Could health inspection status hurt Detroit’s small businesses?

Some restaurant owners and industry groups are demanding more engagement over a proposed ordinance that would make Detroit the first city in Michigan to establish a health inspection grading system. 

Council Member Scott Benson, who represents District 3 on Detroit’s northeast side, champions the ordinance, which would require food establishments to display color-coded signs showing their level of compliance with health standards, as a way to help customers better understand where it’s safe to grab a bite. But business owners are raising concerns about the potential impact the law could have on their livelihoods.

While the ordinance doesn’t change how inspections are performed, some are wary that the color-coded signage could deter customers from eating out and make it harder for small businesses to bounce back from more than two years of hardship during the COVID-19 pandemic. Food trucks licensed outside the city wouldn’t be required to comply with the ordinance while serving food in Detroit.

“Multiple members have called the orders a scarlet letter,” said Charity Dean, president and CEO of the Metro Detroit Black Business Alliance, who formerly headed the City of Detroit’s civil rights and inclusion division. “The concern is that restaurants have been impacted really harshly by COVID. One of our members said it seems like the city is always trying to find ways we’re not right, but never looking at themselves and their processes in that same way.”

Benson convened two June meetings for businesses to learn about the proposed ordinance, but some restaurant groups said they weren’t notified and only learned of the legislation late into the process. The City Council’s Public Health and Safety Standing Committee recommended last week that the ordinance be approved by the full council when it returns from summer recess on Sept. 5. If approved, Detroit would be the only city in Michigan to display a grading system based on inspection outcomes. 

“There are no new fees here, there are no new inspections, inspections don’t change,” Benson said in an interview with BridgeDetroit. “This is all about education, transparency and public health. This is about letting residents and customers know that the restaurant where they’re eating prioritizes food safety and their health and they can feel safe and confident in their family’s food.”

Color-coded system

If passed, the ordinance would require businesses to post the results of their most recent health inspection and licensing status on a city-issued sign. The signs must be visible from outside and include a QR code that links to inspection reports and an explanation of the food grading system. 

Four color coded signs are used – green for restaurants in compliance with city regulations, white for restaurants with uncorrected violations, yellow for businesses placed in the city’s enforcement process and red for businesses ordered to close over health problems. 

Restaurant inspection data is already available on Detroit’s open data portal. Anyone can search the database to learn about the result of recent inspections. Grocery stores, liquor stores, and other packaged food establishments are inspected by the Michigan Department of Agriculture & Rural Development and are not included in the data.

Timothy Tharp, owner of Checker Bar, Grand Trunk Pub and The Whiskey Parlor, said distilling health inspections, which could include pages of detail and nuanced findings, into a color grade is “negligent and dangerous.” 

“It’s a very bad solution in search of a problem that doesn’t exist,” Tharp told BridgeDetroit on Friday.

Benson said he’s trying to protect residents who don’t have access to health insurance and would suffer severe consequences from food poisoning. He’s been working on the ordinance for three years – though the pandemic delayed its introduction, Benson said. 

“If you’re a low-income resident, you go to eat at somebody’s restaurant and get a foodborne illness, you can’t go to work, you don’t have reliable transportation, you lose your job,” Benson said.

Dean said restaurant groups are using the council’s recess period to meet with members and gather feedback. While MDBBA does not have an official opinion on the ordinance yet, Dean said it’s created anxiety among Black-owned businesses.

“I’m very concerned about small Black-owned businesses off commercial corridors that don’t  have relationships with the city to call someone and get a health inspector down,” Dean said. “I’m very concerned about the restaurants that get one health inspector who says one thing and another (health inspector) who says another thing. I’m very concerned about the economic impact that it will have on our members, and that’s why we need time to review it.”

Dean said members of the alliance have said showing compliance with health regulations could be a great marketing tool, but it’s a risky proposal. 

“We don’t trust the city; we have trust issues here with these processes,” Dean said. “That’s real, and you can’t ignore that.”

‘Another step’

Benson said his constituents are in favor of the ordinance, but he acknowledged restaurant owners are critical.

“I’m not going to go as far as to say restaurants are in favor of it,” Benson said. “It’s another step. I mean, how many people actually go out and say, ‘hey, councilman, give me one more step?’”

A recent report from the Institute for Justice found Detroiters already face 77 steps to open a restaurant. Licensing and permitting fees can cost an average of $6,545, which is more expensive than Atlanta, Boston, New Orleans and New York. The report found cost, delays and complexity imposed by the city’s regulatory process too much for some small businesses to get started.

Melanie Markowicz, executive director of the Greektown Neighborhood Partnership, said adding to that complexity would create more burdens for people trying to start small businesses. Markowicz said every restauranter she’s talked with is opposed to the food grading ordinance. 

“This is going to add further regulation where enforcement capacity and red tape create further barriers that will inhibit business,” said Markowicz, who heads the nonprofit dedicated to a vibrant Greektown. 

