Economic Opus: Interlochen’s Ripple Effect On Northern Michigan’s Economy

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You’re likely familiar with Interlochen Center for the Arts’ summer camp, live concerts, and alumni list that includes more than its fair share of superstars. But what sort of impact does the world-renowned arts organization have on the broader northern Michigan economy?  An internal Interlochen study from 2017 noted that $8.9 million was paid to vendors in the Grand Traverse region in a single year alone, and that in a five-year period, Interlochen spent a total of $13.3 million on construction projects, with local businesses as the primary beneficiaries. Some 700 local purveyors sell to Interlochen each year, including the likes of Tom’s Food Market, Grand Traverse Pie Company, and D&W Mechanical. But its reach extends even beyond just those companies into the greater community.

It all starts with the students: According to Simone Silverbush, director of media relations and communications, Interlochen Arts Academy had 503 boarding students enrolled during the 2020-21 school year, along with 42 day students. All told, 18 countries and territories were represented among the academy student body. The Interlochen Arts Camp, meanwhile, welcomes approximately 2,800 campers for three- to six-week programs each summer. 

With so many Interlochen students and campers arriving from all parts of the world, one of the biggest economic impacts happens via air travel. According to Cherry Capital Airport Director Kevin Klein, Interlochen-associated fliers are one of its biggest traveler populations. In fact, Interlochen has an entire student travel office dedicated to working “with students, parents, airlines, and the institution in coordinating student travel to and from Interlochen’s campus.”

Joe McCarthy, Interlochen’s director of campus safety and transportation, estimates that in a normal year, the academy and the arts camp collectively account for between 2,000 and 3,000 student flights. 

On the academy side, McCarthy says Interlochen would typically “anticipate student flights to be in excess of 1,200 during the school year.” According to McCarthy, the academy in a typical year has around 250 seniors, many of whom fly all over the country for college auditions in January and February. Auditions largely went virtual this year, which meant less travel for students.

The arts camp, meanwhile, will likely see about 800 flights total this season, between beginning-of-season arrivals, end-of-season departures, and mid-season changeovers (the mid-July period when one three-week camp session ends and another begins). In an average summer, the number of people arriving and departing by plane is even higher.

Students and campers aren’t all that has to get to and from Interlochen’s campus. Luggage, furniture, musical instruments, and artwork regularly travel in and out as well. Taking responsibility for those assets is The Packaging Store, located on Barlow Street in Traverse City.

According to Robert Petersen, who operates the business, The Packaging Store’s earliest dealings with Interlochen date back to “the late ‘80s or early ‘90s,” when the franchise first landed a contract to handle shipping needs for the academy and the arts camp. That contract lasted until 2012, when Petersen says Interlochen “took everything in-house and stopped using any outside company for shipping.” But when Interlochen sold its bookstore to a new corporate owner in 2019, The Packaging Store got the contract back.

The Interlochen contract makes for a few extremely busy times each year.

“It’s a lot of volume in a short period of time,” he explains. “For us, it turns into a busy couple of weeks at the end of May or the beginning of June (when academy students are moving out). And then for summer camp, when that closes up and all the campers head home, same thing.”

Over the years, the Interlochen relationship has meant that Petersen and his team grew accustomed to packaging and shipping large or unusually shaped items – cellos, tubas, and large “multi-dimensional sculptures,” to name a few. 

That relationship has also meant a considerable amount of revenue. Petersen estimates that, in the early days, before Interlochen took everything in-house, the contract accounted for up to 20 percent of his store’s annual gross receipts. Thanks to the pandemic, things at Interlochen haven’t been totally normal more or less since The Packaging Store won that contract back – and the store “has grown a heck of a lot” since 2012 as well – so Petersen isn’t sure how much of his revenue will end up coming from Interlochen now. Yet even with a bigger store and a more diversified revenue stream, he estimates the academy and the arts camp will still represent 10-12 percent.

Interlochen also has a clear impact on the region’s hospitality and tourism sectors. After last year’s virtual pivot for both the academy and the arts camp, Interlochen adopted a closed campus policy for this year. Since then, no performances have been open to the public, and parents and families have been significantly restricted in their ability to visit the campus or explore it during drop-off and pick-up times.

Restaurants and hotels alike have felt the blow of these changes.

“We’re doing about a third of what we would normally do in a summer season,” says Brian McAllister, who owns Hofbrau Steak House & American Grille less than two miles north of Interlochen Center for the Arts.

In an average year, Hofbrau draws big crowds of concertgoers, Interlochen Arts Camp staffers, and families. All of that business disappeared last summer; most of it has yet to come back.

“With it being a closed campus, and at partial capacity, you don’t get as many counselors or staff coming in after 9pm,” McAllister notes. “You don’t get parents or grandparents coming to see the performances of their kids. You don’t get the concert traffic. So it’s kind of like taking the Cherry Festival away from downtown Traverse City and saying, ‘Good luck.’ It’s just a lot of people that you can’t replace.”

Tammy Bialik – who co-owns the nearby Interlochen Motel – echoes McAllister’s statements.

As the closest option for hotel or motel lodging near Interlochen’s campus, the 14-room Interlochen Motel regularly hits no vacancy mode around key academy or arts camp calendar dates.

For Bialik, it became evident early on in the pandemic just how significantly a disruption to the Interlochen calendar could affect her business. From graduation to the Interlochen Arts Festival summer concerts, the motel went “from completely booked to nothing” for multiple dates across the spring and summer of 2020.

The bright spot? With Interlochen restarting its concert series in August, Bialik is already seeing a ramp-up in business at the motel.

“We’re already full for all of those concerts,” she says. “August 3 for Chicago, August 10 for Harry Connick, Jr. Those are Tuesdays and we’re full.”

She credits Interlochen’s unique community as an attraction for larger groups of visitors when Interlochen “opens back up fully.”

“There’s nothing like Interlochen for our area,” she said. “We still have the weddings, we still have our fishermen that we love, we have groups of motorcycles coming through to do their drives on 22. But we love our Interlochen parents. We kind of follow their journey over time, because they drop off their kids every year, and we get to know them.”

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