More new signs of hope for downtown retail....

[douglasm]

I know downtown Seattle is vastly different than downtown Detroit, but the article below notes that the J.C. Penny's move back to downtown Seattle is driven by population more than traffic flow. Interesting concept.

http://seattletimes.nwsource.com/htm...upenney30.html


The S. H. Kress [[at one time a major 5 and dime chain) building is a 3 story, 65,000 sq. ft. retail building with at least 1 exsisting tenant that Penny's will work around. In comparison, the average Penny's mall store runs about 120,000 sq. ft.

I realise that in downtown Detroit, there has to be major evidence that there is a retail trade to be serviced, but with stores like Target, Penny's and Wal-Mart looking at smaller urban stores as a way to fuel growth, this is a positive sign for retail in an urban area.

[DetroitPlanner]

Penny's recently closed its oldest store in the Detroit area. It was on Fort Street in Lincoln Park. This store too has a small foot print and was in a very dense area where homes are on 35' lots and lots of traffic counts.

I wonder what is reversing this trend for Seattle? Do people hopped up on $5 coffees go crazt for Sophea cosmetics?

[Hypestyles]

we'll see, it will be interesting if Penney's decides to reinvest.. downtown detroit, would they settle for one floor, or at least two? I remember when they closed down at Northland, that space is still empty.. wonder what kind of store would be willing to open in there..

[iheartthed]

Penny's recently closed its oldest store in the Detroit area. It was on Fort Street in Lincoln Park. This store too has a small foot print and was in a very dense area where homes are on 35' lots and lots of traffic counts.

I wonder what is reversing this trend for Seattle? Do people hopped up on $5 coffees go crazt for Sophea cosmetics?

JC Penney just opened its first store in Manhattan about two years ago. It's been pretty successful... Probably saved Manhattan Mall.

[davewindsor]

I know downtown Seattle is vastly different than downtown Detroit, but the article below notes that the J.C. Penny's move back to downtown Seattle is driven by population more than traffic flow. Interesting concept.

http://seattletimes.nwsource.com/htm...upenney30.html


The S. H. Kress [[at one time a major 5 and dime chain) building is a 3 story, 65,000 sq. ft. retail building with at least 1 exsisting tenant that Penny's will work around. In comparison, the average Penny's mall store runs about 120,000 sq. ft.

I realise that in downtown Detroit, there has to be major evidence that there is a retail trade to be serviced, but with stores like Target, Penny's and Wal-Mart looking at smaller urban stores as a way to fuel growth, this is a positive sign for retail in an urban area.

I had to read everything twice and I still don't understand how development in Seattle can even faintly offer hope to downtown Detroit to get a big box store here like JC Penny. You acknowledge it's vastly different, so why bring it up? The first thing I noted about the article was the 96,000 sq. ft. Target store that is planning to open a block from this proposed 60,000 sq. ft JC Penny site. And just so we don't regurgitate the same arguments made here a week ago on http://www.detroityes.com/mb/showthr...-Detroit/page4, big box stores like Target go after sure bets and base their decisions on an algorithm with a large part of it as what is the median incomes of residents around the proposed site.

I pulled the data up again.

http://www.city-data.com/city/Detroit-Michigan.html

Detroit 2009

Median home and condo value
$67,000
Median household income
$27,098
Per capita income
$14,213

http://www.city-data.com/city/Seattle-Washington.html

Seattle 2009

Median house and condo value
$452,000
Median household income
$60,483
Per capita income
$40,743


I don't see any positive signs from Seattle because there's absolutely no comparison between the two cities. The difference is so clearly apples and oranges, night and day, black and white that I don't see how they can possibly relate. And let's not forget that Seattle is 68% white and 6.9% black. Why don't you start comparing cities in Oakland County that have JC Penny's and Targets to Detroit to offer more hope while you're at it ???

[Detroitnerd]

davewinsdor: Apples and oranges aside, where do you see any hope for new retail development anywhere whatsoever? I mean, it's pretty bleak across the board.

[douglasm]

A number of things are changing the retail dynamic in downtown Seattle. First, there was the repopulation boom in the last decade or so, with condo and adaptive re-use housing units popping up everywhere in the urban core, in the same way buildings are being rehabed in downtown Detroit as housing units.

Second, retail hadn't kept up. Seattle has a very active, but shrinking retail core that appars not designed to serve the urban resident. That trendy clothing store can't really sell you a pair of boxers. Combine that with the 50 year trend of moving to shopping centers in outlying areas, and that leaves you with an underserved urban population.

