As MSU goes, so goes the local economy. But how does it go?

COVID-19 and the local economy

“What does Michigan State look like in September, what does GM look like, and what does state government look like? They are going to set the tone for us and determine what our region is going to look like.””

Tim Daman, president and CEO of the Lansing Regional Chamber of Commerce

(This is the first in a three-part series, “Covid & the Economy,” that looks at the impact of the pandemic on the three legs of Greater Lansing’s economic “stool.” This week: MSU.)

This story is paid for by readers like you through contributions to the CityPulse Fund for Community Journalism. To contribute, please go to lansingcitypulse.com/donation.

The COVID-19 pandemic has disrupted lives and created anxiety in ways few people have experienced. The recovery will take months, if not years. And for some communities, complex decisions yet to be made could impact that recovery time.

In the mid-Michigan region, Michigan State University has decided to bring students back to campus on Sept. 2. However, in his announcement on May 27, President Samuel Stanley also said students would have the option to continue taking classes remotely. The answers to when, how, and how many students return to campus will have a profound impact on tens of thousands of lives and livelihoods in the region.

Michigan State University has more than 50,000 students plus approximately 12,000 faculty and staff. The university’s economic impact on the region is $3.1 billion annually, according to a 2017 Anderson Economic Group study.

MSU established a task force to review myriad issues involving students returning to campus. It is anticipated Stanley will receive its recommendations in July.

MSU’s executive vice president for health services co-chairs the task force with the university physician. Plus, Stanley is an infectious disease specialist.

Health first

The healthiest and safest decision for the campus will be a key deciding factor for Stanley when weighing options, according to Emily Gerkin Guerrant, vice president and university spokeswoman.

“We never really closed, so it’s a misnomer to say reopen, but that is the common term people are using,” Guerrant said. “We will be here in some capacity in the fall, although it will likely be a hybrid situation.”

She noted that classes in large lecture halls common in a student’s freshman and sophomore years are likely to stay online. As for other courses, the university is looking at different scenarios.

“Where can we have more in-person engagement?” Guerrant said. “We are planning for multiple scenarios. If CDC recommendations say no more than 10 or 50 people in a group, how does that affect students in residence halls, dining halls, and classrooms?”

Another wrinkle is addressing concerns of MSU faculty.

“We have a lot of faculty who are in the vulnerable population,” Guerrant said. “This is about protecting the faculty and staff, as well, and are they comfortable teaching students in a classroom setting?”

To East Lansing Mayor Ruth Beier, the health of the students and East Lansing residents should take precedent over re-engaging the economy.

“This is the university’s decision,” Beier said. “The administration keeps us apprised, but we are not on the taskforce. They haven’t asked us for input, but what Dr. Stanley is trying to do is protect the health of the students at MSU, and that’s his job to do.”

According to Beier, MSU students compose half of East Lansing’s population when they are in town, and the impact of not having them around for shopping, patronizing restaurants and bars, or serving as an employee base for businesses would have a significant effect.

“If students don’t come back, that’s huge for what will happen to area businesses, property values, property tax revenue, income tax revenue, and the viability of our downtown,” Beier said. “It will force some businesses to go out of business for good. On the other hand, students are safer where they are now.”

And so are area communities because, as Beier noted, the students aren’t bringing any illnesses to campus with them.

“When students get back to campus or in the neighborhoods … they aren’t very good social distancers,” Beier said. “Most of the neighborhoods have good relationships with students who live there. I hear from people who don’t have relationships with students and are worried about them returning.”

An economic pillar

For the region as a whole, Michigan State University is still a key economic pillar, despite attempts to diversify the local economy, according to Tim Daman, president and CEO of the Lansing Regional Chamber of Commerce. He said the chamber is closely watching the “three legs of the stool” in the regional economy for indications of what a post-pandemic mid-Michigan resembles.

“What does Michigan State look like in September, what does GM look like, and what does state government look like?” Daman said. “They are going to set the tone for us and determine what our region is going to look like.”

Daman added another decision for state and local governments and business owners is how to reopen bars and restaurants, which is complicated even further in a college town.

“Do they allow a 25-percent or 50-percent capacity and provide for social distancing?” Daman said. “You get 50,000 kids, some away from home for the first time and now in a post-pandemic environment — how do they handle themselves?”

Beier said the city of East Lansing is looking at innovative ways to help ease the post-pandemic concerns for bars and restaurants.

She explained the city is planning to close Albert Avenue between the city parking ramp and MAC, as well as using two city parking lots in the area, to provide picnic tables for restaurant and bar patrons.

