What's next for closing Michigan Book & Supply in downtown Ann Arbor?
(See related story: Michigan Book & Supply, two Ypsilanti bookstores to close as result of bankruptcy)
News that Michigan Book & Supply will close its store on South State Street in Ann Arbor - just steps from the University of Michigan - presents a tremendous opportunity for downtown, commercial real estate agents said Monday.
The building at 317 S. State, as it looked in the early 1970s when it was an S.S. Kresge store.
Ann Arbor District Library archives
“It’s a spectacular corner,” said Mike Giraud of Swisher Commercial in Ann Arbor. “I don’t think they’re going to have any trouble finding a tenant for it.”
Yet that leaves a question for Ann Arbor: What type of business - or businesses - will stake a claim next to the northern end of U-M’s Diag?
The first pick of the owner, Hogarth Management LLC, would be a single, non-restaurant tenant. However, consideration from restaurants and businesses that require a smaller space - and subdivision of the store - will be considered, said property manager Bob Gates of First Martin Corp.
“The owner has a strong preference, if possible, to lease the entire building to a single user,” Gates said.
The two-story building also has a basement that MB&S uses for textbook sales. Each level has about 6,000 square feet of usable space, and there’s an elevator.
The previous occupant was S.S. Kresge, which operated one of its discount variety stories for many years into the 1980s. Michigan Book & Supply’s lease began on July 1, 1989, Gates said.
The location at the “top” of the Diag gives the property a unique prominence even among the blocks of South State Street that continue to emerge as the most vital - and expensive - commercial real estate in the city.
Rental rates are climbing above the $40 per square foot as ground-floor spaces turn over, said Deb Pearson, leasing agent for the Oxford Cos., which owns and manages several South State buildings between North University and East Washington.
“I won’t be surprised to see rents going up to $45 (per square foot) down here,” she said.
Many of the newer tenants are restaurants, like Five Guys. But a newer CVS Pharmacy and 7-Eleven also mingle amid a relocated Get Your Game On and clothing retailer Pitaya.
Retaining elements of the traditional retail mix is important not just to Hogarth: It’s been a goal of Oxford, too, Pearson said.
“We feel responsible for keeping (retail) diversity down here,” Pearson said.
To that end, rental rates for retailers likely would end up less than for a restaurant. At the same time, there would be less wear and tear on the building, and it likely would require a less-extensive build-out.
Gates said he doesn’t have an initial asking rental rate, since it’ll depend on the end-user and the terms.
The effort to find a single tenant that can effectively use the second level of the building could be a challenge, some real estate brokers said.
There are some successes with second levels in the South State blocks: Sava makes use of a loft space, while M-Den, Noodle & Company and CVS all use the 2nd floors of their buildings.
But it also presents a challenge for a retailer needing 12,000 square feet that typically operates on a single level, like Urban Outfitters: Effectively using all of the space to drive the sales to support the rental rate.
“Big retailers want (to pay) 8 percent of their gross to rent,” said Jim Chaconas of Colliers in Ann Arbor. “That’s a big gross. You have to do sales of $300- to $400 per square foot in sales to justify it.”
The opportunity to lease the soon-to-be-former bookstore also comes at a time when there are other retail opportunities nearby. They including the former Borders store on East Liberty and the new Zaragon West building on East William.
But neither have the same proximity to The Diag: “It’s such a critical spot right there,” Pearson said. “It’s probably the best location on Central Campus.”
The building is assessed at $2.06 million, giving it an estimated market value of $4.1 million. It’s included in the South State Historic District.
Hogarth is owned by the Borders family, with Tom Borders listed on bankruptcy documents as the contact. He is co-founder of Borders Books & Music, which closed after bankruptcy in 2011.
Paula Gardner is News Director of AnnArbor.com. She can be reached by email or followed on Twitter.
Comments
sdenise
Wed, Mar 14, 2012 : 1:44 p.m.