Benson argues there is “no connection whatsoever” between business licensing and health inspections. 

“I want to deconflate the connection of business licensing from health inspections,” Benson said. “There’s no additional regulations, except you have to post the results which are already posted by the city online. So people talk about the process to open a business – these two are completely separate.”

Benson said restaurants should embrace the opportunity to show they’re serving up safe food in a clean environment. 

“What the restaurants do say is ‘Scott, I can deal with this and I’m not scared of it because I take pride in the food handling and cleanliness of my restaurant,’” Benson said. “The negative impact of the pushback is now people look at those pushing back and say ‘well, what do you what do you have to hide?’”

Another major concern among restaurant groups is the responsiveness of city health inspectors. 

The Detroit Health Department performs 200-400 inspections per month, according to its website, and typically follows up within 30 days to check whether restaurants have resolved violations.

Restaurant groups said waiting a month to change a white sign to a green one could be a steep penalty for a business’ bottom line, especially if violations are corrected within days. 

“The Detroit Health Department is one of the most thorough, fair, firm and consistent departments,” Tharp said. “But here’s the thing: That department is stretched very thin. I know they would make their best effort to get back out and reinspect to change the letter grade if something needed to be fixed. Even if it’s three days or one week, that’s too much.”

Benson said it’s a “legitimate concern,” that’s why the Health Department received a $200,000 budget increase. There are 12 inspectors and three supervisors covering the city; two health inspectors will be added with the additional funds. Benson said the allocation also pays for a marketing campaign to inform Detroiters about the grading ordinance. 

For Clarence Gayles, executive director of the Detroit Restaurant and Lodging Association, 14 health inspectors isn’t enough. 

“In a city the size of Detroit, they would really have to be pumping to cover it all with two more (health inspectors),” Gayles said. “To me, it’s almost laughable … I would love to see 30, and I think that’s a reasonable number for something that’s so important to the health of Detroiters.”

Benson said the food grading ordinance was drafted in response to a Hepatitis A outbreak that swept Michigan from 2016-18. At the time, cases were linked to restaurants where food workers were found to have the virus. 

It also was motivated by the temporary closure of a Popeye’s restaurant on the east side in 2018 due to unsanitary conditions, Benson said. Detroit Health Department reports show a routine inspection two years later found three violations at the restaurant. Records do not show any follow up inspections since September 2020 and the store remains open.

What’s the rush?

Tharp said the ordinance will punish local restaurants that have helped drive growth in the city and added to its unique character. He argued that Detroit doesn’t have a widespread problem with foodborne illness and locally-owned establishments shouldn’t have to pay for the mistakes of a conglomerate. The food grading ordinance would make Detroit less attractive for new restaurant growth compared to neighboring cities that don’t require the signage, he said. 

“I would have a much different opinion of this if it was proposed in the whole tri-county area,” Tharp said. “​​Why would you open up in a city that has more regulation, and public-facing regulation that can be weaponized by your competitors? Why would you do that to yourself?”

Gayles said the DRLA, which represents 300 restaurants and lodging establishments in Detroit,  is not entirely against the proposed ordinance, but there are questions and concerns that need to be addressed by the city.

“There are a lot of mom and pop restaurants or even larger restaurants that aren’t part of the Michigan Restaurant Lodging Association or DRLA who will not have any idea what’s going on with this,” Gayles said. “I just don’t see what the rush is. More community engagement needs to be held, especially in the neighborhoods.” 

The Detroit Regional Chamber of Commerce declined to comment on the ordinance. Catia Sabak, a spokeswoman for the chamber, said in an email that the chamber hasn’t received any input from member businesses in the restaurant industry “and are still evaluating the potential impact.” 

Markowicz sent a June 30 letter to the City Council asking for additional public meetings at a time when restauranterus can attend. She said the public meetings that have taken place were not well attended and business owners deserve more opportunity to provide input. 

Benson said his office will attend a yet-to-be-scheduled stakeholders meeting hosted by the Metro Detroit Black Business Alliance and continue gathering feedback during the council’s recess. 

“We’ve been reaching out and working on this for such a long time, as well as numerous news articles, and it (was) held in committee for months to make sure that we got feedback from as many people as we could,” Benson said. “When people will reach out and say, ‘well, we weren’t aware’ at a certain point, I’m hoping people are engaged also.”

Restaurant industry stakeholders who spoke with BridgeDetroit all said the city must do a better job of communicating. 

“The standards are not high enough in terms of that engagement,” Tharp said. “It’s easy to throw a few things up on the internet and say you did the engagement. It’s not fair to anyone to not go through that process. You don’t end up with a good piece of legislation.”

To report concerns over food at a restaurant, grocery store, or other food establishment in the City of Detroit, call (313) 876-0135, complete an online complaint form or email FoodSafetyDHD@detroitmi.gov.