Detroit Struggles to Add Retail for Downtown Residents

[hkskyline]

Downtown Detroit retail lags despite rise in residents
5 May 2007



DETROIT (AP) - Downtown has nearly everything 30-year-olds Derek and Naomi Oglesby want -- access to great restaurants, entertainment, major sports teams and a short drive to work.

But like many downtown dwellers, they still have to venture outside the city to shop.

The Oglesbys' experience mirrors what market studies and city leaders already know: Downtown is ripe for retail development. But so far, no major companies or chains have moved in, despite an increase in downtown housing in recent years.

"I'm a mom, and for families the shopping isn't downtown. The shopping downtown is more for business and nightlife," says Naomi Oglesby, whose husband is an investment portfolio manager. "I'm used to the drive to the suburbs, but it would be heaven if there was no drive."

The Oglesbys bought a loft condo two years ago on the fringes of downtown. Their unit was among 2,400 developed in the downtown area since 2000.

In fact, high-end residential development in and near downtown Detroit is booming.

Major projects include the Riverfront Condominiums, the Westin Book-Cadillac and condos on the top 10 floors of the historic Vinton Building. Former Detroit Piston basketball great Dave Bing recently unveiled a new development of 80 units along the riverfront scheduled to open in two years.

A Brookings Institution market study indicates there will be demand for another 1,700 residential units through 2011, adding to the 6,500 people the Downtown Detroit Partnership says already live downtown.

But retail hasn't kept pace, says partnership President Ann Lang.

Studies done by the Brookings Institution and others suggest that 125,000 square feet of grocery space is needed to serve downtown residents, while 389,000 square feet is needed for shops that sell clothing, furniture, appliances, and building and garden equipment.

But finding adequate parking and available land for full-service groceries and stores would be difficult. Lang says it would be easier to find available land for smaller grocery outlets like a Whole Foods or a Trader Joe's.

So far, none has come calling, prompting members of the Detroit Economic Growth Corp. to call them.

"We have a whole list of grocery stores we are attempting to get," says Mary Grace Wilbert, an account manager on loan from DTE Energy to the Detroit Economic Growth Corp. "We do need a major or independent market downtown. We are trying to talk to stores like Whole Foods."

More than 80 companies have moved into the lower Woodward area south of Grand Circus Park since 2002 but they don't include grocers, Wilbert says.

Her organization has started a telemarketing campaign to sell grocers, clothing and other retailers on the merits of opening in downtown.

Detroit officials compare its efforts to what is working in cities such as Baltimore.

The Downtown Partnership of Baltimore reports that 38,000 people live downtown with demand for more than 7,000 new residential units.

Those residents have 2.1 million square feet of existing retail space to shop in with another 208,000 square feet under construction, said Nan Rohrer, retail development director for the Baltimore partnership. National retailers such as SuperFresh, Whole Foods and Filene's Basement already have opened in downtown Baltimore or are planning to do so.

Those are the kinds of stores that Nichole Ahmad, 27, would like to see in downtown Detroit. Ahmad and her husband, Rashad, moved from Pontiac to the Leland Lofts on Gratiot about two years ago.

She occasionally shops at a small neighborhood grocery several miles away near Wayne State University and a Farmer Jack farther east.

"But neither have everything that I need," she says. "I can't go there and get baby wipes, diapers, lotions and cleaning supplies. I hate to do it, but I have to go outside Detroit. I have to spend my money in Madison Heights, Taylor or Dearborn because they have the stores I need."

It's all part of the growing pains downtown Detroit is feeling as it moves to more of a mix of residences and businesses, says Jim Rogers, data center manager for the Southeast Michigan Council of Governments, a regional planning group.

Rogers says a full-service grocery store will be needed downtown when the population increases enough to support it. A hardware store and improved bus service also should be considered.

"There is more housing being developed all of the time downtown," he says. "You need services that people depend on, especially if you are talking about people who want to be able to walk around."

Before it closed for good in the early 1980s, the J.L. Hudson department store on Woodward Avenue was a major draw and it helped support other retailers such as Crowley's. Many smaller stores were forced to close as fewer people shopped downtown, heading instead to indoor, suburban malls.

The opening of three Detroit casinos, baseball's Comerica Park, football's Ford Field, and Compuware's world headquarters over the past decade all helped signal the current turnaround.

The entertainment venues have helped attract more than two dozen new restaurants and bars in and around downtown. And the city known for its hip hop, Motown, jazz and blues music has its share of popular night clubs.

J.C. Penney Co., which has plans to anchor an $80 million mall several miles north of downtown on Woodward Avenue, could become the first major department store in Detroit since the 1990s.

