PRINT THIS STORY:

CHANGE TEXT SIZE:

RETAIL HELPS REVIVE DETROIT

BY STEVE McLINDEN

The roaring ’20s in downtown Detroit. City officials are looking to get that roar back.

Motown is singing a revival tune.

Downtown Detroit, beset with wholesale corporate move-outs and a population exodus over the past 25 years, is springing to life again. Written off as retail-dead after its last department store, J.L. Hudson’s, was boarded up more than 20 years ago, the city’s central business district is finally discovering New Urbanism — and just in time for the 2006 Super Bowl.

A new mixed-use plan for the downtown, featuring retail, restaurants and housing, has been devised for taking on urban blight. In late 2003 Hard Rock Café and a scaled-down Borders Books & Music helped amplify a growing buzz downtown when they opened side by side at street level in Compuware Corp.’s new headquarters on historic Woodward Avenue.

Soon to join them in the neighborhood will be Merchants Row, a $30 million retail-loft project that will lend a “SoHo-like” feel to the shops and residences planned for the 1200-1400 block of Woodward, says Cindy L. Ciura, SCMD, a spokeswoman for locally based Schostak Bros. & Co., the project’s developer.

“Detroit is now on the radar screen for retailers and restaurants again,” said Ciura. “Both Borders and Hard Rock are doing extraordinarily well. People are coming back to downtown from the suburbs … There is a new synergy here.”

Merchants Row is to span five circa-1900 buildings that will accommodate 40,000 square feet of retail, 157 lofts and a 264-space parking garage. “We don’t want to put typical national retailers there like you’d find at the mall,” said Ciura. “We’ve talked to a jazz-club concept, gourmet markets and urban retailers who would really complement the lofts.”

Local restaurateur Frank Taylor recently leased about 4,000 square feet in the development to The Breakfast Club, an eatery that will cater to Compuware employees from across the street.

“We are definitely on a roll in downtown Detroit,” said George Jackson, president of the private, nonprofit Detroit Economic Growth Corp. “Things are finally getting past the dream phase and moving forward to reality.”

The downtown district now has a total of 550 residential units under construction, and planners expect to get an additional 500 in the pipeline within the next two years, Jackson says. The midtown is going through a residential and restaurant transformation too, he adds.

Adding further impetus to the downtown resurgence are a pair of new ballparks: Comerica Park, home of baseball’s Detroit Tigers, and the Detroit Lions’ Ford Field, which will play host to Super Bowl XL in about 20 months. Greektown Casino, which opened more than three years ago, has also added zest to its namesake Greektown restaurant-retail enclave downtown.

Meanwhile, the city plans to transform a seedy industrial section that runs along the riverfront between the Belle Isle and Ambassador bridges. Planners want to create a promenade and a complex of parks, residences and shops there over the next five years. Also on the riverfront, the mixed-use Renaissance Center is undergoing a $500 million makeover by its owner-anchor, General Motors Corp. Several restaurants are making their debut there, including Asian Dynasty, Cinema Grill, Coach Insignia and Seldom Blues. They join recent retail additions Pangborn Design Collection, Jos. A. Bank and Petite Sophisticates.

“I’ve been working downtown for 16 years, and there is a new energy occurring we haven’t seen in that entire time,” said John Carroll, senior vice president of business development for the Detroit Regional Chamber of Commerce. “Restaurants are popping up all over the place.”

Among the eateries that have opened in the CBD over the past year or so are Downtown Bookies, Jacoby’s Grill, Maverick’s and Small Plates.

Business is good, said Tara Hippensteel, sales manager of the Hard Rock. The clientele is “an even mix of business people in the community and visitors. There is a lot of commerce downtown.”

Merchants Row, a $30 million block of shops and loft apartments, will bring a “SoHo-like” ambience to the downtown, says Schostak Bros., the project’s developer.

Aside from addressing its longer-term redevelopment needs, the Motor City is unabashedly trying to put on its best face for the 2006 Super Bowl. “The Super Bowl is not our only motivator, but we’re certainly using it as a catalyst,” said Jackson. “We won’t have the entire town transformed by then, but it will be obvious that we are well into the process.”

City development incentives include gap financing (an interim, or “bridge,” loan covering the time between the due date of the construction loan and permanent financing), which can be used to convert office buildings into market-rate residential units, and a matching fund that offers owners up to $150,000 for facade improvements, Jackson says. The program’s goal is to fund 80 buildings, he said. So far, the owners of more than 40 have applied.