Third is probably one of the bigger impacts. Businesses rely on growth, and with shopping centers and strip malls blanketing the 'burbs, the outlying areas have probably seen as much growth as they're going to see. Large footprint stores like Target, Penny's and Wal-Mart are [[finally) looking for expansion opertunities outside of their "traditional" areas. This is the "new frontier" for retail.

[davewindsor]

Large footprint stores like Target, Penny's and Wal-Mart are [[finally) looking for expansion opertunities outside of their "traditional" areas. This is the "new frontier" for retail.

It's not a "new frontier". It's not a blanket expansion into urban centers. They are just punching in the data of areas with high average resident incomes within a certain radius and if the resident incomes meets their algorithm they open up. Doesn't matter if it's urban or suburban. Downtown Detroit had Hudson's and K-Mart [[Kresge's) which was the big box of the time. Historically, it's not a new idea. As the resident incomes declined in Detroit because those higher income residents moved to the suburbs, the residents in the city spent less and the big boxes either went under or packed up and followed the money to the suburbs.

Toronto has had consistenly high median incomes and have kept their big box retails. Walmart set up shop in Toronto decades ago, not recently. Big boxes opening up in urban centers is nothing new and it's not some kind of change in plan. The big boxes just follow the money using the median incomes of residents within a certain radius. If those median resident incomes significantly improve in downtown, they move there. It basically comes down to dollars and cents. As these median resident incomes increased in Seattle, they are moving to Seattle. The data shows the median resident incomes in Detroit aren't increasing anywhere near the level of Seattle so there's no hope for this city in terms of big box by comparing it to Seattle. Seattle has also seen an increase in their population while Detroit has seen drastic declines. Completely different cities.

[douglasm]

Davewindsor....
The problem with your numbers is that they are including the whole city, not just the downtown core. There was an earlier discussion about Target that was probably more on point when it came to downtown retail.

Lowell, in 2007, cited a study showing a downtown Detroit [[and ajacent area) population of about 75,000, with over a quarter of them having annual incomes between $100k and $250k, with 43% having incomes between $50 and $100k.

http://atdetroit.net/forum/messages/...tml?1187866312

I think it is an absolute falacy to use "old" downtowns as a model in the way that you did. Hudson's has been gone for years, as has Kresge, and other "traditional" downtown retailers. In general, downtowns are NOT the destination shopping districts that they used to be. And they won't be again.

But the impression I get is that some retailers are beginning to take notice that the landscape is changing, that downtowns as viable neighbourhoods are coming back, and that smaller footprint stores are best designed to serve these areas.

[detmsp]

It's not a "new frontier". It's not a blanket expansion into urban centers. They are just punching in the data of areas with high average resident incomes within a certain radius and if the resident incomes meets their algorithm they open up. Doesn't matter if it's urban or suburban.

This isn't true. It's a fundamentally different business model and something very new for these retailers.

[stasu1213]

Maybe J C Penney should test the waters in downtown Detroit. Do what Somerset Collection is recently doing. Open up in a space with items that are J C Penney's brand such as American Eagle and St Johns Bay. They could share a space with Macy's or Target. More people who work or live in the downtown area would shop at those store than they do the Somerset Collection. I am not putting down the Somerset Collection for I think that the idea is excellent. I feel that more people will actually spend there money at J C Penneys and Target instead of browsing. There is no place in the downtown area to even buy accesories for the bathroom nor kitchen. I thing a store such as Linens N More or Bed Bath and Beyond will do good business in downtown Detroit.

[davewindsor]

Davewindsor....
The problem with your numbers is that they are including the whole city, not just the downtown core. There was an earlier discussion about Target that was probably more on point when it came to downtown retail.

Lowell, in 2007, cited a study showing a downtown Detroit [[and ajacent area) population of about 75,000, with over a quarter of them having annual incomes between $100k and $250k, with 43% having incomes between $50 and $100k.

http://atdetroit.net/forum/messages/...tml?1187866312

I think it is an absolute falacy to use "old" downtowns as a model in the way that you did. Hudson's has been gone for years, as has Kresge, and other "traditional" downtown retailers. In general, downtowns are NOT the destination shopping districts that they used to be. And they won't be again.

But the impression I get is that some retailers are beginning to take notice that the landscape is changing, that downtowns as viable neighbourhoods are coming back, and that smaller footprint stores are best designed to serve these areas.

First off, the thread was written in 2007. We are near the end of 2011. A lot of things have changed in 5 years including a rapid population decline.

