By SHELDON KRAUSE
Capital News Service
LANSING — As warm weather approaches, some communities are creating “social districts” under a state initiative that advocates say will spur social and economic involvement in downtown economies.
A 2020 law allows local governments to apply for a permit to designate groups of restaurants with liquor licenses as social districts. The law also establishes areas between restaurants in the districts where alcohol in marked containers from these businesses may be consumed.
Now, the idea is exploding as communities hope for a boom summer and as residents look for fun outdoor experiences after months of isolation.
So far, 39 cities and villages have authorized social districts in 23 counties, including Petoskey, Dundee, Allegan, Saugatuck, Ludington, Sturgis, Three Rivers, Cadillac, Wyandotte, Northville, Adrian and Mount Clemens.
John McNamara, the vice president for government affairs at the Michigan Restaurant and Lodging Association, said the push for social districts might not have succeeded without the pandemic.
“If COVID-19 had not hit Michigan, I highly doubt social district legislation would have ever been signed by the governor,” he said.
“This idea has been around for a while — however, the Michigan Liquor Control Commission was always pretty opposed to the idea,” McNamara continued. “So it was more than when COVID hit and outdoor dining was being pushed, that was sort of the avenue that the Legislature took.”
Becky Goodman is the downtown director for Petoskey, where a social district opened in late August and expanded greatly in the off-season.
“We’re hoping that it will be just another nice benefit of being able to shop in Petoskey and walk around, carry your drink with you,” she said.
“If the bar is crowded and you feel like you’d rather have some fresh air and get outside, you can certainly do that. Or if you’re done with your meal and you want to get out to the shops and take your drink with you, that’s fine too. That’s the intent behind it.”
“We are a resort community and it kind of is a resort amenity,” she said.
Goodman also stressed the financial motivations behind social districts.
“Even when we plan a parade, that’s economic development. Everything we do as downtown directors is economic development,” she said. “That’s the reason we did it, in the end, is to make our merchants more successful.”
Gae Donovan-Wolfe, the executive director of the Greenville Area Chamber of Commerce, said she expects the city’s proposed social district, which still needs state approval, to draw patrons and businesses.
She said that she expects the social district to draw younger crowds because “we do have a really cool downtown with some bars that you can walk around.”
Donovan-Wolfe said she hopes the social district will be “a catalyst for community development in our downtown area, for people that not only want to come down and walk around, but also businesses that want to come down and be in the downtown area.”
She also noted that since information about Greenville’s proposed social district became public, a local resident has expressed interest in opening a new business downtown.
The restaurant association’s McNamara noted that while social districts appear to benefit nearly every party involved, communities should keep realistic expectations about the level of positive impact.
“In terms of overall economic impact in Michigan, it’s helped restaurants survive. But restaurants in Michigan have still seen a 57% decline in sales, which is twice the national average, so it’s a tool to help survive — but it’s not like people went from just getting by to all of a sudden doubling and tripling profits because of a social zone,” he said.