Ownership of downtown Ann Arbor's former Borders property shifts
The future of the former Borders flagship store property in downtown Ann Arbor now rests in the hands of a company partly owned by a family trust after the parties that previously controlled the site resolved their legal dispute.
Malcolm Properties LLC reached a settlement with publicly traded Farmington Hills-based Agree Realty Corp. to assume ownership of the entire space formerly leased by Borders Group Inc. for its flagship store, AnnArbor.com confirmed today.
Downtown Ann Arbor's former Borders property is now fully owned by a family trust.
Melanie Maxwell | AnnArbor.com
When Borders filed for Chapter 11 bankruptcy in February 2011 and subsequently announced its liquidation plans in July, Agree's former Borders property holdings slipped into financial disarray.
The company confirmed in a new filing with the U.S. Securities and Exchange Commission that it had "entered into a settlement agreement that provided for the termination of the ground lease" on the property at the corner of Liberty and Maynard streets and "conveyed the retail portion of the property owned by the company" to Malcolm. Agree retained an interest in the attached office space that was once used by Borders as its headquarters.
John Fingerle, owner of Fingerle Lumber and manager of Malcolm Properties, confirmed that Malcolm Properties struck a deal with Agree that gives it full ownership of the retail property. Malcolm has a number of owners, including several trusts and individuals.
"We are currently discussing the future of the site with several parties that are interested in it," Fingerle said, declining to reveal details because it's "a little early in the process at this point."
A real estate agent who was marketing the site for Agree, Michael Lippitt of Landmark, confirmed that he's no longer involved in the property's repositioning.
The settlement between Agree and Malcolm Properties comes after Malcolm filed documents last fall with the 15th District Court to proceed with Agree's eviction.
The resolution of the dispute clears the way for Malcolm to find a tenant for the space, which is considered a critical anchor of downtown Ann Arbor and a key indicator of its retail sector's vitality.
Local store owners have said the closure of the downtown Borders store in September has had a significant impact on foot traffic and the image of the retail scene.
The downtown store — which was located steps away from Borders' original store on South State Street — is empty, with a few bare shelves lingering as a reminder of the property's past. Vandals have sprayed graffiti on the store's entrance and on the brick on the easternmost alley portion of the building.
Attorneys for Agree Realty and Malcolm Properties were not available for comment, and an Agree Realty executive did not respond to a request seeking comment.
Malcolm Properties LLC is the legacy of a family trust that originally leased the former Jacobson's store to Borders in the mid-1990s. The trust — then called the Clara I. Malcolm and J. Karl Malcolm Testamentary Trust, according to documents reviewed by AnnArbor.com — represented about 10 different family members at the time.
Borders was paying Agree $24,543 a month when it filed for bankruptcy protection. That rate was expected to rise several times over the next 15 years, reaching $32,666 by 2025.
Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.
Comments
SuperiorMother
Tue, Mar 6, 2012 : 3:57 p.m.
I would absolutely love to see Schuler Books, a small Michigan bookstore chain (with stores in the Lansing and Grand Rapids areas), move into that location.
rsa221
Tue, Mar 6, 2012 : 3:14 p.m.
A fitness center in some part of it, upstairs or downstairs, would be awesome!
Joe_Citizen
Tue, Mar 6, 2012 : 3:13 p.m.
Cabella's mini store. Asian foods market. Flea Market, or mini mall, type of thing. Kroger. Aldi. A store that caters to low income, and has something that is not on every block Down Town, and the students can afford. I lived there for several years when I went to school, and the one thing needed most is an real raw foods store that is affordable to students.
jns131
Tue, Mar 6, 2012 : 6:45 p.m.
Cabella's? You are kidding right? O wait, there is that occupy Liberty street, they might actually make some money there. Not.
Joe_Citizen
Tue, Mar 6, 2012 : 2:49 p.m.
I say make it a Flea Market, and divide up spaces inside the building like Karry Town. This will give A2 citizens, and UM students many different things to go there. Down Town has need a real grocery store too, with low cost raw foods for sale, So Kroger's should take it over. Well something like that perhaps.
Goofus
Tue, Mar 6, 2012 : 2:08 p.m.
