The Michigan Daily analyzed Washtenaw County Health Department inspection records as part of an investigation into local business closures and the food service industry over the last three years. Below are the results of this investigation, in addition to community reactions to the numerous recent business closures in Ann Arbor. 

According to The Michigan Daily’s assessment of these records, 106 Ann Arbor businesses, mostly restaurants, have closed due to several financial and social obstacles facing the city. Increasing rent prices, the influx of corporate chains and the impact of the COVID-19 pandemic have left many Ann Arbor staples deserted. 

Many of these restaurants were Ann Arbor institutions for decades, such as Banfield’s Bar and Grill, which opened on Packard St. in 1982. The Daily found that in 2020, as the pandemic abruptly sent students home and the University of Michigan closed all in-person activity indefinitely, 49 restaurants closed. This was nearly double the 2019 number, when 28 restaurants closed. As of publication, another 29 closed in 2021.

Nick Reynolds, social media manager of Pinball Pete’s, an arcade with locations in Ann Arbor and East Lansing, said the business struggled to make ends meet as rent continued to pile up and the arcade had to remain closed. 

“When a business is forced to be closed, it doesn’t make the property owners stop asking for rent payments, and to stop having to pay for electricity and to stop paying taxes,” Reynolds said. “But with 100% of the business closed (for in-person services in spring 2020), there was just no way for us to make those payments. We didn’t have enough money to help us keep our locations and our businesses alive for over a year.”

Rent prices across the United States are rising rapidly as the country recovers from the pandemic, and Ann Arbor is no exception. High rent costs on the University of Michigan’s Central Campus can be difficult for businesses or residents to manage. Janice Sigler, owner of Blank Slate Creamery on W. Liberty St., said she has heard serious concerns about local establishments being able to outcompete more lucrative businesses such as marijuana dispensaries. 

“Because I think (exponentially increasing rent) is a trend that’s happening in cities all over, but particularly in Ann Arbor, we’re all nervous it’s going to end up being just (a city of) dispensaries,” Sigler said.

The Daily found that only 29 of the 106 food service businesses that closed in the past three years had another business replace them. Of those 29, two were replaced by a dispensary or vape shop, one restaurant was replaced by a clothing store, and the other 26 were replaced by a restaurant. Another five restaurants moved locations and are still operating. The remaining 72 restaurants are still empty, The Daily found. 

Restaurants currently operate in buildings colored green.

Medical Campus

Kerrytown

Restaurants closed during 2019, 2020 or 2021 in buildings colored red.

East Huron Street

South Main Street

Restaurants that closed were replaced by other establishments in buildings colored blue.

East Washington Street

South State Street

East Liberty Street

South Division Street

Maynard Street

East William Street

Old West Side

The Diag

Packard Street

South University Avenue

Washtenaw Avenue

Source: Washtenaw County Health Department

Graphic by Eric Lau / The Michigan Daily

Restaurants currently operate in buildings colored green.

Restaurants closed during 2019, 2020 or 2021 in buildings colored red.

East Huron Street

South Main Street

South State Street

East Liberty Street

Restaurants that closed were replaced by other establishments in buildings colored blue.

South Division Street

Maynard Street

East William Street

The Diag

Packard Street

South University Avenue

Source: Washtenaw County Health Department

Graphic by Eric Lau / The Michigan Daily

Hill Street

Restaurants currently operate in buildings colored green.

Restaurants closed during 2019, 2020 or 2021 in buildings colored red.

East Huron Street

South Main Street

South State Street

East Liberty Street

Restaurants that closed were replaced by other establishments in buildings colored blue.

South Division Street

Maynard Street

East William Street

The Diag

Packard Street

South University Avenue

Source: Washtenaw County Health Department

Graphic by Eric Lau / The Michigan Daily

Restaurants currently operate in buildings colored green.

Restaurants closed during 2019, 2020 or 2021 in buildings colored red.

East Huron Street

South Main Street

South State Street

East Liberty Street

Restaurants that closed were replaced by other establishments in buildings colored blue.