But major department stores or big box retailers may not be the answer for downtown, Rogers adds.

"People are willing to drive a pretty long distance for a big retailer," he says. "But the shoe shops, quick dinner places, the pizza shops, are all the things people want easy access to. All those things support neighborhoods."

David Di Rita of the Detroit-based Roxbury Group real estate development company says if opportunity is there, retailers will take advantage of it.

"The real question is: What is it going to take to bring retail to residents who love living downtown and want to shop down here?" Di Rita says. "The real answer is to bring more residents, and that's what we are doing."

[WANCH]

Downtown Detroit was one of the most depressing in the US especially during the late 20th century. Now it is slowly changing.

[hkskyline]

Detroit's downtown still has a lot of abandoned buildings, but things have changed a lot for the better. There is a fairly nice stretch of waterfront. GM's HQ is still downtown, albeit fairly alone when the other auto makers are in the suburbs.

More photos of Detroit on my website : http://www.globalphotos.org/detroit.htm

[zachus22]

Detroit's downtown is dead boring. I'd rather be across the border in Windsor on a Friday night. That's not to say I don't like its suburbs though.

[WANCH]

Originally Posted by zachus22

Detroit's downtown is dead boring. I'd rather be across the border in Windsor on a Friday night. That's not to say I don't like its suburbs though.

Ann Arbor which is a suburban town an hour away from Detroit has a more vibrant city and shopping centre.

[hkskyline]

Originally Posted by WANCH

Ann Arbor which is a suburban town an hour away from Detroit has a more vibrant city and shopping centre.

You don't even need to go that far out. The suburbs where the other car makers are based have their share of big box stores and are lively communities.

[mhays]

It's exciting to see Detroit going in the right direction, especially with residential growth Downtown.

At the same time, let's be realistic about what this means for retail. With a few thousand residents in the 1000 acres, there's not much demand outside business hours. When the number of residents is 10,000, or 20,000, or 30,000, then you can expect much more retail.

[tablemtn]

Downtown Detroit is doing the best it has done in years, if not decades.

But most Detroit neighborhoods are still in decline, and the city as a whole is declining and losing population.

With Michigan's economy, I would not expect much of a recovery, either.

[Xusein]

Just build a Wal-Mart downtown, and the problems are over.

[CrazyAboutCities]

Wow! I am surprised to hear that Detroit is attracting residents to live in downtown area. That is sign of Detroit is slowly recovering from the depression.

I think City of Detroit should learn the lessons from my city, Seattle. Little over a decade ago, downtown Seattle was almost dead. Nothing to do there... Very few residents... Fewer stores... Just bunch of office towers (filled tenants) One of these mayors (I am not sure which one) took the office and wanted to turn downtown Seattle into 24/7 center. He encouraged developers to built high density shopping malls (Westlake Center, Pacific Place, and City Center) and Nordstroms Flagship move in the abandoned department store. Also he encouraged developers to redevelop Belltown (once known as one of most dangerous area of downtown Seattle area) into yuppie neighborhood and one of most safest downtown neighborhoods across the nation. It included dozens of new apartment/condo/loft towers. Few years later, downtown Seattle became very vibrant and one of busiest shopping districts. Also it is becoming very crowded in downtown Seattle area. Soon it will get much better once new light rail and streetcars open to the public. Detroit can learn it from Seattle's successions. I hope Detroit will get much better within few years from now.

[mhays]

Originally Posted by CrazyAboutCities

I think City of Detroit should learn the lessons from my city, Seattle. Little over a decade ago, downtown Seattle was almost dead. Nothing to do there... Very few residents... Fewer stores... Just bunch of office towers (filled tenants) One of these mayors (I am not sure which one) took the office and wanted to turn downtown Seattle into 24/7 center. He encouraged developers to built high density shopping malls (Westlake Center, Pacific Place, and City Center) and Nordstroms Flagship move in the abandoned department store. Also he encouraged developers to redevelop Belltown (once known as one of most dangerous area of downtown Seattle area) into yuppie neighborhood and one of most safest downtown neighborhoods across the nation. It included dozens of new apartment/condo/loft towers. Few years later, downtown Seattle became very vibrant and one of busiest shopping districts. Also it is becoming very crowded in downtown Seattle area.

Not really. Even at our worst we had a better downtown than most mid-size US cities. And the revival has spanned several mayors and about 27 years by my count.

