Should we even try downtown retail?

[Wesley Mouch]

That's zoning, bud, not some unimpeachable fiat from The Almighty.

You have your Chicago parkingplex, and I can show you a building in DC containing a Target, Best Buy, Bed Bath & Beyond, a gym, and several smaller businesses, where the free underground parking garage is *always* less than half-full.

It all comes down to what kind of city you want to have. If you want automotive sewers filled with warehouse-sized junk shops and acres of beautiful asphalt, you can have that. If you want something that your grandparents would recognize as a city, you can have that too. But it all starts with knowing the desired outcome.

GP's right here. I've been to the KMart [[closed now?) by NYU, and there's zero parking. Retailers will find a way to retail if there's a population with cash. You never have to worry about attracting retail.

To get retail its a simple formula. Do these things better than neighboring areas 1) Get population. 2) Keep taxes in line. 3) Reduce unnecessary regulation and bureaucracy 4) Allow innovative use of real estate.

As to item 3) someone commented that a friend opened a restaurant here -- and that it was no worse than NYC or LA. That may be true -- but NYC at least is working very hard to removed burdens to businesses. For example, they are striving to reduce the time to get a liquor license. Used to take a year or more. They want to get that down to a month or two. Even a place with little competition knows that they need to be better. Detroit has competition and needs to be much, much better at being business friendly.

[professorscott]

To get retail its a simple formula. Do these things better than neighboring areas 1) Get population. 2) Keep taxes in line. 3) Reduce unnecessary regulation and bureaucracy 4) Allow innovative use of real estate... Detroit has competition and needs to be much, much better at being business friendly.

Spot on.

One-off retailers open stores where they do for a million different reasons which are hard to track. Multiple-unit operators are more predictable and they look for certain combinations, which differ from chain to chain, but usually always include these things:

1. How many people live nearby who are likely shoppers?
2. What is the transportation like [[that is, can people get to my store)?
3. What is it going to cost me, in time, money and aggravation, to deal with the municipalities involved in order to open a store?
4. What are my location-dependent operating costs? This gets into such things as weather [[stores in south Florida do not pay for snow removal), the necessity to provide off-street parking [[stores near subways stations often do not incur this cost), insurance [[based on age of building, crime, etc.) and so on.

Detroit, parts of it, do pretty well on #1, middling on #2, and not so well on the others. Fixing #3 would be a big step in the right direction but #4 is going to be a problem for quite a while, I'm afraid. That it is so easy to get away with property crime is a big part of the problem and not easily solved.

[greekt0wn]

All of the new retail downtown are smoke and mirrors. Not a chance any of those shops are making money, they're being propped up by Gilbert, et al. to give the appearance downtown is lively to potential investors and residents. More or less, "Fake it til you make it"

[Hermod]

Spot on.

1. How many people live nearby who are likely shoppers?

professor, it is also what type of people [[do I open a German sausage shop in a Jamaican neighborhood), what is the age distribution [[if I am in senior city, do I open a head shop), what is the income distribution [[good, skewed, too many poor, too many rich).

[Bham1982]

That's zoning, bud, not some unimpeachable fiat from The Almighty.

It's neither. It's market demand. Excepting NYC, the market demands cheap, easy parking.

You have your Chicago parkingplex, and I can show you a building in DC containing a Target, Best Buy, Bed Bath & Beyond, a gym, and several smaller businesses, where the free underground parking garage is *always* less than half-full.

That's great, but the key is "free parking". Lots and lots of free parking, even in the heart of DC. It would never have been built without the free parking.

[Bham1982]

GP's right here. I've been to the KMart [[closed now?) by NYU, and there's zero parking. Retailers will find a way to retail if there's a population with cash. You never have to worry about attracting retail.

I noted that NYC is the one [[very big) exception. Obviously there will never be parking spaces for retail in the middle of Manhattan, and also generally no parking [[or very limited) in retail hubs in the Outer Boroughs.

NYC is a huge outlier in the U.S., and should never be used as a guidepost for land use decisions in other U.S. Cities. It's just different, starting with the fact that most people don't even own a vehicle.

And it has nothing to do with cash. NYC has big box retail in poor areas too, also with no parking. It's the one market where the retailers and banks don't demand parking.

[stasu1213]

I noted that NYC is the one [[very
big) exception. Obviously there will never be parking spaces for retail in the middle of Manhattan, and also generally no parking [[or very limited) in retail hubs in the Outer Boroughs.

NYC is a huge outlier in the U.S., and should never be used as a guidepost for land use decisions in other U.S. Cities. It's just different, starting with the fact that most people don't even own a vehicle.

And it has nothing to do with cash. NYC has big box retail in poor areas too, also with no parking. It's the one market where the retailers and banks don't demand parking.