“That way, people can get their food and maybe drinks and eat outside,” Beier said. “You wouldn’t need a lot of employees for that model — you need cooks and some servers, but people are mostly taking food to go.”

She said the city is working with the state Liquor Control Commission on how to accommodate patrons taking alcohol outside.

Ongoing economic impact studies by the Anderson Economic Group in East Lansing have shown the many ways universities positively impact their communities. But if you remove students from the equation while shuttered businesses attempt to reopen, it may be too much for some small businesses already teetering over the edge, according to AEG CEO Patrick Anderson.

“Particularly in the restaurant and hospitality industry, this will be the event that is the cataclysm that ends their continued operation,” Anderson said. “There is going to be a cascade of bankruptcies. When you take small businesses, in particular, and shut them down for two straight months — even if you provide generous unemployment benefits for their employees — the owners and managers and customers often can’t hang on that long. The damage from this extended shutdown will be so deep that many small businesses will not survive.”

How to balance health concerns and economic mayhem is the question to which there are no easy answers.

Guerrant noted the university is looking at what requirements it can put in place.

“We have been following CDC guidelines, and we are looking at whether we could require masks on campus. Could we require testing, and what would that look like?” Guerrant said. “We can impact what happens in on-campus housing. And we could look at requiring masks for everyone if they are in contact with others once they are on campus.”

But the university’s control ends at the edge of campus. And Guerrant said that while 85 to 90 % of first-year students live on campus, that number drops quickly as students age. By sophomore year, only 25 percent are still living on campus. In total, about 70 percent of MSU’s 50,234 students last year lived off-campus.

Off-campus housing is another sector of the regional economy and one that has seen a recent construction boom in and near East Lansing.

“I’ve heard from rental property managers who are concerned,” Beier said. “Let’s say MSU decides the safest thing is not to let students live in dorms or only one-quarter of students that normally live there live in dorms. That would increase the demand for rentals in the neighborhoods and the new buildings, which would be good for those property owners.”

But what if a lot of students choose to take their classes remotely?

“Some small landlords that have just one or two houses might just get out of them,” Beier said, noting that many people might not be able to afford the mortgages and upkeep on rental properties if they don’t have renters.

International students

Regardless of how many students return to MSU’s campus in the fall, the population of international students is likely to be much smaller.

Guerrant noted that a large number went home and now face the possibility of not being able to get back into the U.S. for a while.

“We are looking at what accommodations we can make to take classes remotely from other countries for students who want to remain Spartans but could have difficulties getting back due to travel restrictions,” Guerrant said.

If the university does that, it leads to another complication. How do faculty handle teaching students who are living in significantly different international time zones?

According to Stanley’s recent announcement, MSU is taking A tact similar to other schools around the country, wrapping up in-person classes for the fall semester by Thanksgiving. That way, students aren’t going back and forth from campus to their hometowns in such a short timeframe around the holidays.

The uniqueness of the COVID-19 pandemic means decisionmakers are having to wing it, with little reference in modern history to rely upon for examples.

“We have never had anything of this magnitude,” Guerrant said. “We have dealt with meningitis outbreaks, H1N1 and other flus. But we have not had anything with an impact this broad and wide. We have never had to move all classes online within a matter of days.” 

Many people around the region are anxiously awaiting the university’s decision on how to move classes and students back to campus. 

“I’m not optimistic that we can change student behavior,” Beier said. “I’ve tried it as a resident, and as mayor, and the police have tried.”

Beier noted that keeping the city’s police officers healthy will be another challenge if students return not just to classes but to socializing as they did pre-pandemic.

“I’m not going to put our police officers at risk by sending them in to break up a big party,” Beier said. “They would need to socially distance while trying to break up people who aren’t social distancing. That’s not easy to do.”

That’s another reason Beier is concerned about students flooding back into town.

“It’s not good for MSU and not good for East Lansing, but I would not open a campus of 50,000 people and try to keep them socially distanced until there’s a vaccine or a good treatment,” she said. “That would be the end of many small businesses in East Lansing, but I would choose health over the economy in a college town. But, as mayor, I don’t get to make that choice.”

Before forming a communications consultancy, Ari Adler served as Michigan Gov. Rick Snyder’s director of communications, overseeing media and public relations from 2016 to 2018 on local, state, and national issues. Adler began his career as a journalist, working as a reporter and editor for several newspapers across Michigan. He earned his bachelor’s degree in journalism from Michigan State University, where he served as an adjunct instructor for 12 years, teaching courses on news reporting, public relations, and social media.