Business groups start push to ease restrictions on office work – Crain’s Detroit Business

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Business groups start push to ease restrictions on office work – Crain’s Detroit Business

Michigan's 3-week-old reopening of dining inside a restaurant or bar is hardly noticeable in Detroit's Renaissance Center. That's because there's h

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Michigan’s 3-week-old reopening of dining inside a restaurant or bar is hardly noticeable in Detroit’s Renaissance Center.

That’s because there’s hardly anybody occupying the skyscrapers above to frequent the restaurants below.

The state’s continued ban on working inside office spaces has crimped the relaunch of hospitality businesses that cater to working lunch meetings, happy hours and dinner gatherings that were routine a year ago before a once-in-a-century pandemic upended daily habits.

Inside the nearly vacant Renaissance Center, home to 5,000 General Motors Co. employees working from home since last March, fast-food options for office workers such as Zoup!, Panera Bread, Fish City, Gyroland, Starbucks and Rice Bowl Express remain closed.

On the 71st and 72nd floors, the Highlands steakhouse is only open for dinner. Its adjacent Hearth 71 gastropub has not yet reopened.

The Fuel bar in the lobby of the Marriott lobby is closed, leaving the hotel’s few guests with the option of getting a bottle of beer out of the cooler of a cafe with so few employees working that a sous chef was manning the register one afternoon last week.

The Coffee Beanery in the RenCen’s 300 tower has closed for good, but is so far the only restaurant vendor that has opted not to renew its lease, said Natasha Kosivzoff, senior real estate manager for CBRE, which manages the RenCen’s retail and restaurant space for GM.

“The traffic is not what it was prior to COVID,” Kosivzoff said.

With COVID-19 cases, infection rates and hospitalizations at a four-month low, business groups are starting to lobby Gov. Gretchen Whitmer’s administration to let worker traffic start trickling back into downtowns and suburban office parks.

The “Big Six” business advocacy organizations — the Michigan Chamber of Commerce, Michigan Manufacturers Association, Small Business Association of Michigan and the regional chambers of commerce in Detroit, Grand Rapids and Lansing — sent the governor a letter Feb. 19 making their case for easing restrictions on office work.

Office work that can be done from home remains effectively banned under MDHHS epidemic orders in an effort to mitigate potential community spread of the virus.

But with spring quickly approaching and COVID vaccination rates rising, talk of returning to the office is now becoming a daily conversation, particularly among Detroit’s larger employers, said Eric Larson, CEO of the Downtown Detroit Partnership.

“The reality is, some of it is going to be a dependent upon what the continued (COVID) restrictions are,” Larson said. “Do you continue to have restrictions on the number of bodies, for instance, that can be in an elevator at any one time?”

The Michigan Occupational Safety and Health Administration has required six feet social distancing between occupants on an elevator, often restricting capacity to two people per car, depending on its square footage.

Sean Egan, director of COVID-19 workplace safety for the Michigan Department of Labor and Economic Opportunity, the state agency that includes MIOSHA, sees elevator access as a “huge challenge,” particularly in older high-rise buildings in Detroit with smaller waiting areas.

“That’s probably the biggest challenge to all of this is how do you get thousands of people up to their place of work when you have an elevator that’s 20 square feet,” Egan said. “If you think of the crunch points in an office space, that’s probably the main one.”

Several downtown Detroit employers are contemplating near-term changes in employee schedules to stagger access times at doorways and elevators to reduce the risk of spreading the virus, even with employees in masks, Larson said.

“The physical infrastructure is also going to play a role in how many people come back, how quickly they come back, what does the work week look like,” Larson said. “All of those (factors) is going to play into it.”

Rocket Companies, the parent company of Quicken Loans and a portfolio of other Dan Gilbert-owned businesses, has about 2 percent of its nearly 18,000 employees working downtown performing essential functions that can’t be done remotely, spokesman Aaron Emerson said.

Jay Farner, CEO and vice chairman of Rocket Companies, said in a recent interview with Crain’s Publisher KC Crain that the mortgage company is restructuring its office space to accommodate a hybrid of in-person and remote work.

Inside One Campus Martius, Farner said, conference rooms are being outfitted for video technology that will “allow three people to be in the room and six people outside of the room — or vice versa — and have these seamless meetings because we’ve demonstrated that can be done and it can be done in a really productive fashion.”

“Maybe before the pandemic, I think we didn’t believe that,” Farner said on a Crain’s Newsmakers webcast.

Farner said there’s a segment of Rocket’s workforce that wants the flexibility to work from home to care for children.

“(Other) team members are always asking, ‘When can I get downtown? What’s going on?'” Farner said.

At the high point of 2019, there were about 80,000 downtown Detroit workers and up to 125,000 working in the greater downtown — Midtown, New Center, Corktown — before the pandemic hit, Larson said.

DDP estimates about 25 percent of those workers are coming into the office at least once a week to perform tasks that cannot be done remotely, Larson said.

“Most of the larger employers are sort of saying midyear — they’re feeling fairly comfortable that they’re going to start bringing people back in a more consistent and more dense manner, so June-July,” Larson said. “Some are already starting to plan for executive teams and some of the key leadership to start back in the office as early as March.”

That’s mostly anecdotal, Larson said, based on conversations he’s had with downtown business executives. Starting next month, DDP plans to begin monthly surveys of its members’ plans to return to the office.

GM’s 5,000 employees assigned to the RenCen headquarters will continue to work remotely through June, spokesman David Caldwell said.

Lobbying of the Whitmer administration to loosen restrictions on office work comes as the Republican-controlled Legislature remains at odds with the Democratic governor over her general strategy to control economic and human activity as a means to controlling the virus.

The governor has pointed to COVID-19 data showing the infection curves bending downward after she and her health department have shuttered public-facing businesses, particularly restaurants and bars where patrons are maskless.

The recent letter from the presidents and CEOs of the six business organizations to Whitmer argued there are “not only productivity, innovation, collaboration and mental health” issues to consider for employees working from home, but that remote work “also has put an incredible strain on our communities.”

The city of Detroit is projecting an $85 million loss in city income tax this fiscal year from thousands of nonresident workers doing their jobs from home and legally claiming to be exempt from the 1.2 percent city income tax.

The projected loss is about 25 percent of the city’s entire individual and corporate income tax receipts in the 2019 fiscal year, according to city budget data.

Whitmer’s office was noncommittal last week when asked when restrictions on office work may be loosened.

“While we always welcome feedback from stakeholders, the health and safety of Michigan residents is our top priority,” Whitmer press secretary Bobby Leddy said in a statement. “Some jobs do not require in-person work, and at present MIOSHA rules require employers in those sectors to allow their employees to work from home to maximize safety, unless it is not feasible to complete work remotely.”

Although the state’s regulations prohibit office work if it can be done remotely, there are businesses that have already returned some portion of their workforces to the office for the ease of collaboration, use of office equipment for performing various tasks and in-person client meetings.

MarxModa, a dealer of Herman Miller office furniture, has a “variable presence of about 10 different people” in its sales, design and leadership teams working daily in its downtown Detroit office at 751 Griswold, the former First State Bank building, said Whitney Marx, a principal in the firm.

Employees are given a choice of working from home or coming into the office, where mask-wearing and social distancing is mandatory, “and will continue to be important for some time,” Marx said.

“Ultimately, we are most concerned with the safety and comfort of our staff, and recognize that for some people who have close family members who are more vulnerable to illness or may be vulnerable themselves, it’s not time to return yet,” Marx said in an email to Crain’s.

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