Jolly Pumpkin preparing to join Ann Arbor's Main Street bar scene

The cafe will occupy the entire building, including the basement. The brewing operations, which Jeffries said will be about half the size of those at Grizzly Peak and Arbor Brewing Company, will be on the first floor.

The building is 4,200 square feet, not including the basement, according to city records, and is owned by the Patricia Wong Trust.

Restaurants have dominated Main Street and, to a lesser extent, Liberty and State streets, for many years. But longtime local eatery Zanzibar on State Street recently closed, and there is a movement toward smaller restaurants with lower overhead costs.

For example, broker Jim Chaconas of Colliers International reported that interest in leasing the entire 6,000-square-foot ground floor space at the Handicraft Building on Liberty and Division was light, but picked up when it was marketed as two 3,000-square-foot spaces. 

And Roger Hewitt of Zanzibar said the large size of the restaurant and resulting rent contributed to its demise.

"I think there's clearly a trend toward smaller rather than larger spaces," Hewitt said.

The poor economy has arguably played a role in the hard times facing some restaurants as well, but Jeffries said he was optimistic about opening, despite the economy. It received $1.1 million in tax credits over eight years from the Michigan Economic Growth Authority.

"There are still people out there working, spending money, maybe not spending lavishly, but they're going out to dinner with their friends," he said. "There's a real demand for comfort, and beer qualifies as comfort food to a lot of people."

The new eatery will offer vegetarian and vegan options, a niche Jeffries said is underserved in Ann Arbor, and new brands of beer will be brewed on-site as well.

Getting food from local farmers will also be a high priority.

"We're working on the menu right now," Jeffries said. "Everything we can source locally, we will."