Not everything has gone smoothly, however. Last year the City Council voted down an effort to establish a downtown business improvement district that would have funded and managed services and infrastructure improvements in the downtown, because some business owners had complained that they wouldn’t benefit. And there is one downside to all the improvement: Because of the downtown’s resurgence, some owners of the empty buildings being eyed for redevelopment “now want astronomical rates,” said Jackson. “They feel their building is a lottery ticket.”

But municipal officials are encouraged by a renewed corporate interest in their city. The relocation of tech firm Compuware with its 4,100 workers from Farmington Hills, Mich., to a new, $350 million downtown campus last year provided a big jump start for development, they say. Compuware is the main cog of Campus Martius, a five-block, themed, mixed-use and park development named after the central parks of ancient Rome.

“The buy-in from Compuware was important,” said Kurt Metzger, research director at Wayne State University’s Center for Urban Studies. “It put a lot of people downtown. And General Motors’ purchase of Renaissance Center from Ford was also significant.”

General Motors is also beefing up the downtown work force by moving its OnStar Corp. subsidiary into Renaissance Center, a relocation of about 900 workers from the Detroit suburb of Troy. This, with EDS Corp.’s move of 1,500 workers to Renaissance Center last year, brings the number of tech companies downtown to three.

“The components are coming into place here,” said Metzger. “I am leaning toward the optimistic side that this will all work. We have watched cities all across the country revitalize their downtowns. You just wonder why it has taken so long here. Detroit has come late to the ballgame in terms of redevelopment.”

The downtown-retail version of the chicken-or-egg question over whether residential density or shops come first in regenerating a CBD elicits varied opinions.

“For the most part, the immediate downtown area is still largely unpopulated after 5 p.m., and most people get into their cars and drive home,” said Phillip Cody of The Cody Co., a retail consulting and brokerage firm in Farmington Hills. “What downtown Detroit really needs to expand retail is to bring in more new residential.”

That’s easier said than done, opines David Welch, a journalist who covers the auto industry. “It’s going to be tough to lure people back downtown,” he says, because the metro area has been decentralized so long. “The suburbs are heavily populated with white-collar people who patronize their own small downtowns and restaurants. And they have modern, big malls to go to. While Detroit has had a little success with the new ballparks and casinos and some restaurant activity, it’s not like the renaissance they had in Pittsburgh, where there are now a lot of people living near downtown and where you can actually go shopping.”

The lack of enough convention space is also a problem. The city’s prime convention site, Cobo Hall, which hosts the annual North American International Auto Show, needs more space to accommodate the growing expo, says Cody. “While automakers are pushing for an expansion, the city isn’t in a position to take on building a new convention center. And a healthy convention trade is vital in keeping people downtown.”

There is also a shortage of quality hotels downtown, Cody and others say, though a 198-room Hilton Garden Inn opened in the Harmonie Park district downtown in March. This is the first new hotel to be built downtown since the Atheneum opened in Greektown in 1993. One thing that may be discouraging more from coming is the average hotel occupancy rate downtown, which is just over 50 percent, according to Ann Arbor, Mich.-based Hospitality Advisors.

And though officials are glad to see more companies attracted to the downtown, they note that there is still a long way to go. There are about 60,000 jobs in central Detroit today, compared with 150,000 in 1970, says Cody. “I am a big booster for the city, but Detroit still has to deal with enormous obstacles and issues, including a crumbling infrastructure and the question of how the city is going to rebuild its population and employment opportunities,” he said.

Detroit doesn’t have the population of the suburbs, says Schostak’s Ciura, but “you do have a high influx coming into downtown. And Oakland County, which is the third-wealthiest county in the nation among those with a population of more than a million, is just a hop, skip and a jump from downtown. There is a tremendous amount of wealth in Detroit.”

The city’s well-known downtown theater district has remained well patronized, even after the CBD went into a tailspin year ago. It remains home to the Gem Theater, the Fisher Theater, the Fox Theatre, the State Theatre, the Second City Comedy Theatre and the newly restored Detroit Opera House. Joe Louis Arena, home of the Detroit Red Wings, also continues to pack them in.

But how successful will the essential residential component be in the downtown retail equation?

“The very first day we put signs out for the lofts at Merchant’s Row, we got 70 calls,” said Ciura. “A lot of people want to be in downtown Detroit.”

© 2008 ICSC. All rights reserved. | Terms and Conditions | Privacy Policy | Contact ICSC | ICSC Home |