Remember when Detroit didnt have as much parking downtown but had a good bus system? Shoppers caught busses downtown to shop at the big box stores of that time. Sears, Montgomery Wards, Kmart, etc were in areas outside of the downtown areas that had big parking lots where shoppers driven to

[stasu1213]

R
emember when Detroit didnt have as much parking downtown but had a good bus system? Shoppers caught busses downtown to shop at the big box stores of that time. Sears, Montgomery Wards, Kmart, etc were in areas outside of the downtown areas that had big parking lots where shoppers driven to

Find out what is Brooklyns secret of having a box store in its poor neighborhood and test it in Detroit. Walmart had even provide shuttle service to some of Detroits neighborhoods to bring shoppers to their stores

[DetroitPlanner]

That's zoning, bud, not some unimpeachable fiat from The Almighty.

Zoning is always subject to change. For example, Detroit needs to figure out what to do with all of its empty industrial areas. You think that many manufacturing jobs are coming back?

[stasu1213]

All
of the new retail downtown are smoke and mirrors. Not a chance any of those shops are making money, they're being propped up by Gilbert, et al. to give the appearance downtown is lively to potential investors and residents. More or less, "Fake it til you make it"

What new retail had Gilbert opened downtown? He is responsible for moving businesses from the suburbs into his renovated buildings. Maybe MooseJaw and the Roasting Plant. I give him credit for concertrating on getting stores downtown and will be sucessful in doing it

[stasu1213]

There's a Meijer in Detroit, and various Meijers, Walmarts, Targets and the like already ring Detroit on all sides. There is no where in Detroit where you aren't a few minutes from a superstore with all kinds of crap for sale.

Again, if you think there's no competition for linens, then open up a store, and you'll be a rich man.

Bham. Think of those who dont own cars and dont want to depend on their cars as much due to high gas prices. Those people want a place close buy where they could shop

[greekt0wn]

What new retail had Gilbert opened downtown? He is responsible for moving businesses from the suburbs into his renovated buildings. Maybe MooseJaw and the Roasting Plant. I give him credit for concertrating on getting stores downtown and will be sucessful in doing it

"et al." = various others with interests dtown. I don't know the specifics of Mr. Gilbert's or the other parties involved finances but I know BS when I see it

[DetroitPlanner]

Bham. Think of those who dont own cars and dont want to depend on their cars as much due to high gas prices. Those people want a place close buy where they could shop

It is close enough to walk to for many. Just not you. Look at how folks from Ferndale and Hazel Park now have a reason to spend money in their neighborhood, but also in Detroit. I am amazed by people who complain that the city does not have this or that, but when it happens then they find something else to bitch about 'yeah but it is not close to me!' If you're downtown you are close to Eastern Market, Whole Foods, Ye Old Butchers, University foods, the new place on campus martius, plus many more. Don't be a spoiled-sport. The Meijers is a good thing, as will be the Meijer in Old Redford.

[MikeyinBrooklyn]

People shop differently in Manhattan. The Astor Place KMart and KMart at Penn Station [[the only big box discount department stores in Manhattan) cater almost exclusively to people who buy what they can easily carry. People aren't filling their trunk and driving home. In Brooklyn, where I lived for so long, there are a couple of Targets and a Costco, where some people do drive, but still not mostly. NYC shopping does not actually compare in any way with reality in the rest of the world.

Neighborhood retail [[small grocers, dry cleaners, etc) can get by without a lot of parking in a denser area. No big box or supermarket possibly could. That's why "big box" won't work downtown. Maybe in midtown, with easy access to Wayne State and the Medical Center. I think the Brewster-Douglass site might also be a spot where a big box anchored plaza with other smaller retailers could work. But I don't think big box would get closer to downtown than that.

[Hermod]

Bham. Think of those who dont own cars and dont want to depend on their cars as much due to high gas prices. Those people want a place close buy where they could shop

ECON 101: A "want" is not the same as an economic "demand".

[ghettopalmetto]

Any discussion of retail in downtown Detroit seems to vacillate between a few different issues. Two of these are:

1. National retailers [[Big Box) vs. Independent boutiques
2. In the case of national retailers, Suburban-Style Big Box vs. Urban Form.

Let's put the first one aside for a moment, and focus on the second argument. Some folks argue that New York [[for some reason that's not clear) is the only city on God's Green Earth that does not need acres and acres of cheap, abundant parking. This is attributed to some inexplicable, apparently psychological phenomenon that New York is just "different" than anywhere else.

Well, I like numbers. Given that recent major retail developments in Detroit have involved suburban-style stores [[K-Mart, Home Depot, State Fairgrounds), let's see how this pans out in real life. The below comes from a recent piece on salon.com. Tell me if any of it sounds familiar.