As an artist I'm upset that there will be no local place to buy good art supplies. Supplies at Michaels are limited. I'm forced to go on-line or drive all the way to Dearborn for the Dick Blick store or Detroit for the Utrecht store or the CCS Art School supply store. We already lost the art supply store in Ypsi. It's not always good to buy or try new supplies "sight unseen". Also an art supply store greatly reduced in size then becomes too expensive. Thank goodness for Kay Yourist's business on Broadway for the best selection of ceramic tools in SE Michigan. Is there someone out there to keep access to quality art and printing supplies going for us.
Cossur
Tue, Mar 13, 2012 : 11:39 p.m.
Move the Kiwanis there. They seem to be doing a great business. Have an art supplier on the main floor and make the basement a "Blind Pig" style club. That makes great use of all the space!
anoldguy
Tue, Mar 13, 2012 : 4:32 p.m.
Let's bring back Drake's Sandwich Shop. If you want, add a microbrewery.
MjC
Tue, Mar 13, 2012 : 3:45 p.m.
Wherever there's a CVS, there's a Rite Aid around the corner.
a2miguy
Tue, Mar 13, 2012 : 2:18 p.m.
Bring back State Discount and the Continental Restaurant.
Mark
Tue, Mar 13, 2012 : 1:21 p.m.
Apart from the loss of a college bookstore (and yes, textbooks are a scam, but don't blame the retailers -- blame McGraw-Hill and other publishers - they set the prices and the model), the art supplies at MB&S are what got me to shop there. UM has a large art-student crowd, and Ann Arbor has a lot of artists. Big retailers like Michaels do not carry the really odd stuff that many artists need. This looks like a good opportunity for a Dick Blick store to enter into the Ann Arbor market. The only one I know of in MI is in Dearborn. Or, an independent art supply store could start up near campus -- maybe there could be a co-op type of art store. Once again we see how large companies can really screw things up.
Brett
Tue, Mar 13, 2012 : 5:54 a.m.
Evidently the owner of Bivouac owns the building, so who knows maybe they will move over there because they don't actually own the location they are in.
GoBlue1984
Tue, Mar 13, 2012 : 5:40 a.m.
Let's tear the building down and turn it into a "green space" ... who needs the tax dollars from a business -- this is Ann Arbor after all. We'll just write a few more tickets to people who still use cars -- that'll show 'em!
Tru2Blu76
Tue, Mar 13, 2012 : 4:50 a.m.
Every time I see a photo of that S.S. Kresge store, I choke up a little. Our daughter learned to drink from a straw at the lunch counter there (have photo of THAT, you can be sure - lol). What to put in there now? Well - I don't think anyone knows for sure. I'd take the scientific approach if possible (affordable): first do a complete market demographic study to see what goods & services are most desired and least served in the Ann Arbor Area. Or - combine the former Borders store and this one: keep them exactly the way they are and renamed them both: Ann Arbor Museums of Empty Stores. When Rick Snyder is recalled or loses the next election: invite him to be curator.
Carl
Tue, Mar 13, 2012 : 1:57 a.m.
I've been to 4 Urban Outfitters that have 2 floors, not sure where you are getting that from.
blahblahblah
Tue, Mar 13, 2012 : 2:20 a.m.
Urban Outfitters only has one floor at its current location. If they moved to the MI Book & Supply location they could have 2 levels (or three) just like all those other locations you have visited.
whatsupwithMI
Tue, Mar 13, 2012 : 1:36 a.m.
I vote for a CVS or Walgreens-- WITH concomitant marijuana dispensary attached.
Old Salt
Tue, Mar 13, 2012 : 1:29 a.m.
Brin Back Kresge..We need a store like that used to be on that corner
Tintin Milou
Tue, Mar 13, 2012 : 1:05 a.m.
I guess it's pretty clear that we have to tear down the building and make a parking lot out of it.
Tom Joad
Tue, Mar 13, 2012 : 12:28 a.m.
a tribal casino...just a joke. Thankfully Ann Arbor doesn't have to resort to casino gambling to fill city coffers like the rest of the Michigan
GoBlue1984
Mon, Mar 12, 2012 : 11:09 p.m.
Bongs and Thongs... it's a better location for them lol
Some Guy in 734
Tue, Mar 13, 2012 : 12:59 p.m.
Is it appropriately zoned?
justcurious
Mon, Mar 12, 2012 : 10:17 p.m.
