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On May 15, persuaded that COVID-19 infections and deaths were convincingly low, Governor Gretchen Whitmer (D) lifted the executive order that for eight weeks had closed most businesses in Benzie and neighboring Northern Michigan counties. Six months later, as COVID-19 infections and deaths mounted as never before in Benzie and the rest of the state, the Michigan Department of Health and Human Services reinstated parts of the shutdown\u2014calling for a three-week \u201cpause\u201d\u2014from November 18 through December 8. \u201cWe\u2019ve been trying to hire someone for both an office and housekeeping position,\u201d says Lisa Schroeder-Confer, the resort\u2019s operations manager. \u201cWe are struggling to find people.\u201d
The escalation of disease has again invited all manner of dark forecasts for personal safety and private business. But between those two dates in May and November, an unexpected season of prosperity unfolded in Benzie County. Significant economic sectors experienced high summer and fall seasons and, in some cases, record revenues.
Homes and land sold at the highest prices in history and at a pace not seen since the 1990s. Car sales were very strong. Summer occupancy rates for hotels, lodges, cottages, and campgrounds were at peak levels. Food store sales were historically high. Restaurant sales were healthy, even with state restrictions on indoor dining.
In effect, the wicked virological rebellion that economists anticipated in March instead generated feverish new business by June. Surprisingly large numbers of summer and fall visitors demonstrated the folly of predicting the future. Sleeping Bear Dunes National Lakeshore, which set records in July and August, is on track to host more visitors than any year since it was established 50 years ago.
Benzie County\u2019s business trends also mirror the experience of neighboring counties and what occurred statewide. At 5.5 percent, Michigan\u2019s October unemployment rate was among the country\u2019s lowest.
\u201cIf we look at March and April, during the shutdown, the volume of new and used vehicle sales was down 50 percent. Our service and parts department volume was down 25 percent versus 2019,\u201d says Tom Stapleton, the controller at Watson Benzie, the Chrysler Dodge Jeep dealership that has operated in Benzonia since 1921. \u201cAfter the shutdown lifted in May, the business climate completely changed. May thru October sales surpassed the volume of the same period during 2019. For the year, we have been able to climb almost all the way back\u2014our total new and used automobile sales totals are now within 6 percent of the 2019 volume.\u201d
Watson Benzie\u2019s experience is consistent with other Benzie businesses.
\u201cApril and May were practically zero,\u201d says Jack Gyr, founder and president of Field Crafts, an Honor-based screen printer and embroiderer that has operated in the county since 1977. \u201cJune just hit like crazy. We\u2019re back at it. July, August, and September were very good. October, we were ahead of last year.\u201d
The business climate was so strong that Benzie County\u2019s unemployment rate in October was just over 6 percent, among the state\u2019s lowest. Far from being concerned about slow sales, business owners interviewed for this article almost uniformly complained about two unwelcome features of the pandemic season: customers reluctant to wear masks and a labor shortage.
Chimney Corners, the Crystal Lake resort that has operated for 85 years, filled its cottages and apartments during the summer and enjoyed a 30 to 35 percent increase from last year in room occupancy during the \u201cfall color\u201d season. The busy seasons stressed the resort\u2019s staff.
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David Zin, chief economist for the State Senate Fiscal Agency\u2014the legislative unit that helps to prepare the annual state budget\u2014says he was baffled by the state\u2019s economic performance this year. Revenue to the state treasury vastly exceeded projections that he and his colleagues had made in May.
Auto and truck sales, for instance, are at record levels. Monthly receipts of vehicle sales taxes have exceeded $100 million just 10 times in Michigan history\u2014five of those months have occurred since June, including the record $123 million that the state gained in July.
Not only were taxes collected from vehicle sales up\u2014July sales tax revenues overall were up 18.5 percent compared to July 2019.