South Division Street

Maynard Street

East William Street

The Diag

Packard Street

South University Avenue

Source: Washtenaw County Health Department

Graphic by Eric Lau / The Michigan Daily

Some neighborhoods had greater success replacing restaurants that closed than others. The South University district, for example, had five of its seven closed restaurants replaced; the Downtown district, or the area bound by South Main St. and South State St., only had 13 of its 35 closed restaurants replaced.

Rents vary significantly by neighborhood. According to the most recent analysis of the Ann Arbor downtown market conducted by the Downtown Development Authority (DDA) in 2018 the average asking rent in Kerrytown is $32 per square foot, compared to the South University district, where it is $45 per square foot. 

Phillis Engelbert, former owner of The Lunch Room Diner and Canteen, which permanently closed in August 2020, said businesses located in busier areas closer to campus faced a heavier burden of paying higher rent with fewer customers coming in. Engelbert’s other two Ann Arbor restaurants, the Detroit Street Filling Station and the Lunch Room Bakery, remain open. 

“Rents are set at different levels in different parts of town,” Engelbert said. “If you’re in Kerrytown, it’s more expensive than if you’re in a strip on the edge of town. I think for some people, if you’re going to be paying that higher-end but not doing the volume of sales, it’s going to be very difficult to sustain (business).”

Brian Jones-Chance — a real estate broker, co-founder of 734 Brewing Company in Ypsilanti and founder of the Association of Businesses of Color  — told The Daily he has noticed market prices decreasing due to the increase in business closures. Even though market prices have decreased in general, the decrease is marginal in areas like Ann Arbor’s downtown, Jones-Chance said. 

“I think a lot of spicier, more expensive areas, like State Street and Liberty in Ann Arbor, where rents are really astronomical, they’ve come down a little bit,” Jones-Chance said. “But they’re still easily three times more than you would pay in Ypsilanti, or maybe two times more than you pay in Saline.” 

Beyond their struggle to pay for rent and utilities, local establishments have less leeway to increase pay for their employees. Ann Arbor has not been immune to the effects of the nationwide worker shortage. Unlike national and global retail corporations, local businesses do not have the financial resources to raise their wages, Reynolds said. 

“Large corporations have the ability to increase pay for anyone across the board, but they’re too greedy to do it,” Reynolds said. “For local businesses, it’s a bit of a harder issue to juggle, because we want to pay our workers a fair wage for what they do. But unfortunately, we just don’t have the millions or billions of dollars in revenue to pay everyone as much as maybe you would like to.”

Maura Thomson, communications manager for the DDA, told The Daily in an email that since many restaurants did not anticipate the prolonged lack of customers as a result of the University’s virtual semesters, ongoing indoor capacity limits and stay-at-home orders, it was difficult for them to respond to changing staffing demands and public health policies.

“Balancing staffing when (we were) not sure how much work there would be, and then unemployment benefits, made it more advantageous for many to not work,” Thomson wrote. “Policy decisions on capacity limits also provided challenges. The limits would change without much notice, making staffing difficult or impossible.”

Susan Pile, senior Director of University Unions and Auxiliary services, told The Daily in an email that the Michigan Union’s restaurants have also been affected by the worker shortage.

Affordable housing also poses an obstacle for hiring full-time, non-student employees, especially those who cannot afford Ann Arbor prices in the long term. 

“I think we’re a little bit nervous about the cost of most things in Ann Arbor,” Sigler said. “Most of (our full-time employees) can’t afford to live downtown, so affordable housing is definitely a problem.” 

Sigler also said many small business employees are not able to afford the extra time it takes to commute to a downtown job.

“I know that city officials would probably say to use public transportation and park further outside the city,” Sigler said. “The problem with that is it adds probably 20-40 minutes to somebody’s commute, and not everybody can afford either the child care or other consequences to adding 40 minutes on each side of their commute.”

Thomson told The Daily the DDA has an affordable housing fund to provide grants to affordable housing initiatives in downtown Ann Arbor.