...a typical midsize American city, which is to say that its downtown was virtually abandoned in the second half of the twentieth century. Dozens of elegant old structures were boarded up or encased in aluminum siding as highways and liberal development policies sucked people and commercial life into dispersal.

Some city officials saw such little value in downtown land that they planned to plunk down a prison right in the middle of a terrain that was perfect for mixed-use redevelopment.

On the one side is a downtown building his firm rescued—a six-story steel-framed 1923 classic once owned by JCPenney and converted into shops, offices, and condos. On the other side is a Walmart on the edge of town. The old Penney’s building sits on less than a quarter of an acre, while the Walmart and its parking lots occupy thirty-four acres. Adding up the property and sales tax paid on each piece of land, Minicozzi found that the Walmart contributed only $50,800 to the city in retail and property taxes for each acre it used, but the JCPenney building contributed a whopping $330,000 per acre in property tax alone.

When [[the developer) looked at job density, the difference was even more vivid: the small businesses that occupied the old Penney’s building employed fourteen people, which doesn’t seem like many until you realize that this is actually seventy-four jobs per acre, compared with the fewer than six jobs per acre created on a sprawling Walmart site.

Even low-rise, mixed-use buildings of two or three stories—the kind you see on an old-style, small-town main street—bring in ten times the revenue per acre as that of an average big-box development. What’s stunning is that, thanks to the relationship between energy and distance, large-footprint sprawl development patterns can actually cost cities more to service than they give back in taxes.

http://www.salon.com/2013/11/10/walm...on_our_cities/

[Bham1982]

Some folks argue that New York [[for some reason that's not clear) is the only city on God's Green Earth that does not need acres and acres of cheap, abundant parking. This is attributed to some inexplicable, apparently psychological phenomenon that New York is just "different" than anywhere else.

No, no one made such an argument.

I specifically said NYC is the only city in the U.S. where big box does not require parking. I never spoke about other countries.

And I gave very specific reasons about why this is the case. It's because retailers demand free parking as a precondition for signing leases, and it's because banks demand free parking as a precondition for lending money for construction of retail centers.

I also gave a specific reason why NYC is the exception. NYC is the only city where a majority of consumers don't own vehicles. In all other cities, even places like SF, DC, Boston, etc, the overwhelming majority of consumers do own vehicles.

Perhaps to you this is irrelevent, but to retailers and lenders, there's an enormous difference between a market where 80% of households own vehicles and one where 40% of households own vehicles, especially when in NYC the vehicle-free cohort is actually strongest in the wealthiest zip codes of the city [[which is generally not the case in other transit-rich U.S. cities).

Now if you think that retailers and the lending community are behaving in an irrational manner, that's your perogitive. You can go right ahead and build your own big box retail with no parking, and make a killing.

[ghettopalmetto]

Perhaps to you this is irrelevent, but to retailers and lenders, there's an enormous difference between a market where 80% of households own vehicles and one where 40% of households own vehicles, especially when in NYC the vehicle-free cohort is actually strongest in the wealthiest zip codes of the city [[which is generally not the case in other transit-rich U.S. cities).

Now if you think that retailers and the lending community are behaving in an irrational manner, that's your perogitive. You can go right ahead and build your own big box retail with no parking, and make a killing.

Based on your previous posts, I presume you work in some sort of real-estate related field. I completely understand what you're writing.

My natural question is, WHY DO YOU APPLY A WHOLLY DIFFERENT STANDARD TO A CITY WHERE 35% OF RESIDENTS HAVE NO ACCESS TO A VEHICLE, LET ALONE OWN ONE?

Yes, you and the banks and the retailers are behaving perfectly irrationally, insisting on a city built strictly for cars when such a low percentage of the population uses them.

There's a TON of on-site parking where Hudson's used to be. If parking is the major determining factor of retail development, then where are the stores on that site, Chief?

I don't expect you to have answers. You have a history of believing whatever the hell it is you believe, facts be damned. And even when I present an article demonstrating that suburban Big Box development is far less beneficial to a city than traditional, walkable development, you don't even bother to read it.

Idealogue-on with yourself.

[erikd]

Let's face it. Detroit need more retail. Not novelty; just retail that cater to the general consumer. It hope that retail will open at the same time that the rail system is being constructed. Not open when the thing is completed. That will take a long time to wait

They don't want to open up the retail storefronts while Woodward is all torn up for construction. It's a much better idea to hold off until the street construction has been completed.

[douglasm]

I'm late to this party and have not read all of the thread, but it appears to be acting like all the other "downtown retail" threads that have come before it, and appears to suffer from the same problem, that is "What KIND of retail are you talking about"?