That would be Uptown Ann Arbor to Ann Arbor natives. State Street equals uptown. Main Street equals Downtown. Bring back the Woolworth's that used to be there.
JD Scott
Mon, Mar 12, 2012 : 9:10 p.m.
I'd love to see another music venue go up, provided it doesn't host cheesy cover bands. Something more along the lines of what The Blind Pig still is and maybe what the Second Chance was, way back when.
blahblahblah
Mon, Mar 12, 2012 : 8:54 p.m.
Urban Outfitters should move to that corner. The State Theatre should reclaim it's former first floor space, starting serving alcohol and be renamed the State Theatre Drafthouse Cinema.
treetowncartel
Mon, Mar 12, 2012 : 8:34 p.m.
How about a Deja Vu for the local Ypsichondriacs.
Sparty
Mon, Mar 12, 2012 : 8:33 p.m.
Nice chain restaurant
Goofus
Mon, Mar 12, 2012 : 8:26 p.m.
Blick Art Supply Store. To replace the loss of the art store already there. There are now no professional art supplies stores in Ann Arbor, a city of the arts? Micheal's Crafts does not count.
Mark
Tue, Mar 13, 2012 : 1:25 p.m.
I didn't see this before I posted that Dick Blick would be a good place to have here in Ann Arbor. You are right, there is no professional art supply store here, and its tragic. If I need 2 dozen sheets of matboard, I am not going to Michaels. I'll order them from Dick Blick.
JRW
Tue, Mar 13, 2012 : 1:21 a.m.
I agree totally. Michael's crafts is just an overpriced store filled with "made in China" craft supplies. Real art supplies do not exist in that store. Most of it is a rip off.
Carole
Mon, Mar 12, 2012 : 8:26 p.m.
A bookstore -- it is very sorrowful to me to have so many bookstores going by the way side. Sorry, I'm still one of those readers who loves to turn pages. Books don't crash.
Jake C
Mon, Mar 12, 2012 : 10:35 p.m.
Awww, how cute. You think MB&S actually sold books.
A2comments
Mon, Mar 12, 2012 : 8:20 p.m.
The reality is that any new business would have to spend a great deal of money in Marketing to generate the level of sales needed to justify the rent. I would see a Walgreens likely. The business has to survive on foot traffic - there isn't going to be anything that needs a parking lot like Whole Foods, which can't survive on foot traffic with most of it students. I've been in the CVS - the upstairs register area was being used for inventory, and the downstairs is nearly all self-checkout, keeping their costs low. Inventory on items I was looking for was sparse.
Randy Parrish
Mon, Mar 12, 2012 : 8:19 p.m.
Rumor is most items and art supplies will be moved back over to Ulrich's Bookstore, which closed it art dept. down years ago. Both are owned by Nebraska Books.
JSS
Mon, Mar 12, 2012 : 8:01 p.m.
For the sake of us artists, somebody please fill the gaping void that the absence of MB&S's art supply department will leave!
kelpav18
Tue, Mar 13, 2012 : 6:20 p.m.
The store closes on the 23rd, Paula.
Paula Gardner
Mon, Mar 12, 2012 : 8:08 p.m.
Ulrich's will remain open. It's part of the same chain, and some of the inventory is being moved to that store before MB&S closes by March 31.
Some Guy in 734
Mon, Mar 12, 2012 : 8:03 p.m.
I'd love a Dick Blick so I wouldn't have to go to Dearborn. It's a chain, though.
Suzanne
Mon, Mar 12, 2012 : 7:52 p.m.
Too bad Kresge's isn't in business anymore...need something affordable!
Jake C
Mon, Mar 12, 2012 : 10:32 p.m.
Forget Kresge, Wal-Mart is where it's at these days! That'll fit in a tiny campus location with no parking, right?
ChrisW
Mon, Mar 12, 2012 : 8:44 p.m.
Kresge turned into K-Mart who later merged with Sears.
zanzerbar
Mon, Mar 12, 2012 : 7:58 p.m.
Kresge's is now K-Mart......I think.
Tom Smith
Mon, Mar 12, 2012 : 7:51 p.m.