Second, I can't find that thread's report that this data is cited from so I can see how they came up with their numbers. If you're gonna argue points, I need to see the source of that data. If I go to their website socialcompact.org, they have a 2011 report citing data from 2009.

http://socialcompact.org/images/uplo...own_Report.pdf

I go to page 35 of that report Downtown CBD

It says that the traditional estimate of the population of the downtown CBD in 2009 is 7,094

I go further down the page to median household incomes for downtown CBD
It says the census for 2000 was $21,951
It says the traditional est. for 2009 is $25,690
BUT, their report [[the drilldown report) says the est. for 2009 is $44,379

WTF? So, the DEGC pays a company called Social Compact to come up with their own data that skewers the national census that much by using their own inhouse formula. If I were CEO of Target or JC Penny, I would throw this report in the garbage. These CEOs are going to be looking at data like I cited in my earlier post. Show me a national census using tax data to prove what you are saying because I'm not buying it.

With housing prices in Detroit the lowest they've ever been, I don't see how you can draw the conclusion that viable neighbourhoods are coming back to support national retailers like JC Penny. The only prospect for a national retailer so far has been Whole Foods in two years in midtown and they are a third the size of that JC Penny and the developer needs an almost dollar for dollar subsidy. Give me a break.

[davewindsor]

This isn't true. It's a fundamentally different business model and something very new for these retailers.

It's the same model. Detroit's had big box stores in the past and they've failed. You're not gonna see one again in the city because the tax data on median household incomes shows the residents don't make enough disposable income to support it.

[detmsp]

It's the same model. Detroit's had big box stores in the past and they've failed. You're not gonna see one again in the city because the tax data on median household incomes shows the residents don't make enough disposable income to support it.

It's not. I'm on the corporate staff of one of the aforementioned companies. It's totally different. But you know, go ahead and spout off stuff like this based on nothing. I'm sure you know more about my work than I do.

[mikestl]

I don't live in Detroit but I was wondering how the Somerset Collection citylofts store is doing? it seems like a great start to reinvigorate retail. if it does well, do you think this could set the foot print for further retail development downtown.

[corktownyuppie]

With housing prices in Detroit the lowest they've ever been, I don't see how you can draw the conclusion that viable neighbourhoods are coming back to support national retailers like JC Penny. The only prospect for a national retailer so far has been Whole Foods in two years in midtown and they are a third the size of that JC Penny and the developer needs an almost dollar for dollar subsidy. Give me a break.

First, I don't think the algorithms are "flawed". They obviously work for big box stores, and the risk in retail is -- in large part -- choosing their locations.

Second, the problem with Detroit data is that the current standard metrics are themselves flawed. We all agree that Detroit median income is an irrelevant data point. The sample size is too high to have any usefulness. Can you explain how Mudgie's can have a full restaurant on every weekday and weekend lunch hour while charging $8/sandwich in a city with a median income barely above the poverty line? But they do.

Data points for Downtown CBD also has its limitations. You are right that the income data has changed in the last 5 years. But while Detroit proper has gotten worse [[much worse), Detroit CBD has gotten better. And even moreso in the last 18 months.

Is median income the best measure for two medical students living together? Or two law students? Or a resident at DMC?

Is population median income a good metric when it excludes 2,000 daily commuters? Probably yes if you're opening a Meijer or Kroger, because suburban commuters can find one closer to their homes. But probably no if you're a Whole Foods because those same people might be compelled to stop there on the way home for a Whole Foods.

Look, I'm not arguing the tried and true methods of big box retail, nor am I convinced that Target or Penney's are next to open their doors. I'm just saying that Downtown CBD is a weird market.

I mean, does it really make sense that I'm more likely to go to a Meijer in Allen Park than the independent grocery store that's half the distance but at Lodge and Davison?

In summary, I think that the census and income data are essential tools for retailers of any size. But I would add that you need to also include some studies on "psychographics" and some analysis that takes into account the "weirdness" of consumer behavior in Detroit. I'm more likely to be in Allen Park than Northland in Detroit. I'm more likely to be in Royal Oak at their Sherwin-Williams than the closer one in Highland Park.

Sometimes I think the general models are over-simplistic...as if to say "Who would open up a Brooks Brothers in Romulus?" Lower-middle income and high unemployment. And yet inside the tiny sub-market we call Detroit Metro Airport lie some of the highest $/sq ft rates in the area.

That said...Target in Midtown? Still skeptical.

[douglasm]

The point that is being missed here is that we're not talking about a 2.1m sq. ft. Hudsons, or even a 200,000 sq. ft. Target but a small footprint 50,000 sq. ft. Penny's or a 100k Target.