The way some people talk, you'd think they want to recapture the glory of the past. Forget it. That dream died 40+ years ago, and even cities with "thriving" urban cores are finding that the shopping districts are becoming more and more oriented towards residents than as a regional draw.

I'll grant you that you may find one of the new smaller urban Target stores or something like them will find downtown attractive, but in order for downtown retail to work, it's going to be important to figure out what your target audience is, and that's probably office workers and downtown residents. Once you establish what crowd will be drawn, the easier to figure out what kinds of shops and services are needed and have a chance to survive.

[DetroitPlanner]

My natural question is, WHY DO YOU APPLY A WHOLLY DIFFERENT STANDARD TO A CITY WHERE 35% OF RESIDENTS HAVE NO ACCESS TO A VEHICLE, LET ALONE OWN ONE?

If this is true, then 65 percent do have access to vehicles. Lets subtract out the number of people who are too young or too old to drive that live in the City. The numbers for houses with cars suddenly look pretty good. In addition, the people who have cars most likely have more disposable income.

I don't see a lot of people on the bus or waiting for one on Gratiot carrying TV's from Costco. If you don't have a car and want to make a big purchase, you are going to coordinate your trip with a family member or friend who has one. The nature of retail has changed. It is no longer 1940, M-1 will only go up to New Center.

Regarding the parking at Hudson's. Yes there is parking there. Is there a lot? Well not after you subtract out the thousands of workers who carpool and park there every day. While the spots are there, the capacity is already full so assuming that the parking will be used by shoppers is foolish when the stores open at 9-10, but the office workers get there before 8. Staples bought Silvers and moved it to the eastern edge of Downtown for a reason: Parking.

What is the CBD's best market? Those who are there already. Office workers and residents need to be able to keep these places going and that is the market you should be chasing.

What many fail to realize is Downtown Detroit's retail market is fairly healthy when you compare it to most large cities in the United States. New York and Chicago are definitely not a normal retail environment. See Toledo, Cleveland, Columbus, Indy, Buffalo, and Pittsburgh and you will find the only one with a more healthy retail environment is Pittsburgh, but it is only marginally more healthy. MPS has a decent amount of retail downtown, but remember these folks are stir crazy and locked in a habitrail for 9 months a year. Heck Detroit's CBD is even more healthier than places like Royal Oak, Birmingham, Plymouth, or Wyandotte when you adjust for the food court for drunk yuppies and hipsters factor.

Shopping patterns have changed drastically since 1940, everywhere. You cannot go backwards but change is inevitable. The big question is how do we improve what we have based upon current conditions? Having a big goal is great, but be willing to accept baby-steps to get you there.

[Bham1982]

My natural question is, WHY DO YOU APPLY A WHOLLY DIFFERENT STANDARD TO A CITY WHERE 35% OF RESIDENTS HAVE NO ACCESS TO A VEHICLE, LET ALONE OWN ONE?

I don't think 35% of Detroit households lack vehicles. At the least, that's not what the Census reports. The real reported number is considerably lower, I think.

But, let's assume 35%. Based on the experiences of other U.S. cities, we already know that isn't a high enough proportion to trigger the construction of transit-oriented big box.

But, more important, it isn't just the proportion of car-free households, but the characteristics of those car-free households. Put bluntly, are these households car-free due to choice, or because they're mostly very poor? I'm guessing there are very few "choice" car-free households in Metro Detroit.

[stasu1213]

I don't think 35% of Detroit households lack vehicles. At the least, that's not what the Census reports. The real reported number is considerably lower, I think.

But, let's assume 35%. Based on the experiences of other U.S. cities, we already know that isn't a high enough proportion to trigger the construction of transit-oriented big box.

But, more important, it isn't just the proportion of car-free households, but the characteristics of those car-free households. Put bluntly, are these households car-free due to choice, or because they're mostly very poor? I'm guessing there are very few "choice" car-free households in Metro Detroit.

The poor are not the only ones who live downtown, Lafayette Park, Midtown, Indian Village, The Gold Coast. Areas where its residents would not mind supporting a decent store not too far from their areas

[Ben]

Downtown Detroit has a retail environment that is definitely not healthy. Cleveland has Tower Place, a mall with national retailers. Indianapolis has Circle Centre, a mall with a Carson's and about 70 other shops. Pittsburgh has a flagship Macy's and a fairly large amount of retail for a downtown. I don't understand what retail you are talking about downtown.

[Ben]

Amen douglasm, I feel like some people act like we should build a mall downtown. As someone who was there 40+ years ago when retail died I can see how it is clear that destination retail can't function in downtown Detroit. I think a city Target would be fine though. The key is attracting stores that will succeed and not just have to be propped up by city subsidies.