Unfortunately, I suspect the likeliest bidder will end up being Walgreen's or something similar. They always seem determined to get right in the face of any CVS location and vice-versa.
Karen
Mon, Mar 12, 2012 : 7:40 p.m.
I would love a Trader Joe's!
Andy
Tue, Mar 13, 2012 : 2:06 p.m.
@itsworthwhatyoupaidforit I disagree. Consider the farmers market/Sparrow Market/food co-op in Kerrytown, which make do with only street parking. There is no inherent reason a grocery store should require parking.
Bob
Tue, Mar 13, 2012 : 2:05 a.m.
This doesn't seem like a bad idea actually...I wouldn't drive there, but think of all the students that would stop in on their way home/to the dorms.
JRW
Tue, Mar 13, 2012 : 1:23 a.m.
I love TJs, but without extensive foot traffic, they would not survive. The TJ location on Washtenaw is one of the top 10 TJ stores in the country with over 12,000 customers per month. I doubt any downtown location could come close.
itsworthwhatyoupaidforit
Mon, Mar 12, 2012 : 7:46 p.m.
The last thing TJs needs is another store with a woefully inadequate parking situation. I'd love to see them expand, or add a second store, but PLEASE let it be where you don't have to risk your personal safety and sanity to navigate the parking lot.
zanzerbar
Mon, Mar 12, 2012 : 7:38 p.m.
Seeing how the Kiwanis have the only remaining department store downtown, bring back Kresge's (K-Mart ) You've got 3 full floors to stock with everything a student needs.
JRW
Tue, Mar 13, 2012 : 1:26 a.m.
Dream on. I agree that a 3 floor real department store would be great. No chance, however, as long as Briarwood has a lock on the department store business. The lack of parking is a problem for any large retailer. If A2 had a healthy mix of people living "downtown" and "uptown", with a good grocery store (not 7-11 or White's), then maybe a department store could be supported. Remember Jake's? However, it's mostly students living downtown and uptown and on campus, so whatever comes in will have to cater to that crowd.
alterego
Mon, Mar 12, 2012 : 7:27 p.m.
Indoor batting cages and mini-golf!
JRW
Mon, Mar 12, 2012 : 7:24 p.m.
No more restaurants. No more coffee shops. No more overpriced gift and clothing "boutiques." No more bars. No more chain drugstores or convenience stores. No more ice cream shops.
a2miguy
Tue, Mar 13, 2012 : 2:07 p.m.
No more Ann Arbor.
Jake C
Mon, Mar 12, 2012 : 10:30 p.m.
So, no more stores that actually earn money in this area in 2012? If you'd like to open up a used vinyl record store or head shop or independent used book store at this location, and you've got the cash, feel free. But unless you own the property, you probably shouldn't be making any demands about what the property owner should do.
Dixborodad
Mon, Mar 12, 2012 : 7:22 p.m.
stick with retail...needs high sales per square foot....Apple store!
rm1
Mon, Mar 12, 2012 : 10:42 p.m.
An Apple store seems pretty unlikely, with the Apple store at Briarwood Mall about four miles away, with much more convenient parking.
Some Guy in 734
Mon, Mar 12, 2012 : 7:20 p.m.
Preemptively, before a commenter moans that Ann Arbor will surely head to H-E-Double-Hockey-Sticks in a handbasket if a chain goes into that location... Just remember that Michigan Book & Supply is owned by Nebraska Book Company, a chain. And the previous tenant, Kresge, was a chain, too. That's many decades of chain businesses that never seemed to bother us old-time Ann Arbor folk.
JRW
Mon, Mar 12, 2012 : 7:28 p.m.
An occasional chain store is ok, and back in the old days, there were a few chains, such as Kresge, but there were far more independently owned shops and restaurants around as well at the same time. The loss of independently owned shops is the problem. The cause of the homogenization of the A2 commercial districts is exorbitant rents. It forces out independently run shops.
tmad40blue
Mon, Mar 12, 2012 : 7:16 p.m.
It would be nice if Ann Arbor had a jazz club again.
Bob
Tue, Mar 13, 2012 : 2:07 a.m.
I would like that as well.