Kresge's New Mini Mall

[Toolbox]

He's doing something smart and investing when everyone else is pulling out [[and also investing in yourself in a down economy) - if you have the money to do that, this is really the best time. Cheap prices, lots of availability, and competition that's hurting.

As to why the press - you frankly don't see that many people investing. I hear a lot of bitching about "people should do this" or "people should do that" but when the rubber comes to the road, it's nothing more than a peanut gallery. He's at least doing something.

Could he do better? Unequivocally, yes. Does he sound like just about every other apartment owner in the price range he specializes in I've heard of, in the city and the suburbs? Yep. He fills a market need.

In this age of the internet, people forget that you get what you pay for. I've lived in places ranging across the board in rent over the last decade plus - and the quality of the landlord directly equates [[most times) to how much you pay per square foot.

The places I stayed that were $500-$750 sound just like the complaints I hear about Dennis. The places that were $1000 and up, great landlords, great service, and that would be because they can afford to do that. There are always exceptions to every rule, but if you don't pay much, don't expect to get much.

How about him fixing up 2 of his other derilict buildings before taking on another project?

[digitalvision]

The reality is that there may be less business prospect in those two derelict buildings than in the new project at this time.

Isn't one or both the buildings you speak of in Capitol Park? I wouldn't spend ANY money in that neighborhood until the buses stop using that as a terminus.

You're going to get way more for rent/lease once the transit center is operational than before... and since the area is also in line for ObamaDollars[[tm) it only makes sense to move on that project in concert with or after those streetscape improvements are made.

It's very hard to raise rents, but easy to drop them; and with those improvements he'd probably get 20% or more than making them available now, setting a needlessly low price on an area that should fetch you much more in a short, well-defined time period. Timing is very important.

It's business, not charity. He's probably holding onto the properties to not let them get away, betting on a much better future for the area. Again, not a great track record for uality, however, he in general does develop his properties eventually - he knows what the actual market is instead of the pie-in-the-sky pipe dreams people want to sell folks on and even better in general doesn't use taxpayer dollars to fund it. It's urban pioneers, hipsters, micro-entrepreneurs, etc.

We're a stage 2 area on the way to a 3, and this forum [[and some of our city leaders) live in a dream world and talk like we're a 4 or 5 like New York City.

[Toolbox]

The reality is that there may be less business prospect in those two derelict buildings than in the new project at this time.

Isn't one or both the buildings you speak of in Capitol Park? I wouldn't spend ANY money in that neighborhood until the buses stop using that as a terminus.

You're going to get way more for rent/lease once the transit center is operational than before... and since the area is also in line for ObamaDollars[[tm) it only makes sense to move on that project in concert with or after those streetscape improvements are made.

It's very hard to raise rents, but easy to drop them; and with those improvements he'd probably get 20% or more than making them available now, setting a needlessly low price on an area that should fetch you much more in a short, well-defined time period. Timing is very important.

It's business, not charity. He's probably holding onto the properties to not let them get away, betting on a much better future for the area. Again, not a great track record for uality, however, he in general does develop his properties eventually - he knows what the actual market is instead of the pie-in-the-sky pipe dreams people want to sell folks on and even better in general doesn't use taxpayer dollars to fund it. It's urban pioneers, hipsters, micro-entrepreneurs, etc.

We're a stage 2 area on the way to a 3, and this forum [[and some of our city leaders) live in a dream world and talk like we're a 4 or 5 like New York City.

Neither building I speak of is in Capitol Park. One is at the corner of Gratiot and Broadway [[benn under construction for at least 5 years) and he also owns the old clinic on the east side of the I-75 by LP that has been rotting since he bought it. Guess he knows the market so well and did his due dilligence on those properties that have invested NOTHING to the surrounding neighborhoods.

Plain and simple he is a derilict building collector just like Higgens.

[digitalvision]

I know both those buildings...

There's no market for them, yet either right now... the elevator on the Cary needs to get fixed [[but i see photo shoots and the like going on in the building all the time, and he's actively attempting to rent the lower floor retail as well but there's very little market right now) and that's a very expensive proposition. And it's not been empty for five years, it's had tenants upstairs, I've been to their places and ate dinner in their kitchen [[best meal was a mean filet mignon, with a red wine, asparagus, and bacon potatoes).

He spends money as he has it instead of taking out big loans. He's a cash-flow investor, which is all that is really left in this economy.

You may call him a building collector, but he has way more active buildings in number and percentage than Higgins does.

He's not the Ritz, but he DOES develop his buildings eventually and he does fill them with tenants that pay taxes and shop at local stores and all of that good stuff.

[Huggybear]

It doesn't make any difference to me whether sitting on rotting buildings is motivated by sloth, greed or orders from the Almighty. Blight is blight.