Retail has changed dramatically in the 40+ years I've been involved in it and the traditional models don't really work anymore. Retailers, notoriously slow to change, are finally thinking outside the box, and I think that bodes well for urban retail planning.

[Bham1982]

This isn't true. It's a fundamentally different business model and something very new for these retailers.

KMart opened its multilevel, big-box Manhattan stores 20 years ago. The big-box corridor along Sixth Avenue in Chelsea is also about 20 years old. There are plenty of other decades-old big-box urban examples throughout the country.

Doesn't seem like a "fundamentally different" model, and doesn't seem "very new" to me.

[Bham1982]

Can you explain how Mudgie's can have a full restaurant on every weekday and weekend lunch hour while charging $8/sandwich in a city with a median income barely above the poverty line? But they do.

It seems quite obvious that Mudgie's would be foolish to look at median city income as a barometer of market viability.

Mudgie's market consists almost solely of downtown office workers. The relative size and wealth of downtown employee counts would be most relevant.

[casscorridor]

It seems quite obvious that Mudgie's would be foolish to look at median city income as a barometer of market viability.

Mudgie's market consists almost solely of downtown office workers. The relative size and wealth of downtown employee counts would be most relevant.

I frequent Mudgies but live in the greater downtown area, I know many others that do too. So while I'm sure a good portion of their business is office workers, they have a solid base of local residents as well.

[corktownyuppie]

It seems quite obvious that Mudgie's would be foolish to look at median city income as a barometer of market viability.

Mudgie's market consists almost solely of downtown office workers. The relative size and wealth of downtown employee counts would be most relevant.

Agreed. That's my point. Are retailer algorithms considering that data? If Target opens up next to DMC, are they considering the thousands of suburban employees who might see that as more convenient than going home?

If they are, then very well then. If they aren't...then shouldn't they?

And, I wouldn't say Mudgie's market is solely downtown office workers. Every time I go in there, half the people are midtown and corktown regulars. Lots of med school students, too.

[casscorridor]

In summary, I think that the census and income data are essential tools for retailers of any size. But I would add that you need to also include some studies on "psychographics" and some analysis that takes into account the "weirdness" of consumer behavior in Detroit. I'm more likely to be in Allen Park than Northland in Detroit. I'm more likely to be in Royal Oak at their Sherwin-Williams than the closer one in Highland Park.

So you'd rather shop in a white area like Royal Oak than a black area like Highland Park, even if its further away. I wouldn't exactly call that weirdness, I'd cal that racism.

[casscorridor]

Agreed. That's my point. Are retailer algorithms considering that data? If Target opens up next to DMC, are they considering the thousands of suburban employees who might see that as more convenient than going home?

If they are, then very well then. If they aren't...then shouldn't they?

It probably wouldn't be more convenient though, as there are Targets dotting every area of the burbs. There are only a few Whole Foods though, which means downtown workers would be much more likely to go to a Whole Foods than a target, unless they lived next to a Whole Foods.

Not to say greater downtown couldn't support a Target. I think big box retailers are well established right on the edge of the city, so all the outer neighborhoods of the city have access. Not so much in the central city, which is why big box retailers are likely to set up downtown. There may be a few downtown workers, but the demographic for a downtown Target [[mostly residents) would be far different than the Whole Foods [[half/half residents/workers)

[corktownyuppie]

You can call it whatever you want. I didn't say I'd "rather" shop in RO than Highland Park. I said I'm "more likely". Why? I'm in Royal Oak almost every weekend. Many of my friends live there. I'm never in Highland Park. I have no friends there.

The hours and inventory at the Royal Oak store are more [[or, at least were, the last time I was painting...)

This isn't racist. If you want, if you want to argue that it's "class"-ist, I'll accept that. You have no idea how much I've longed for a community that was saturated with highly-educated, upper middle class black and other minority families.

I'd probably fit in there better than anywhere else in Metro Detroit.

[wolverine]

Detroit cannot support a downtown traditional retail core for various reasons

Lack of critical population downtown. Maybe if you can boost the downtown population numbers up to 40,000-50,000 I could see the potential of a store opening.

No substantial mass transit network. Overall, the median household income in Detroit is pretty low, and Penny's is an affordable place to shop. Perfect, now how do you get the residents there? Parking is too expensive, so trains are the best alternative since buses take awhile. There is no train, and there is no future plan in place that would serve city residents far and wide.....only just a single commercial corridor that serves a fraction of city residents.

Competition from suburbs. Yep, still going strong. When you have all that free parking and other stores to shop at nearby, it's hard force to work against when trying to push for downtown retail.