to balance economics with this.... When bars and restaurants are at 50 percent, why – again – are they targeted (when privtae social gatherings are responsible for more cases?) I don’t get it. 

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The news seems to be hitting everyone hard.

Our people are more terrified than ever. There’s no funding or anything to help them. At all. [Our inside service is] being shut down for a minimum of three weeks. 

I’m fearful that it’s going to be longer.

What’s the risk to your industry at this point?

Three weeks ago, we were looking at 20-some percent would close permanently. We’ll be doing another survey at the end of this week. We are concerned about 40 percent to 50 percent never reopening because there’s no funding to help them.

Where would you want that to come from?

There is a restaurant and bar package at the federal level, [The RESTAURANTS Act, which passed the U.S. House of Representatives and stalled in the Senate]. We’re monitoring that and trying to get that through.

We’re hoping that [Michigan] can do something else at the state level. Help us pay our bills, help us pay our taxes. All of those things that still have to be paid no matter what.

How are your members reacting so far?

Absolute anger. Confusion. Despair. What can we do?

Everyone is in shock and despair about why we are at this point again. We’re wearing masks. We’re socially distanced. We’re at 50 percent capacity, but I don’t know very many [bars and restaurants] that even reached 50 percent. They were doing just enough to survive and keep people employed, and as of Wednesday, thousands of people will be laid off, just before the holidays. 

Many have said, ‘Can I just stay open and take the violation?’ I can’t recommend that. But that’s the point many of these places are: thinking they’ll go under either way.

Who is most vulnerable in this scenario?

The majority of our membership: the small, family-owned business with one location and small seating, with a (full) capacity of 50 to 75. They’re barely paying the bills, and have been depending on savings. The industry was doing so well prior to this, but that savings is long gone. They’ve used [Paycheck Protection Program loans], anything they could. That’s long gone. 

That carries so many implications for our small towns, which count on these places as downtown destinations. 

They’re the social life. Their local bars are their meeting places. They’ll shut down, and towns are going to hurt. A lot of us were looking to some normalcy to continue to go to those places, following the rules, and getting out (of the house). Here we are with another lockdown, which is a whole other mental health issue.

Our industry, for whatever reason, we’re just targeted. The numbers the state had [as of Monday morning were small] and do not show bars and restaurants being the problem. We’re still baffled. We don’t understand when we meet the standards and wear the masks how we end up on the slaughtering block.

Was there any point where Michigan’s bars seemed to have some momentum for survival?

Summer months, people were surviving. The state did a good job at allowing outdoor service areas and to bend any way we could to stay open. 

Are employees affected yet?

There are going to be large layoffs Tuesday night. The layoffs are starting already. 

I own MichiGrain Distillery in Lansing, and I laid off my (6-person) serving staff and general manager an hour ago. We’ll still work in the back half and produce our products. But the tasting room, the bar side, is going to be shutting down and unfortunately those employees had to be laid off.

This is personal for you, too.

It’s hard for everybody. This isn’t throwing stones at the governor, blaming her 100 percent for all of this. It’s just emotional, the situation we’re in.

I feel like we have to find a way to operate safely. If our numbers were showing we are the problem, I would be way more apt to accept it. The comment was made, “Places where people gather are caught in it.” Well, show me the numbers. That’s where we’re asking for help.

What do you want from the state in about 2½ weeks as the “pause” winds down?
 

I’m reaching out to legislators, seeing if we can put together some sort of package. I know every industry is hurting. It’s just a hard situation. 

Unemployment [benefits are] there, which isn’t the greatest, but it’s there. We’re asking the federal legislators to push for that restaurant package and the stimulus package.

We still all have to pay our bills. The (U.S.) Small Business Administration, early in this pandemic, paid six months of its loans for the smallest businesses. We would love to see that come back.

We’re open to ideas. When these men and women run for office, that’s part of their job to help us figure out how to do it.

What can Michigan residents do?

We’re asking every customer, please, if you’ve been going out or even if you haven’t, please think of servers, and carryout, and outdoor seating, or gift cards. Every little bit helps.