Downtown Retail

**mikeg19** · February-08-10, 04:53 PM

Originally Posted by esp1986

The condos were sold... however, those were only tentative agreements. When the housing market collapsed along with the credit market, it made it difficult for the people who agreed to buy them to arrange financing. When the building opened, only six condos were officially sold. As of the first anniversary of the building back in October, John Ferchill was quoted as saying "about 15-20 of the units remain" [[out of 67). Since then, a few more have sold. Also, at the time of the first anniversary, Mr. Ferchill also said that the building's versatility was keeping it open, i.e. weddings, meetings, conventions...

The bottom line, is that the building is paying it's bills... it is not doing great, but there's not a lot that is right now... but the building is paying the bills and keeping it's metaphorical head above water, and with the big increase in traffic to the auto show this year, and the seemingly recovering [[slowly) economy, there should be no reason to believe that the building will close. It is not like Ferchill has a huge, unmanageable loan outstanding on the building... because of the fact that it was primarily publicly financed, there is little long term cost, so the cost of keeping it open is limited predominatly to the cost of day to day operations.

That's exactly what I thought. So I'm not understanding why so many people on here are spelling doom for the BC. As long as they are weathering the storm until the economic slump is over, why worry? I think that this is actually good news for the BC in that it is versatile and can keep its head above water in a crap economy, that should mean it can really take off when the economy is actually rolling again.

**detmsp** · February-08-10, 05:05 PM

Originally Posted by mikeg19

That's exactly what I thought. So I'm not understanding why so many people on here are spelling doom for the BC. As long as they are weathering the storm until the economic slump is over, why worry? I think that this is actually good news for the BC in that it is versatile and can keep its head above water in a crap economy, that should mean it can really take off when the economy is actually rolling again.

Well you are assuming that they are weathering the storm. Someone posted in another thread that the BC was not making any payments on loans and very close to default. Is that true? I have no idea, but it's certainly possible.

**esp1986** · February-08-10, 05:06 PM

Originally Posted by mikeg19

That's exactly what I thought. So I'm not understanding why so many people on here are spelling doom for the BC. As long as they are weathering the storm until the economic slump is over, why worry? I think that this is actually good news for the BC in that it is versatile and can keep its head above water in a crap economy, that should mean it can really take off when the economy is actually rolling again.

The Book Cadillac has really established itself, in a short time, as a premier event center. Just because of it's legacy, it has returned as a prime destination for weddings and corporate meetings alike. It doesn't have to rely entirely on booking the rooms, it also makes a lot of money from weddings. I am with you in this respect... just months after John Ferchill said they are staying afloat, just as the economy is showing signs of life, people start saying it is failing...

EastSider · February-08-10, 05:50 PM

Originally Posted by Hermod

Sear's and Penney's no longer build stand-alone stores in the burbs.

What about the Roseville Penney's, on Gratiot? That's the model for the store's future growth, or was when the company opened it a few years ago.

jflick3535 · February-08-10, 06:48 PM

Originally Posted by esp1986

The Book Cadillac has really established itself, in a short time, as a premier event center. Just because of it's legacy, it has returned as a prime destination for weddings and corporate meetings alike. It doesn't have to rely entirely on booking the rooms, it also makes a lot of money from weddings. I am with you in this respect... just months after John Ferchill said they are staying afloat, just as the economy is showing signs of life, people start saying it is failing...

Is that the same John Ferchill that said almost all of the condos were sold--when a majority were not sold[[before the economic crisis) the same john Ferchill that said the million dollar condo was sold when in fact it wasn't [[before the economic crisis)

now you choose to believe him?

When are people around here going to learn that real estate developers are full of crap?

The hotel industry in Metro Detroit is in a tail spin right now-- properties are losing flags left and right due to the lack of funds for pip programs
Then you add a shitload of hotel rooms to a market which was already depressed and a majority of those hotel rooms are casinos who don't give a rats ass about their ADR.

Sorry ya can't stay afloat with just meetings and weddings especially if your occupancy rate is below 30%

**esp1986** · February-08-10, 07:32 PM

Originally Posted by jflick3535

Is that the same John Ferchill that said almost all of the condos were sold--when a majority were not sold[[before the economic crisis) the same john Ferchill that said the million dollar condo was sold when in fact it wasn't [[before the economic crisis)

now you choose to believe him?

When are people around here going to learn that real estate developers are full of crap?