Downtown Seattle has always had more residents than the downtowns of most of our peer US cities. In our central 700 acres or so (Denny/I-5/Kingdome), we bottomed out at about 10,000 residents in the 80s. I think this is in the 25,000 to 30,000 range now, with much of the growth 15-20 years ago. First Hill and the near end of Capitol Hill, parts of greater Downtown, have always had large populations.

We also had decent retail even at our worst. We always had Nordstrom and Bon Marche, now renamed Macy's. Westlake Center opened around 1988 and City Center in 1989. We always had the Pike Place Market. Before Pacific Place we had a retail-heavy Rainier Square since 1977. The bottom was 1994-1998 -- Fredericks and I-Magnin closed in 1994, and the bigger Nordstrom and Pacific Place opened in 1998.

The first big modern non-office boom was in 1982, when our hotel room count doubled virtually overnight, and several high-end condos towers opened all at once. I think Charlie Royer (8 years) was mayor when Belltown's zoning was changed in 1985 to encourage residential use. This caused a major housing boom in the late 80s and early 90s. Mayors Norm Rice (8 years) and Paul Schell (4 years) were both advocates of downtown growth, like Nickels.

[intervention]

Originally Posted by CrazyAboutCities

Wow! I am surprised to hear that
I think City of Detroit should learn the lessons from my city, Seattle. Little over a decade ago, downtown Seattle was almost dead. Nothing to do there... Very few residents... Fewer stores... Just bunch of office towers (filled tenants) One of these mayors (I am not sure which one) took the office and wanted to turn downtown Seattle into 24/7 center. He encouraged developers to built high density shopping malls (Westlake Center, Pacific Place, and City Center) and Nordstroms Flagship move in the abandoned department store. Also he encouraged developers to redevelop Belltown (once known as one of most dangerous area of downtown Seattle area) into yuppie neighborhood and one of most safest downtown neighborhoods across the nation. It included dozens of new apartment/condo/loft towers. Few years later, downtown Seattle became very vibrant and one of busiest shopping districts. Also it is becoming very crowded in downtown Seattle area. Soon it will get much better once new light rail and streetcars open to the public. Detroit can learn it from Seattle's successions. I hope Detroit will get much better within few years from now.

Seattle has the wealth and developers that Detroit doesn't. I mean look at Union (or something to that effect), the developer bought out a huge acerage and is creating an exclusive high-income area. Its driving out the poor and frankly, that's not a good model for Detroit to follow.

[CrazyAboutCities]

Originally Posted by intervention

Seattle has the wealth and developers that Detroit doesn't. I mean look at Union (or something to that effect), the developer bought out a huge acerage and is creating an exclusive high-income area. Its driving out the poor and frankly, that's not a good model for Detroit to follow.

Well... Bring the wealth along mean bring jobs to town. Detriot will need gain its wealth for tax revenue, attracts retailers/restaurants to downtown area and create jobs for Detriot people.

[CrazyAboutCities]

Originally Posted by rotten777

Just build a Wal-Mart downtown, and the problems are over.

Hahaha! Wal-Mart won't make any better for downtown Detriot since Wal-Mart will drive every business in downtown Detroit out of business.

[ranny fash]

Detroit needs to take full advantage of that waterfront setting if it is to really succeed. there is so much potential there.

[Jaybird]

I don't think it's surprising that retail in downtown Detroit is struggling right now, but just give it time and it will boom. It's already done a lot over the past 5 or 6 years and will continue to do more once people keep continuing to move downtown. I tell what downtown needs, a GROCERY STORE!!! I think if Mike Ilitch (owner of the Tigers and Red Wings) gets his way, he will put one downtown, maybe. There's certainly a demand for one!

[isaidso]

It would be great to see downtown Detroit continue to reclaim it's central core. That urban hipsters are being drawn to this area is a good sign. It might take many years, maybe never, but I hope it happens. There is a good stock of beautiful old commercial buildings in the downtown.

Other parts of Detroit maybe more vibrant, but none offer the vast potential that downtown Detroit can offer. There is no reason that Detroit's central core could not resemble a scaled down version of Toronto's in 20-30 years time.

[samsonyuen]

If I were a grocerer, I wouldn't hesitate to go downtown. I mean, a retailer might have more risks, but anyone who lives downtown needs groceries.

[Backstrom]

Originally Posted by samsonyuen

If I were a grocerer, I wouldn't hesitate to go downtown. I mean, a retailer might have more risks, but anyone who lives downtown needs groceries.

But do you really think that grocery is the type of retail that Detroit is looking for?

[tablemtn]

There is no reason that Detroit's central core could not resemble a scaled down version of Toronto's in 20-30 years time.

Well, aside from Michigan's crap economy and population loss...