Ask anyone who lives in Lafayette Park what it's like to pass Shapiro Hall every day. What's [[or was) K's plan for that decaying building? Oh, yeah, a hotel right in the middle of a quiet neighborhood [[and the only historic postwar neighborhood Detroit has).

He spends money as he has it instead of taking out big loans. He's a cash-flow investor, which is all that is really left in this economy.

You may call him a building collector, but he has way more active buildings in number and percentage than Higgins does.

He's not the Ritz, but he DOES develop his buildings eventually and he does fill them with tenants that pay taxes and shop at local stores and all of that good stuff.

[Rocko]

From this week's Model D:

Detroit Development News


April 21, 2009
Shops at Kresge planned for Woodward storefront

The historic Kresge Building on Woodward at State St. will soon debut as the Shops at Kresge, an urban mini-mall of specialty retailers. The 40,000-square-foot building will be home to 100 retail spaces, a restaurant, Woodward South, and a bar, 5 and 10 Bar, when all is said and done.

The first floor is targeted for specialty retailers -- imagine collectible memorabilia or a chocolatier -- and the second floor will cluster clothing boutiques. Eric Novack, leasing director for the Shops at Kresge, says the marketing strategy of the property owner, Dennis Kefallinos, includes reaching out to suburban boutiques that might be interested in entering the Downtown Detroit market. "We want to reduce everyone's overhead, reduce their square footage, inventory, shrinkage," he says. "We want to make this financially bearable and convenient for retailers."

Novack has four retailers already committed. He plans to open with 15 on the first floor to start. The retail spaces are sized from 120 to 400 square feet, although larger ones are possible, says Novack. Once the first and second floors are full, the Shops at Kresge will expand into the basement.

Woodward South and 5 and 10 were open temporarily for the Final Four. Once permanent licenses are in place, they will reopen for good.

Shops at Kresge is located at 1201 Woodward. It is owned by the Boydell Group, that also owns Russell Industrial Center and numerous loft buildings around town.

The public is invited to preview Shops at Kresge on April 30 from 4 to 9 p.m. No R.S.V.P. is required.

Source: Eric Novack, Shops at Kresge
Writer: Kelli B. Kavanaugh

I drove down Woodward late last week and there's an external 5 and 10 Bar sign on the face of the building facing Woodward now.

[oneway]

I don't see why this project would draw haters. I'm all for charming, local retail in the heart of downtown. Chicago can keep their Banana Republics'. Puke.

[Fury13]

I don't see why this project would draw haters. I'm all for charming, local retail in the heart of downtown. Chicago can keep their Banana Republics'. Puke.

Give me a break! There would be nothing wrong with a Banana Republic or a Gap on Woodward. Such stores would be evidence of a vital downtown.

I guess you'd rather "keep it real" with wig shops and vacant storefronts?

As for the project, I don't think it's drawing haters; some are simply questioning Keffalinos' integrity as a property owner and developer.

[oneway]

Hell yeah I keep it real.

But I wouldn't wish to keep it real with vacant storefronts, which is why anything like a Gap or Banana Republic would be a terrible idea - they couldn't be sustained in Detroit [[currently). Perhaps this new shopping center [[which will occupy a former vacant storefront) can survive by its selection and affordability, something that accurately reflects Detroit's economical demographics.

I concede to your point regarding the owner.

[Doma]

All investment in Detroit is good, I have a feeling that this will be successful and hopefully lead to more retail investment in the city.

Count me in as a customer!

[Rocko]

Finally, the Detroit News reports on it! [[4/24/09):

Friday, April 24, 2009
Kresge landmark may get mix of shops

His goal is to lure retailers to downtown Detroit site

Jaclyn Trop / The Detroit News

For decades, downtown shoppers could walk into the Kresge Building at Woodward Avenue and State Street and buy a variety of goods, from hats and window shades to bath brushes and hair nets.

That one-stop shopping experience has long disappeared from downtown Detroit, except for a few national drug stores. But a Detroit developer hopes to return the historic building to some of its former retail glory: this time as a mini-mall with a mix of national retailers and local boutiques to be called the Shops at Kresge.

"The odds for me to be successful are probably 10 percent," said Dennis Kefallinos, who also is the developer behind Russell Industrial Bazaar, an Albert Kahn-designed former factory complex turned into a small business incubator and marketplace.

"But I'm committed to Detroit. I think Detroit has a lot of potential."

Kefallinos envisions 120 retailers in 40,000 square feet of space that once housed the original S.S. Kresge 5 & 10, the forerunner of Kmart Corp. Plans call for specialty retailers on the first floor and clothing boutiques one level up. There is space in the basement for a grocer or other large retailer, according to Eric Novack, leasing manager.