The hotel industry in Metro Detroit is in a tail spin right now-- properties are losing flags left and right due to the lack of funds for pip programs
Then you add a shitload of hotel rooms to a market which was already depressed and a majority of those hotel rooms are casinos who don't give a rats ass about their ADR.

Sorry ya can't stay afloat with just meetings and weddings especially if your occupancy rate is below 30%

Clearly, you have no idea how much these places make off of events... and you clearly don't understand how the sale of these things worked... when they "sold them," they had signed contracts with nonrefundable down payments... but since these projects take time, they don't pay the whole cost until they are finished... so when it came time for the buyers to pay, they couldn't obtain financing... get your facts straight... technically, they had binding contracts to sell these units, so they qualified as sold, and it isn't Ferchill's fault that they couldn't get financing.

**Hermod** · February-08-10, 07:39 PM

Originally Posted by esp1986

Clearly, you have no idea how much these places make off of events... and you clearly don't understand how the sale of these things worked... when they "sold them," they had signed contracts with nonrefundable down payments... but since these projects take time, they don't pay the whole cost until they are finished... so when it came time for the buyers to pay, they couldn't obtain financing... get your facts straight... technically, they had binding contracts to sell these units, so they qualified as sold, and it isn't Ferchill's fault that they couldn't get financing.

Big difference between being "under contract" and being "closed". I would not considered it to be a final sale until closing. Prior to that, all the seller has is a deposit [[which a buyer can often sue to get back).

**ghettopalmetto** · February-08-10, 07:42 PM

Originally Posted by jflick3535

Is that the same John Ferchill that said almost all of the condos were sold--when a majority were not sold[[before the economic crisis) the same john Ferchill that said the million dollar condo was sold when in fact it wasn't [[before the economic crisis)

now you choose to believe him?

When are people around here going to learn that real estate developers are full of crap?

The hotel industry in Metro Detroit is in a tail spin right now-- properties are losing flags left and right due to the lack of funds for pip programs
Then you add a shitload of hotel rooms to a market which was already depressed and a majority of those hotel rooms are casinos who don't give a rats ass about their ADR.

Sorry ya can't stay afloat with just meetings and weddings especially if your occupancy rate is below 30%

Are you implying that you know more about the finances of the Book Cadillac than John Ferchill does?

And you know that its occupancy rate is below 30%?

And you know that it's not staying afloat with "just meetings and weddings"?

Please provide supporting evidence.

**stasu1213** · February-08-10, 08:22 PM

I dont think that Detroit will get anything until the Mayor finish downsizing this city. He had been boisting about that since he had gotten into office. We probably would get lightrail after that feat is completed.

**DetroitPlanner** · February-08-10, 08:49 PM

Originally Posted by Hermod

Most cities of any size supported a pair of downtown departments stores. One was usually the premier store [[Macy's, Marshall Field's, Wanamaker's, Hudson's, Hecht's, Thalhimer's) and one was the number two store [[e.g. Crowley's). How many cities in the US still have a flagship store in the downtown area? Sear's and Penney's no longer build stand-alone stores in the burbs. The current model for retail is for two department stores plus Sear's and Penney's to provide a four store anchor to a regional mall. Norfolk did build a regional mall downtown in the last fifteen years [[MacArthur Center). The last time I was there [[2008) it was still doing reasonably well, but they have used highways and other structures to isolate the downtown from the lower proletariat.

You're making pretty good points here, however there has been a shift over the last five years or so to build stand alone stores instead of stores in regional malls. These stores may share parking lots with pseudo strip malls known as Lifestyle Centers. This is a reaction to seeing much of their market share shifting to this preferred style of shopping. Personally I think of lifestyle centers as just stripmalls putting purfume on the pig, but a lot of folks think they are the cat's pajamas.

**stasu1213** · February-09-10, 06:28 AM

Originally Posted by EastSider

What about the Roseville Penney's, on Gratiot? That's the model for the store's future growth, or was when the company opened it a few years ago.

I think that the day of the stand alone department store has passed.

**stasu1213** · February-09-10, 06:30 AM

Their had also been developers like Northern Group from New York who bought a couple of buildings downtown and a couple of apartment complexes, laid off the eimployees with the promise of bringing business into downtown, then pull out after a couple of years of ownership. That helps with the declining of the BC

**DetroitPlanner** · February-09-10, 08:24 AM

Originally Posted by stasu1213

I think that the day of the stand alone department store has passed.