Zin also notes that credit card spending in Michigan increased nearly 12 percent this year, the largest increase in spending of any state. In October, the last month with available data, Michigan consumer spending was up 6 percent compared to January, before COVID-19 hit the United States. However, consumer spending nationally as a whole was down 6 percent in October. The message is that Michigan is doing better than expected and better than many other states.
\u201cMichiganders seem to be spending money hand over fist,\u201d he says. \u201cWe\u2019d like to know where they are getting it.\u201d
Until rigorous academic and economic analysis occurs, the answers are multidimensional and anecdotal.
Congress approved $3.6 trillion in federal spending to aid industries and for unemployment benefits and direct payments to adults and children. Federal monetary policy encouraged low-interest loans and mortgages and kept inflation low. Auto companies offered a multitude of attractive incentives. Fuel prices, in constant dollars, are the lowest in history. Families changed spending habits and vacation choices, especially foregoing air travel to distant regions in favor of destinations closer to home\u2014most importantly, outdoor activities are safer.
Benzie County stood at the center of the path paved by all of those trends. The pandemic, which produced scores of online meetings and freed workers from lengthy metropolitan commutes, is a significant factor in the galloping interest for Benzie homes and land.
\u201cWe have people coming from California, Washington State, Texas, and Missouri,\u201d says Jon Zickert, lead realtor for The Jon Zickert Group with offices in Beulah and Frankfort. \u201cWe had one potential buyer who works for Amazon. He was told he can work anywhere and is now looking here.\u201d
Honor Bank is a central player in the soaring housing market. The bank\u2019s residential mortgage activity is double what it was in 2019.
\u201cBy and large, it\u2019s been a surprisingly strong summer and fall season,\u201d says Norman Plumstead, bank president and chief executive. \u201cResidential mortgages are off the charts. It\u2019s not what we would have expected in March at all.\u201d
The volume of paperwork at the county\u2019s permitting office and Register of Deeds reflects the trend.
Benzie recorded 302 more mortgages and 115 more deeds so far this year than it did during the same period in 2019. County and state transfer tax revenue totaled $1.3 million, almost 13 percent or $163,000 more than the same period in 2019.
\u201cI am on my association board as secretary, and the word is that this is happening all over the state,\u201d says Amy Bissell, the county registrar. \u201cThis has been our busiest year in my 30-year career here.\u201d
Additionally, Benzie County issued 165 building permits in July, August, and September: 33 percent more than the same period last year. Contractors\u2014and men and women working in the skilled trades\u2014were in such high demand that building projects that buyers wanted to start in 2020 must wait until next year.
Businesses that supply materials and tools for construction and renovation also did well. After the \u201cstay-at-home\u201d order was lifted in May, people began buying treated lumber at volumes rarely seen, says Doug Rodriguez, vice president and general manager of Honor Building Supply, which has operated since 1963.
\u201cPeople were home working and said to themselves, \u2018You know. Maybe it\u2019s time we redid this deck,\u2019\u201d he says. \u201cThere was a lot of redoing decks this summer.\u201d
Could the pandemic and its unanticipated effect on Benzie County signal the start of an era of growth fostered by online careers? Or will it turn out to be a summer defined solely by a brief and surprising burst of recreational and real estate spending? In other words, says Norm Plumstead of Honor Bank, there is no way to tell if all the activity this year will last.
\u201cIt remains to be seen if this period is a sustainable trend versus a peak,\u201d he says.
The county\u2019s restaurant owners live with the uncertainty\u2014so far, nationally, one in six restaurants has closed permanently or long-term because of COVID-19. But many eateries in Northern Michigan were able to make use of outdoor dining over the summer months.
Stormcloud Brewing Company, which operates a downtown pub and a separate tasting room down the road for its two-year-old bottling plant in Frankfort, experienced the high and low tides of operating during the pandemic. Stormcloud managers adhered to the state directive and closed half of their indoor tables. Though year-on-year business was down 15 percent, customer traffic to outdoor dining was strong, says Rick Schmitt, Stormcloud\u2019s co-owner.