The mall will open when 15 retailers commit to the project -- with a June target date. Most retail space measures between 120 and 400 square feet and will rent from about $600 to $1,000 a month, he said.

So far, Novack said, six tenants have signed: a chocolatier, shoe store, clothing boutique, sports memorabilia shop, purse store and Mediterranean café. Kefallinos' company, Dionysia Properties, has opened two ground-floor eateries, Woodward South restaurant and 5 and 10 bar, across from where Kresge's original cafeteria stood.

"People are looking for a destination spot," Kefallinos said. "Everybody knows Kresge's."

Kefallinos has owned the building, where S.S. Kresge launched his business in 1899, for about 10 years.

Local retail experts doubt the project could attract national chains.

"The market for a vibrant downtown shopping district is just not there," said Ed Nakfoor, a Birmingham-based retail consultant. "I just don't really see it becoming this thriving marketplace."

Jim Bieri, president of Bieri Co., a Detroit-based retail brokerage and consulting firm, said the project is better suited to artists and smaller boutique retailers trying to enter the Detroit market. With low rents and a straightforward setup, the Shops at Kresge could be a good starting point for aspiring entrepreneurs, he said.

A Web site advertising the downtown project, shopkresge.com, says the center will "offer stunning and countless boutiques that stock only the finest of gifts and other products or services."

Kefallinos said the mini-mall will be open daily and feature more upscale shopping than the Russell Industrial Bazaar, which opened in October and houses boutiques, eateries and artist space off I-75. He said he did not know the cost of the Kresge project. Tiffany Lake is moving her designer footwear boutique from the Russell Bazaar to the Kresge Building because she likes the idea of bringing a "higher-end mall to the city." Her shoes range in price from $85 to $500.

She said she hopes the Woodward Avenue storefront draws a strong weekday work crowd and downtown passersby.

jtrop@detnews.com [[313) 222-2300

http://www.detroitnews.com/article/2...40353/1001/BIZ


There are some photos, sketches, and maps at the hyperlink.

[vivadetroit]

rsa, did you live in the Grand Lofts in SW Detroit? From what I hear from people who transfer from other Boydell properties to this one, the leaky roof is a perk in all Boydell buildings. Except for the Greektown Lofts, which are the nicest ones he's got. Lived there for a year and loved it. Had a great unit, no problems, except for the lack of a working elevator and having to climb up 6 flights of stairs!

Interestingly enough, they're working like crazy to finish the building. Rumor has it that he might sell this building....

[buzzman0077]

I just took a look at the Greektown Lofts. If those are the best of the group then I believe he nearly aor does fit the definition of a slum lord. That property was not well maintained.

[rsa.313]

viva; i lived in the lafayette lofts. i think it's really luck of the draw. i have a friend that lives in the greektown lofts, on the second floor, and there's leaky pipes in his unit. the big issue is that things never get fixed properly. [in lafayette, they would just keep dumping tar on the roof thinking that would fix it, but it only lasted a few months.]

[French777]

I heard there was a preview of this place. . . . . Did anyone go?

[DetroitDad]

http://shopkresge.com/

They updated their web site complete with floor plans. I also noticed that they took the lease rates off the site, which leads me to believe they possibly lowered them.

I could have sworn they mentioned a optimistic June 30th opening. Has anyone heard any other updates yet? It doesn't appear that any additional work has been done from the outside, but I guess that might not mean that much.

[davewindsor]

Is anything in this building actually open? If so, what? And, what are their hours/days of operation so I can go down there and take a look inside? I was there a couple weeks ago during the week and the lights were off and I saw no activity inside. No bars, no rental agent on duty, nothing, nadda.

[DetroitDad]

Is anything in this building actually open? If so, what? And, what are their hours/days of operation so I can go down there and take a look inside? I was there a couple weeks ago during the week and the lights were off and I saw no activity inside. No bars, no rental agent on duty, nothing, nadda.

I believe it was said that they would open by June 30th if they had enough tenants sign leases. It was hopping at the preview event, but has since gone silent.

[stromberg2]

What about the new bar next door? Anybody been in there?

Stromberg2

[French777]

Is it still planned to Open Summer 2009? It looks the same as 3 months ago

[stasu1213]

Dave Bing probably has stopped it

[davewindsor]

Is it still planned to Open Summer 2009? It looks the same as 3 months ago

It looks like it's done, but I don't think he can get it rented. I've seen couples walking around inside through the bay windows. It looks like a salesperson showing it to potential clients. Maybe he's testing too high of a price.

[drjeff]

I drove by this morning and it looked like they were doing interior construction.

[French777]

Good...Because I didn't want this project to fall through the cracks

[stasu1213]

Whenever you see "Open in summer of 2009" posted in detroit; it really means "Open in 2010 or whenever" Detroit is notorious in getting hopes up high then letting you down.