DDA asks whether it should be recruiting retailers to downtown Ann Arbor
Visitors to downtown Ann Arbor walk past a rack of clothes on the street as a shopper looks over the merchandise.
Angela J. Cesere | AnnArbor.com
Those are questions DDA officials posed to two Ann Arbor-based real estate professionals on Wednesday during a meeting of the DDA's economic development committee.
Ed Shaffran, owner of the The Shaffran Companies, and Mike Giraud, vice president of Swisher Commercial, both suggested the DDA should approach the issue with caution.
"Frankly, there's a lot that the DDA is already doing just in terms of improving the downtown areas, and that helps a lot," Giraud said. "In terms of actually going out and recruiting specific retailers, I don't think there's a lot the DDA can do without stepping on a lot of toes."
Ed Shaffran offers his thoughts on downtown retail recruitment to Ann Arbor DDA board members on Wednesday.
Ryan J. Stanton | AnnArbor.com
Maintaining a core shopping district, even amid the intense interest from restaurants seeking to open downtown, is a goal of several advocates. So is preserving a balance between unique independents and chain operations.
Shaffran pointed to the incentives used to lure Google to downtown, including parking spaces in the Liberty Square structure and tax breaks. Google originally planned to bring 1,000 jobs to Ann Arbor, but so far it has delivered about 250.
"Was that a failure of the system?" Shaffran said, agreeing with Giraud that offering incentives can be a slippery slope.
"Is it for everybody? Is it for the mom-and-pop shoe store I'm going to open on Fourth Avenue? Or is it only for the company that's going to hire 100 people? Where do we draw the line?"
Shaffran suggested another idea.
"Maybe the incentive the DDA would offer would be simply promoting the downtown, whether it be in a trade publication or the international shopping center convention," he said.
"... When you go to one of those shows and obtain a booth, you pretty much have some projects in mind that you're basically advertising. I think if there's a way to help, that would help not only the downtown but the city in general."
DDA Executive Director Susan Pollay said Wednesday's meeting came in response to an idea floated recently by representatives of the four downtown merchant associations suggesting the DDA take on a new role as a retail recruiter for downtown.
Pollay said it seemed evident after hearing from Shaffran and Giraud that commercial brokers and building owners generally always have a long line of businesses waiting for ground-floor space openings in downtown Ann Arbor.
"It's not like there's a tremendous amount of vacancy downtown today," Shaffran said. "You still see vacancies just simply out of attrition, fruition, timing."
Giraud said he pays close attention to the South University, State Street and East Liberty areas of the downtown and there's a healthy demand for retail space.
"When we don't have vacancies, I get calls probably once every two weeks from a broker or from a retailer who wants a place on South U. And every once in a while there's a turnover and something happens and those get filled," he said.
"I can't remember ever having had a lag time of filling a retail first-floor vacancy on South U, State or East Liberty," he added.
Susan Pollay
"That's probably a dynamite location for something," he said, acknowledging it'll probably stay a restaurant. "My vote would be they'll have somebody in there within six months."
Giraud said there's probably already a tenant waiting in line.
"My strong opinion is that the @burger space will be filled almost immediately," he said. "There's been a lot of money spent in that space in infrastructure costs, getting it ready for a restaurant, so somebody can kind of walk in there and save themselves a lot of startup costs."
So what role can the DDA play in bringing retailers to town? Giraud said the DDA could help merely by getting Ann Arbor on the map. Pollay said it also sounds like the DDA could be helpful in assembling more information about downtown.
"The DDA is certainly in a position to really throw a lot of ammunition at a lot of different things," Shaffran said. "More importantly, whether it's retail or office, they have an opportunity with some very large pieces of property that they, through the city, own that they could help develop."
The City Council recently directed the DDA to facilitate a master planning and implementation process for the future development of city-owned properties within a portion of the downtown. That includes considering uses and eventually issuing requests for proposals for four surface parking lots: the Library Lot, the Y Lot, the Palio Lot and the Kline's Lot on South Ashley Street.
A public process is expected to begin later this fall.
Pollay said both the Y Lot and Library Lot along South Fifth Avenue are prime locations that could provide 35,000 square feet of space per floor in a future building. She said the downtown would benefit tremendously from having potentially hundreds of more workers at those spots.
Giraud talked about attracting large corporate tenants.
"Ann Arbor's a great town and there are people who would love to be down here, but there are people who have left the downtown because they couldn't get the size they needed on one floor," he said. "My opinion is that if we had some larger floor plate office space downtown, we could attract some tenants that we can't get downtown. Obviously, they'd have to have parking and all of the things that go with that."
Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's e-mail newsletters.
Comments
debling
Thu, Jun 30, 2011 : 7:17 p.m.
Tax payers should never have to "pay" businesses to locate in their communities. End all subsidies and end the practice of socializing costs and privatizing profits. Let's encourage businesses to the area by making sure red tape and regulations do not encumber them, but for heavens sake, stop the tax breaks.
skonigsb
Thu, Jun 30, 2011 : 7:05 p.m.
