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Why some businesses may be closing before the end of the year

"It's been a really tough road for a lot of restaurants."

GRAND RAPIDS, Mich — This week, two more restaurants announced they have closed their doors in Grand Rapids: Osteria Rossa in downtown, and Taqueria San Jose on the Southeast side. It is unclear as to the exact reasons for those closures. However, Richard App, the retail, retention, and attraction specialist for the City of Grand Rapids, said there may be a simple reason many businesses will close before the end of the year. 

Taxes.

"I think if you have a good accountant, they're going to tell you to close at the end of the year rather than going to January," said App, "If you are open January 1, you are still liable for personal property tax and a few other things."

App said many businesses, restaurants in particular, are also impacted by staffing challenges. 

"Unfortunately, I spent yesterday talking to six different restaurants," said App, "I mean, that was just in one afternoon. Restaurants that are either closed or at limited capacity, because they don't have the staff."

RELATED: Osteria Rossa closing for good in downtown Grand Rapids

However, to put it in perspective, he also said there was good and bad in 2021. He said about 20 businesses have actually opened in downtown this year, far more than have closed. 

"The positive thing that I will say for this holiday season," said App, "is that I've spoken with a lot of different retailers. And retailers did exponentially better this year than they did last year. And in many cases, even the year prior to that. So, people are shopping in our store."

He encouraged people to continue supporting local businesses. 

Meanwhile, one restaurant group is not planning to close in 2022. Rather, they are reopening a closed restaurant. Essence Restaurant Group's Grove will reopen in February, nearly two years after closing. 

"For our restaurant industry, it’ll be something exciting to talk about rather than something closing or not being able to open," said James Berg, the managing partner for Essence Restaurant Group.

Also, both Bistro Bella Vita and The Green Well will be closed the first week of January, plus a week in July. Full-time employees will given additional paid time off. 

RELATED: The B.O.B. closes for the week 'out of an abundance of caution'

"How can we attract more people in our industry?" Berg, "That was a challenge in 2019. Now, it's the number one issue."

To attract and retain employees, the restaurant group is also offering full medical benefits to full-time employees at a reduced cost, and flexible work schedules. 

Meanwhile, they are still adjusting restaurant open times this winter. However, with the Omicron variant continuing to spread, Berg said they will also have to "wait and see" and find out what spring will look like.

RELATED VIDEO: Minimum wage to increase Jan. 1 in Michigan, some say it is not enough

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