Deserted office districts pose big problem for restaurants, shops that rely on them
The lights are still off at Central Kitchen + Bar in the First National Building. Next door, the Roasting Plant coffee shop facing the usually bustling Campus Martius park also remains shuttered.
That’s largely because the primary customer base of both trendy establishments is still encamped at home, where they’ve been running some of Michigan’s largest businesses remotely since mid-March amid the coronavirus pandemic.
Two weeks into the reopening of Southeast Michigan’s bars, restaurants and retailers, downtown Detroit remains mostly desolate on weekdays — and probably will be for much of the summer and possibly into the fall, depending on whether COVID-19 makes a resurgence in Michigan’s largest and hardest-hit city.
The absence of workers from Quicken Loans, Ally Financial, General Motors Co., Blue Cross Blue Shield of Michigan, DTE Energy Co., multiple law firms, city and county government filling Detroit’s office towers is being felt hard at the ground level.
“There’s not enough traffic downtown to justify reopening yet,” said Dennis Archer Jr., owner of Central Kitchen, a popular lunchtime spot for Quicken Loans employees who work upstairs in the Dan Gilbert-owned First National Building.
At this point, Archer said, Central Kitchen is planning to reopen around Aug. 10, what would be the restaurant’s sixth anniversary.
“No one wants to open and then close,” Archer said. “We want to get it right the first time.”
A block south on Woodward, one of Central Kitchen’s competitors, Townhouse Detroit, is preparing for a July 1 reopening. Its owner, Jeremy Sasson, also is planning a July 8 reopening for Prime + Proper, his higher-end steakhouse at Griswold and State in the Capitol Park Building.
“It will be some time before things can be seen more clearly in Detroit,” Sasson said.
Sasson said he’s trying to be not be “too late or be too early” in reopening his two restaurants. Townhouse Detroit is located at the base of the Gilbert-owned skyscraper Ally Detroit Center, where the main tenant, Ally Financial, has not set a date for returning to the office.
“We want to do right by our team, we want to do right by our guests and we want to do right by our business,” Sasson said. “And aligning those (objectives) is not easy.”
It’s also not easy to predict the future or whether there will be enough patrons who are comfortable filling tables to keep these businesses afloat. That’s evidenced by the number of restaurants downtown that are still only doing takeout service at this point, limiting operations and staffing.
Nothing is certain as the coronavirus lingers, and it’s really anyone’s guess when a vaccine will be available.
Gov. Gretchen Whitmer’s administration is mulling a mandatory 6-foot radius rule to enforce social distancing in office settings.
Such a rule would likely reduce the number of workers allowed to occupy office spaces with the kind of open floor plans that are prolific at Quicken Loans, StockX and co-working spaces such as WeWork and Bamboo Detroit.
“If there is a mandatory workplace distancing, I think all that will do is reinforce less people coming back downtown,” said Archer, CEO of Ignition Media Group, which is based out of the Murphy-Telegraph building on Congress Street.
Quicken Loans and its family of companies, the linchpin of downtown Detroit’s resurgence in recent years, is taking a very cautious approach to bringing its 19,000 employees back downtown.
But company leaders also are mindful that their workforce created the demand for ground-level retail stores and restaurants in the buildings that company founder Dan Gilbert invested billions of dollars into in the years between Detroit’s bankruptcy and the deadly pandemic that has claimed the lives of 1,425 Detroiters.
“Our mission is to get everybody back down to Detroit because that’s our headquarters, and we’ve got a lot of important things going on in downtown Detroit, outside of our mortgage business,” Quicken CEO Jay Farner said in an interview. “But the primary driver for us is the safety of our team members.”
Quicken Loans plans to begin bringing back employees to its downtown offices the week of July 6 and gradually build up to 5,000 or 6,000 workers by mid-August, working in the office on staggered daily schedules, Farner said.
“We just want to take it a little slow and make sure all of the preparations we’ve made actually work out,” Farner said.
At Quicken Loans’ One Campus Martius headquarters, the mortgage giant has, like all companies, been rethinking everything from floor plans to entry points and elevator use.
“We’re viewing elevators more like tee times … we’re staggering people so we won’t have people gathering outside the elevator waiting,” Farner said.
Farner said Quicken’s goal of having up to 6,000 workers downtown on a daily basis is being driven by the assumption that office buildings will need to limit capacity in much the same way restaurants and bars are limited to half their normal seating capacity.
The Quicken Loans CEO says he would support Whitmer imposing office space capacity restrictions. “We have to keep Michigan’s economy going,” Farner said. “So if it needs to be more cautious now to avoid a more drastic shutdown in the future, I’m all for that.”
After the “success” of working from home — Quicken closed on a record $20 billion in mortgages in March and $22 billion more in April — the company is planning to let employees split their time between home and the office for the foreseeable future, Farner said.
“I think we’re going to see a larger percentage of our workforce working part of the time — two days a month, four days a month — from home,” Farner said.
But the paring back of the number of workers downtown probably was not in the business plans for most of the retail shops and restaurants that have opened in recent years.
Sasson’s Prime + Proper opened in 2017 as Capitol Park’s surrounding apartment buildings were being renovated and filled up with downtown workers with disposable income. But restaurants offering dry-aged steaks and raw bars aren’t supported by just the neighbors. “Downtown Detroit needs metro Detroit to survive,” Sasson said. “It can’t survive just on the five-block radius.”
Quicken Loans executives are “very focused on” maintaining the vibrant downtown that Gilbert’s Bedrock LLC real estate company has spent a decade building, Farner said. They’re actively encouraging employees who are volunteering to come back to the office next month to spend time outside of their buildings during the workday — a subtle hint to get out and patronize Bedrock’s struggling tenants.
Posted By: Crain’s Detroit Business on June 21, 2020. For more information, please click here to read the source article.
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