What company wants to bring their business and their employees to a location that can't offer adequate fire and police protection?? I say that support of infrastucture will bring business better than any other incentives.
81wolverine
Thu, Jun 30, 2011 : 6 p.m.
Retail rental rates in Ann Arbor are simply too high for most stores to be profitable enough - the exception being probably jewelers who have a very high sales per square foot. Unless this issue is resolved and more parking found, the DDA offering incentives would be a complete waste of time. Also, it's going to be very hard to bring general retailing back to downtown now that it's largely gone. You need a "critical mass" of retailers in an area to attract general shopping traffic. Or, a very large magnet store of some sort. Otherwise, the only traffic you'll get downtown will be people going to the restaurants. And often times, they aren't interested in sticking around to shop after eating a big meal. Whereas if you have enough stores concentrated in an area that will attract actual shoppers willing to spend money, it benefits all the stores. It's hard to do this with just a couple retail stores down there.
sellers
Thu, Jun 30, 2011 : 5:28 p.m.
Rather than creating incentives, why not create services to make it easier to come downtown. For example - Offer the service of sizing a space to meet a need free of charge - Offer a welcome kit that offers them options available such as buying parking passes, bus passes, etc - Do recruiting of businesses to come in, such as big box retailers as well as smaller niche stores (why people hate big box stores is so funny - if they are not downtown, then they WILL go to the fringe of the City because - well the needs of the people demand it, so why not embrace it and let the traffic it creates promote growth and sustainability) I think the value of having the DDA doing all the leg work to find a space, start the negotiations with the realtor and seller, and make the process 'easy' for them would go further than any raw discounts.
KMHall
Thu, Jun 30, 2011 : 5:09 p.m.
Cutting deals with specific retailers doesn't seem sound in the long term. Improve the business atmosphere, whatever that requires, and let the shoppers determine who succeeds. Unique, high-quality, desirable merchandise would make AA even more of a destination. High quality is not necessarily high priced.
Stephen Landes
Thu, Jun 30, 2011 : 2:30 p.m.
If we haven't learned the lesson of providing incentives to attract business by now in Michigan then we will never learn it. We cannot "buy" businesses from outside to come here. Business will come here when they believe this is the right place to do business. In order to give business people that understanding we have to FIRST take care of the business people we already have. Speak to them to find out what is being done right and wrong in Ann Arbor in general and within the DDA area of responsibility specifically. THEN act on what they tell us whether it be different parking rules, need for police street patrols, better/different inspections (building, food, etc), ease of getting permits, etc. ONE WE HAVE A SATISFIED LOCAL BUSINESS GROUP then they will market the area themselves through their contacts, business arrangements, orders, etc. We cannot market a product that is not satisfactory to the businesses already here. From what I read in this article the DDA seems like just another bureaucracy trying to make itself seem important while ignoring the people already here who are their true reason for existence. I'll bet that, if polled, local business people would give the DDA a failing grade for their service to existing business people.
belboz
Thu, Jun 30, 2011 : 2:08 p.m.
Finally, the DDA and I are on the same page.... We both have no idea what its role is.
Craig Lounsbury
Thu, Jun 30, 2011 : 3:30 p.m.
well played
xmo
Thu, Jun 30, 2011 : 1:43 p.m.
You do not need incentives if the business environment is business friendly. What really needs to happen with the DDA is for them to protect the businesses against the City Council members who are not business friendly. (excessive paper work, higher taxes, more city "GREEN" laws, zoning rules, etc!) 1) lower parking rates and get "Happier Parking Enforcement Officers" 2) build more parking structures and create more parking space 3) promote Downtown Ann Arbor's existing businesses 4) Actively seek businesses to come to Ann Arbor's Downtown
a2cents
Fri, Jul 1, 2011 : 1:47 p.m.
Parking enforcement folks have to be tough to deal with the self-possessed, belligerent clientele they deal with day in and day out.
Galileo2000
Thu, Jun 30, 2011 : 3:12 p.m.
I just drove to A2 from Ypsilanti and first I had to grab a bunch of quarters and then, thankfully knowing the streets pretty well, I was able to get downtown ten minutes after leaving I-94, which is better than most. Even with quarters at the ready parking was hard to find. Add in some one-way streets and it is just tiring as a customer. Then add in high taxes, high rents, and a fickle student population, plus the spreadout nature of A2 ... a great university town but a tough town to come shop at. Plus one wonders how safe Ann Arbor really is, especially in the parking structures.
Atticus F.
Thu, Jun 30, 2011 : 1:37 p.m.
The problem is that rent is too high in the area, and there is a constant stream of people who after seeing a coupkle success stories, are willing to risk their life's savings because they believe their brain child will be the next big thing. It's mostly the property owners that get rich, while some poor fool loses their life's savings.
Galileo2000
Thu, Jun 30, 2011 : 1:26 p.m.
Just come to Ypsilanti. We are easy to get to, plenty of free parking, some wonderful stores in both Downtown and Depot Town. Add to that eating at Beezy's, Haabs, Aubrees, Sidetracks or the Tower Inn and above all, a community of really good people. New stores and restaurants are opening too. We have room for a few more with much lower rents than A2. Ypsi is the new cool place to visit, to shop, to have a business ... it is just easy!!!