\u201cWe had a relatively warm and dry summer,\u201d he says. \u201cWe were able to keep our head above water. The outdoor space, without question, saved our business.\u201d
Beer sales from the Stormcloud brewery rose steadily through the summer. But the state\u2019s November shutdown prompted customers to cancel orders for kegged beer, which is half of the brewery\u2019s production.
The November executive order also caused more woe for The Garden Theater, another of Schmitt\u2019s Frankfort businesses. Normally, The Garden Theater sells 12,000 movie tickets during the summer. This year, it was zero.
\u201cIt\u2019s been really devastating,\u201d Schmitt says.
Crystal Mountain, the year-round sports resort in Thompsonville and the county\u2019s largest private employer, added shields at work stations and spent hundreds of thousands of dollars to ensure customer and staff safety by updating indoor air-circulation and filter systems.
Closed for two months starting in March, the resort reopened in May. Room sales surged, along with golf bookings. The interest for indoor events\u2014conferences, meetings, weddings\u2014is low but advance reservations for the winter ski season are up 10 percent over 2019.
\u201cWe\u2019ve done okay, because we\u2019re one of the businesses that\u2019s in a fairly good sweet spot,\u201d says Jim MacInnes, president and chief executive of Crystal Mountain. \u201cOur product is outdoor recreation. And we\u2019re a regional destination resort. You don\u2019t have to get in a plane to get here.\u201d
As coronavirus cases climb, economists are again projecting a long and difficult recovery that could take years to bring the state and the nation back to anything resembling full employment.
\u201cYes, we had a strong initial part of the recovery from the COVID recession, it was stronger than expectations,\u201d says Dr. Gabriel Ehrlich, an economic forecaster at the University of Michigan, where he is the director of the Research Seminar in Quantitative Economics (RSQE). \u201cWe could still be in for a tough four or five or six months until a vaccine really starts rolling out\u2026 and in our forecasts, we expect the high-wage industries [of $75,000 annual income or more] to recover by the end of 2022, but we expect the low-wage industries [of $40,000 or less] to be about 8 percent lower two years from now than they were pre-COVID.\u201d
Such forecasts fit conditions that existed in Benzie County before the pandemic.
The 21st century has not been especially hospitable to Benzie County. Enrollment in public schools declined and graduates moved away. Summer unemployment climbed to 11 percent in 2011. The number of people living in poverty climbed to over 13 percent, nearly double what it was in 2000.
In a sharp turn from the county\u2019s 1990s dynamism, when every Beulah storefront was filled and the county\u2019s population increased 31 percent\u2014more than all but one other Michigan county\u2014Benzie residents grew older and grayer. The population stalled at around 17,500. From 2008 to 2013, equalized real estate values fell $313 million, or nearly 18 percent, according to county figures. But this year, the equalized real estate value climbed to nearly $1.9 billion, just over 4 percent more than in 2019.
Thus, the more resonant economy of the summer and fall of 2020 feels different and durable in more ways than just data and metrics. The pandemic produced greater regional and national interest in Benzie County among people who do not live here. And it appears to have influenced resident attitudes about the county\u2019s relevance as a choice place to live and do business.
One signal event that accompanied the pandemic was the $564,000 federal grant awarded in June to Benzie Bus to purchase electric vehicles for its fleet. Another occurred in November: by a healthy margin, county voters approved a small property tax increase to finance construction of a $19 million elementary school and nearly $20 million more for renovating existing facilities for Benzie County Central Schools. After years of disapproval, residents recognized the value of public schools as a civic institution, central to encouraging young families to settle here and add to the region\u2019s economic and cultural vitality.
Who knew? A dangerous virus\u2014and how people responded to its risks\u2014clearly influenced business revenues and civic engagement. It also may signal the start of a new era of promise. <\/p>\n\n\n\n