“We work with the AAHC (Ann Arbor Housing Commission) to prioritize DDA projects to take on infrastructure work to make AAHC projects on City owned properties more competitive for funding,” Thomson wrote.

In attempts to combat their financial struggles, local business owners have forged their own paths to remain open. Reynolds, for example, opened a GoFundMe page that raised $125,650 to keep Pinball Pete’s open through the pandemic. Reynolds bought their property seven years ago, allowing them to avoid the burden of skyrocketing rent prices. 

Some restaurants, like Ashley’s on State Street, pursued grant and aid opportunities. Ashley’s owner Jeff More said these were offered by all levels of government and helped a lot during the height of the pandemic.

“We aggressively looked to see what support was out there for restaurants,” More said. “From individual grants, small levels by counties and cities and state, all federal grants, any other federal programs, we took advantage of every one we could find.”

Throughout the pandemic, the Small Business Administration created several programs to help businesses affected by COVID-19. These include the Paycheck Protection Program, economic injury disaster loans, the shuttered venue operators grant and the small business owners debt relief program. The Michigan Economic Development Corporation also provided up to $20 million in grants and loans for small businesses negatively affected by the COVID-19 pandemic via an application process.

Government aid was not readily available to all business owners during the pandemic. Black-owned businesses are around 30 times less likely to receive federal funding than those with white owners. Jones-Chance said this was one of the main reasons the ABC was founded, since Black-owned businesses often don’t have the pre-existing banking relationships required to access loans for small businesses. 

“An example is the fact that the initial rollout of the Paycheck Protection Program required a prior banking relationship with a national or regional bank,” Jones-Chance said.  “Recently, there’s been another example, a program through the Michigan Economic Development Corporation, (that) seems almost designed to help people who needed it least by giving more dollars to those businesses that had more matching funds.”

A handful of U-M faculty are tackling the issue of business closures from an academic research perspective. Margaret Dewar, professor emerita of architecture and urban planning, conducts research on American cities struggling with population shifts and employment loss. In an interview with The Daily, she said Ann Arbor’s increased housing demand and rising prices may have collectively driven out some of the city’s most loved small businesses. 

“I suspect what’s been happening is rents have been rising because of the increased market (due to housing growth and availability),” Dewar said. “And so certain businesses have gone away. And it looks as if there’s a greater preponderance of chains in national brands and fewer local businesses.”

Thomson wrote that many local businesses who adapted to an e-commerce format during the pandemic were able to increase their sales.

“Changing consumer behaviors with the increase in online retail was already making brick and mortar sales incredibly difficult,” Thomson wrote in an email to The Daily. “Retailers who enhanced their e-commerce, and for some it was getting it up and running for the first time, saw huge increases in sales.”

Jones-Chance said adapting to a delivery-first business model at 734 Brewing Company during the spring and summer of 2020 helped their business stay open. 

“One of the strategies, which I think really made the difference for us during the worst of the pandemic, was taking our products to the customers when they couldn’t come to us,” Jone-Chance said. “That first spring and summer we were basically the beer milkman.”

Part of the core of Ann Arbor’s charm, U-M alum Courtney O’Beirne said, is its vast array of local restaurants and retail options. When she returned to campus as a visitor in Nov. 2021, O’Beirne was particularly upset to see that one of her favorite spots, Thrive Juicery on W. Liberty Street, had closed its doors. 

“Thrive was really the only place on campus where you can get a smoothie without the added sugar and all of that,” O’Beirne said. “And in general, (their closure) was sad because they’re really nice people and the food was really good.”

Business sophomore Caroline Millen said she appreciates the quirky, niche stores in Ann Arbor, especially Rock Paper Scissors on S. Main Street. 

“The smaller, more random local businesses are what made me love Ann Arbor so much back when I first visited,” Millen said. “It makes the whole community feel a lot more interesting and diverse.”

Alex Cotignola, Matthew Bilik and Eric Lau contributed to the data collection for this article.

Daily News Editor Hannah Mackay contributed to reporting.

Daily News Reporter Emily Blumberg can be reached at emilybl@umich.edu.