Since the opening of the Gratiot store in Roseville Penny's has built new free standing stores in White Lake, at I-94 and 23 Mile, Greek Oak, and proposed one for the Fairgrounds. If the free standing store does not work as a concept why would not Penny's just reopen their store at Northland as opposed to building something new close-by?

**stasu1213** · February-09-10, 09:58 AM

Originally Posted by DetroitPlanner

Since the opening of the Gratiot store in Roseville Penny's has built new free standing stores in White Lake, at I-94 and 23 Mile, Greek Oak, and proposed one for the Fairgrounds. If the free standing store does not work as a concept why would not Penny's just reopen their store at Northland as opposed to building something new close-by?

IIsn't the JCPenney in Roseville connected to another building? Is it two stores under one roof or does the other store sits in it's own building. I will stand corrected. Northland is a sinking ship. I don't see any major retail store opening in that shopping center. Sears did open a store in Eastland. So did Burlington. One thing about the JCPenney store is it is functional for any entity to move in if JCPenny decides to move out. The days of the art deco stand alone department stores are a thing of the past. In my opinion once the culture of people change in Downtown Detroit and along E Jefferson, going north on Grand River, Gratioit and Woodward, you will see the type of stores change. No more wigs and braided hair shops. No more low rated beauty shop and barber shops. You will have more boutiques and shops that would cater to the general community in the area and not just one segment of the population. JCPennys and Target would set up shop in the strip malls within the inner city and downtown

EastSider · February-09-10, 10:12 AM

Originally Posted by stasu1213

IIsn't the JCPenney in Roseville connected to another building? Is it two stores under one roof or does the other store sits in it's own building. I will stand corrected....The days of the art deco stand alone department stores are a thing of the past.

The Roseville Penney's is it's own building. There is a cooking school around the back, and the corner has room for a small 'convenience' style retail, but it's not in a strip mall, lifestyle center or other retail collection by any stretch of the imagination.

And nice way to recast your argument and suddenly specify "art deco" stores are a thing of the past.

**iheartthed** · February-09-10, 10:43 AM

Originally Posted by detmsp

Well you are assuming that they are weathering the storm. Someone posted in another thread that the BC was not making any payments on loans and very close to default. Is that true? I have no idea, but it's certainly possible.

Even if it did default and go bankrupt, I highly doubt the complex would be closed down and boarded up. In the event of bankruptcy, another hotel operator would probably come in and purchase the property at a discount.

Now, that might not spell so well for rehabs of other buildings in Detroit in the near future, but it is EXTREMELY unlikely that the B-C will revert back to being an abandoned structure anytime soon.

**esp1986** · February-09-10, 12:20 PM

Originally Posted by iheartthed

Even if it did default and go bankrupt, I highly doubt the complex would be closed down and boarded up. In the event of bankruptcy, another hotel operator would probably come in and purchase the property at a discount.

Now, that might not spell so well for rehabs of other buildings in Detroit in the near future, but it is EXTREMELY unlikely that the B-C will revert back to being an abandoned structure anytime soon.

Someone needs to define what they mean when they say the "Book-Cadillac" is nearing default... is it Ferchill on the building [[which I doubt), or the Westin Hotel [[which would be a little more believable)??

**iheartthed** · February-09-10, 12:42 PM

Originally Posted by esp1986

Someone needs to define what they mean when they say the "Book-Cadillac" is nearing default... is it Ferchill on the building [[which I doubt), or the Westin Hotel [[which would be a little more believable)??

I believe that the Ferchill Group owns the entire building, so if it defaults then it would affect the entire property. Starwood [[Westin) is only the operator of the property [[Similar to how GM owns the Ren Cen complex while Marriott operates the hotel). If the property goes into default, it is likely that it could be bought for a very steep discount on what Ferchill put into renovating the property. That alone makes it very unlikely that this building would be shuttered again any time soon.

[[ETA: The case of a default might not spell doom for this particular property, but it would very much affect how investors gauge the viability of other renovation projects in Detroit. So if indeed this project does default, it will very likely kill off other potential rehab projects...)

**stasu1213** · February-09-10, 05:30 PM

Originally Posted by EastSider

The Roseville Penney's is it's own building. There is a cooking school around the back, and the corner has room for a small 'convenience' style retail, but it's not in a strip mall, lifestyle center or other retail collection by any stretch of the imagination.

And nice way to recast your argument and suddenly specify "art deco" stores are a thing of the past.

I had also said that I will stand corrected if JCPenneys did stand alone.