Downtown debate: Should state employees return to the office?

It would not be a stretch to say state government built Lansing.

Before it was chosen as a compromise location for the state’s new capital in 1847, Lansing was “not even a village,” according to a pamphlet from the Michigan Legislature. For nearly two centuries, state employees have been at the core of Lansing’s economic development.

But when the pandemic struck, those employees went home. Many never came back.

While state employees may appreciate the flexibility, downtown businesses have suffered, according to a letter to the governor by Lansing Regional Chamber of Commerce president Tim Daman and Choose Lansing president Julie Pingston.

The Feb. 18 letter urges Gov. Gretchen Whitmer to implement “a unified approach to bringing state employees back to in-person work” to benefit “hundreds of small businesses that rely on a steady customer base.”

“The State of Michigan has recently made a significant investment of $100 million into downtown Lansing,” the letter reads. “Now is the time to generate a return on this investment by ensuring that state employees return to in-person work.”

Michael Mahdi has run The New Daily Bagel downtown since 1987. He said he supports the proposal.

“I hope it’s successful,” Mahdi said. “We need them back.”

Like many downtown businesses, The New Daily Bagel caters to office workers. The store is open from 6 a.m. to 2 p.m., and is closed weekends. Without a reliable stream of customers filling the store at breakfast and lunch, Mahdi said business has suffered.

“Businesses downtown are state employee-oriented,” he said. “When we lose that many people who are working here, of course it’s going to affect us.”

Daman said the proposal is common sense.

“When you have 15,000 to 20,000 people downtown and they are removed from the equation, the economy is impacted,” he said, citing the state as his source for those numbers.

Daman believes that hybrid work “will continue to be prevalent in our economy” but wants to see it applied “across the board.”

“We have some state departments that are doing three days in the office, and we have some that are doing zero,” he said. “We need a little more consistency.”

Pingston did not respond to repeated requests for comment.

While many business owners support workers’ returning, others see an opportunity for Lansing to break free of its dependence on them.

Trisha Kosloski, who opened the Hob Nob coffee shop in 2023 in a former Biggby location, said she understood the proposal’s reasoning but disagreed that it was the best solution.

“I think bringing them back for another extra day in the office might be a good idea, and it would be a temporary boost to the economy downtown,” Kosloski said. “But I don’t think it solves the problem — which we had even before COVID — where downtown stops at 5.”

The difficulty, she said, is that reducing downtown’s dependency on state employees will take time.

“The hard part now is that it’s a waiting game,” she said. “There are at least talks and plans to turn some of those vacant office buildings into apartments, especially affordable housing, and that would be huge for downtown.”

“It would be nice to have more LCC and Cooley students living downtown,” she said. “The only way you’re going to break out of that 9-to-5, weekday grind is to have residents that live within these blocks.”

Scott Bean, Mayor Andy Schor’s communications director, echoed Kosloski’s hopes and concerns.

“The pandemic showed that we can’t rely solely on workers downtown,” Bean said, “so we are focusing on adding more housing and amenities to have options for everyone.”

Bean said the city was “working with developers on several fronts,” including building 700 new housing units,  City Hall’s transformation into a hotel and The Ovation music and arts venue, which he expects will bring people downtown on nights and weekends.

While the Mayor’s Office “would love to see more employees from many sectors back downtown to cap this all off,” it supports less reliance on state government.

No state employees the City Pulse reached out to responded to a request for comment, but some were quick to voice their concerns on Facebook.

Michigan Department of Health and Human Services employee Jenny O’Donnel Chapman said returning employees to the office was “not a one size fits all decision.”

“Many workers are more productive working remotely,” Chapman said. “If brought back to the office full time, I will not be frequenting businesses during my 30-minute lunch or on my commute back home.”

“I’m so sick of the downtown restaurant owners’ relying on captive consumers to make their money so that they can only be open for 4-5 hours a day and close on the weekends,” Joris Jansen wrote. “Adapt your business model to the changing times or go under.”

Environmentalist Heather Douglas said a work-from-home model could have a positive environmental impact, but that there were complicating factors. For instance, vacant office buildings still need to be kept at the right temperature to prevent damage to their pipes.

“Bringing in more workforce would increase the lighting demand and other electrical usage, but you’d have to heat and cool the buildings either way,” said Douglas, president of the Capital Area Friends of the Environment.

Douglas said she would like to see the buildings turned into affordable housing.

The Hob Nob’s Kosloski said such an outcome would save taxpayers money.

“If workers’ productivity is still doing great and overhead is being saved, then it’s saving us tax dollars,” she said.

State House Speaker Matt Hall, R-Richland Twp., endorsed Daman and Pingston’s proposal.

“All these state office buildings are empty, and I don’t know where these workers are, but the Lansing Chamber of Commerce wants to know,” he said. “We’re going to be looking very carefully at the bureaucracy and the departments, and understanding why it is that these workers are all working from home, and would they better serve the people of Michigan if they were in their offices doing work?”

The legislative branch does not hold the power to return state employees to the office, but Hall’s comments echo federal efforts to streamline the federal bureaucracy. No house Democrats have endorsed the proposal.

Daman said he was surprised to see the issue become partisan.

“I’m not sure I see how it becomes partisan politics,” he said. “Our intent here would be that this is bipartisan.”

Daman also said freeing downtown Lansing from relying on state government was unrealistic. 

“People can say you need to focus on anything other than the government, but that’s not how it works,” he said.

“We are the state capital. This is what defines our region.”