Think!
Thu, Jun 30, 2011 : 3:07 p.m.
Precisely what I was going to say. Please do come to Ypsilanti. Fun and funky retail, great food, easy parking, and some of the nicest people I have met in a long time.
Veracity
Thu, Jun 30, 2011 : 1:15 p.m.
The only incentive that the DDA can extend to "recruit" retailers to lease vacant commercial property is by decreasing the cost of doing business by inducing a lower leasing rate. This can be accomplished by reducing the property tax that the lessor has to pay. Of course, the DDA will also be reducing its own revenue by providing such tax forbearance. With the DDA budget facing insolvency as it is, further efforts that will harm its revenue stream would be reckless and inconceivable.
SonnyDog09
Thu, Jun 30, 2011 : 12:57 p.m.
Rather than picking winners and losers, the DDA should work with the city to reduce the cost of doing business in downtown for *all* businesses.
braggslaw
Thu, Jun 30, 2011 : 2:43 p.m.
Amen
E
Thu, Jun 30, 2011 : 12:41 p.m.
Perhaps the Chamber of Commerce should have been at the table. I believe a major part of the Chambers' role is to recruit business to the area.
Carole
Thu, Jun 30, 2011 : 12:20 p.m.
What they need to do is provide free parking so folks can come downtown and enjoy the many marvelous stores and restaurants that are already there. I just recently returned from the Lake Michigan shore visiting two cities and neither of them charged for parking. In fact, boasted the availability of free parking. And, if DDA was dissolved, the funds that support an organization that is doing "work" that the city fathers should be doing could return to the city's coffers.
bob elton
Thu, Jun 30, 2011 : 11:54 a.m.
If the DDA was really serious about promoting downtown, one thing they could do, right now, right away, is eliminate the practice of issuing tickets to people parked inside parking structures. The practices of using hidden and obscure signs to entrap people into parking illegally is something that could be ended in an hour, if the DDA chose to do so. Bob Elton
Mike
Thu, Jun 30, 2011 : 11:25 a.m.
Who cares about downtown Ann Arbor? Don't get me wrong I like the atmosphere of going down on Main Street. First I have to deal with finding a parking spot and then if I find some interesting places to shop and visit at I get ticket for overstaying my $1.00/hr parking fee. There is no parking fees in Dexter, Brighton, or Saline so I go there, spend my money and enjoy my days or evenings and don't have to deal with getting a "discount" on my ticket by hurrying to pay it the next day. Ann Arbor is very efficient at enforcing parking violations and very efficient at dis-incentivizing people to go downtown.
Craig Lounsbury
Thu, Jun 30, 2011 : 12:49 p.m.
You don't say where you live, but for folks who live in Ann Arbor driving to Dexter, Saline, or Brighton to avoid $1 an hour to park is not cost efficient. Factoring in your time, wear and tear on your vehicle, and cost of fuel the $1 an hour is actually cheap.
jhammer
Thu, Jun 30, 2011 : 11:23 a.m.
Seems to me the only issue here is that the DDA is still searching for an identity.
Linda Diane Feldt
Thu, Jun 30, 2011 : 10:46 a.m.
I certainly hope that the DDA is primarily talking to city planners, not just developers and real estate professionals. The area of expertise is far different. The latter being involved in buying and selling, while city planners have been trained in how to create and sustain a viable downtown. Of course a Realtor would love to have the DDA make their job easier. I just think there is a more balanced interest and motivation from people who are not directly profiting from their own advice. Realtors are critical players and informants, and they can be visionaries but their unique perspective is different from those charged with the long term and holistic view. But really, the article makes is sound like this is a new thought for the DDA. That can't really be true, can it?
Linda Peck
Thu, Jun 30, 2011 : 10:45 a.m.
I know of businesses who have left simply because of landowners who steeply raise the rents on these store fronts. Property taxes are out of sight, too, driving the rents up. I think the City of Ann Arbor needs to review the property tax situation, and I would like to see a review for the whole city. I don't like government mixed up in business, but property taxes are this necessary link. It seems the taxing is too high for some and not high enough for others.
Craig Lounsbury
Thu, Jun 30, 2011 : 10:43 a.m.
Who better than me to determine who the "right tenants" are? If your a business owner who wants to make my "right tenants" list simply bring me a brown paper bag filled with non-sequential unmarked....
yohan
Thu, Jun 30, 2011 : 10:34 a.m.
No, No, No! Let the free market determine who stays and who goes and what takes their place. Just another power grab by the DDA. Many of the DDA members are downtown business owners. What is to keep them from using this "recruiting" tool to eliminate competition?
cette
Thu, Jun 30, 2011 : 10:30 a.m.
Honestly, they raise parking, they run stupid big projects that tie up traffic, they squander and squeeze, and now they want to run incentives? This crowd over micromanages and blows it. Yes, I have heard how they have saved parking structures from decrepitude, but that could have been handled by a competent city employee. Big deal.