Michigan communities create alcohol 'social districts' to boost downtowns

Sheldon Krause
Capital News Service
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As warm weather descends on Michigan, 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 creates areas between restaurants in the districts where alcohol in marked containers from these businesses may be consumed.

The idea is growing as communities hope for summer boom and as residents look for fun outdoors after months of isolation.

Northville is creating a "social district" to help boost its downtown aside from other initiatives and activities, like the annual Fourth of July parade.

So far, 39 cities and villages have authorized social districts in 23 counties. They include Wyandotte, Northville and Mount Clements as well as Petoskey, Dundee, Saugatuck, and Ludington outstate.

The push for social districts might not have succeeded without the pandemic, said John McNamara, the vice president for government affairs at the Michigan Restaurant and Lodging Association.

“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 said. “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 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,” Goodman 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.”

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 said since information about Greenville’s proposed social district became public, a resident has expressed interest in opening a business downtown.

McNamara said while social districts appear to benefit nearly every party involved, communities should have realistic expectations. 

“In terms of overall economic impact in Michigan, it’s helped restaurants survive," he said. "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."

Sheldon Krause writes for Capital News Service.

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