Looking at recent trends to predict how this will go: Think of the most generic, corporate, and over-saturated food or convenience-based business you can think of. that caters mainly to college students.....such as a sub shop, 24 hr convenience store, or a burger/pizza place..and that's probably what will go in that space.
Frains
Tue, Mar 6, 2012 : 9:02 a.m.
Jacobsen's 2.0 -- retail below, hotel above - unwinding from crazy, dysfunctional parentage - all-in-all, a bit like Lindsay Lohan.
Tru2Blu76
Tue, Mar 6, 2012 : 6:07 a.m.
I think AnnArbor.com should take over this space and rename their operation: The Ann Arbor Daily Planet. :-) Or - Ri¢k $nyder should buy it and move Michigan's Governor's Mansion in there. :-) Or - Convert it to a downtown cineplex: put the out-lyer cineplexes out of business. (I hate them all.) Or - someone do a really intelligent analysis of what's needed most in a space & location like this one. I'd bet they'd come up with some surprising answers.
grimmk
Tue, Mar 6, 2012 : 5:19 a.m.
Just take it Google. Just take it.
jns131
Tue, Mar 6, 2012 : 2:19 a.m.
Right now the used book store as I see it, has full rights to Liberty street. Simply put? There are no bookstores at all in this quadrant. Borders is now gone and so will be that UM bookstore once they close their doors. That space could be divided into parcels and lent out. I have no idea what will go there but I really do not want another drugstore to go in. Something else that will lure the buyer. Especially at the holidays. What a mess. So, what is happening with the Borders at Arborland?
whatsupwithMI
Tue, Mar 6, 2012 : 1:40 a.m.
Services industry at a high price, all the way. What else can foot the bill in a podunk section of the rustbelt, and fill the needs of idle, rich college kids, in a town with 40k dorm-dwelling such kids. And hey, Santorum-supporters need someplace to work, too!
sellers
Tue, Mar 6, 2012 : 1:25 a.m.
Forgive me for going chain - but how about an anchor, like what large strip malls do? Something to get food traffic back and let people walk by the boutique and niche shops. Something to draw foot traffic come holiday season away from the outskirts and mega-malls. What about a 2 story Dillard's with attached parking garage entrance? Or An Apple Store in 1/2 of the the building, and a signature storefront for the upcoming Current Motors in the other 1/2.
jns131
Tue, Mar 6, 2012 : 2:21 a.m.
Kresage was also in that now defunct UM bookstore, remember? Going to be a lot of empty buildings come summer time.
sellers
Tue, Mar 6, 2012 : 1:26 a.m.
Let's remember, chains were in Ann Arbor, which Jacobsons being in that space before, and Kresge in the now B.D.'s.
psaume23
Tue, Mar 6, 2012 : 12:48 a.m.
We need a bookstore in that spot again. Not another restaurant and not a food court.
Marshall Applewhite
Tue, Mar 6, 2012 : 2:28 a.m.
Well, you're more than welcome to purchase the property yourself, and turn it into as bookstore........
jns131
Tue, Mar 6, 2012 : 2:22 a.m.
There is a great used book store a half block from there. I think they will a boon in biz again.
Sallyxyz
Tue, Mar 6, 2012 : 12:21 a.m.
Another restaurant and bar? Just what AA needs. More of the same. They are the only ones who can afford the high rents, so look for a chain restaurant (or restaurants) coming to the former Border's property soon, just in time for Art Fair, of course!
A2comments
Mon, Mar 5, 2012 : 8:51 p.m.
One would hope that given that the managing partner of the trust is a local resident, they would balance the good of the community with maximizing their financial gain and get tenants that blend best with the local community. While they need to maximize their return on investment, I suspect we won't see a tenants that the majority of the community doesn't want.
Roaring_Chicken
Mon, Mar 5, 2012 : 8:45 p.m.
Dream Date: Eye of Agamotto re-opens in the space, along with Pinball Pete's AND Arbor Brewing Company.
alterego
Mon, Mar 5, 2012 : 9:21 p.m.
How about Mickey Rat's and Drake's Sandwich Shop?
15crown00
Mon, Mar 5, 2012 : 8:29 p.m.
the only real question is who gets it next?
jhammer
Mon, Mar 5, 2012 : 8:11 p.m.
Was Borders only paying $7/ square foot? Can't be. Were there other tenants in this building?
jhammer
Mon, Mar 5, 2012 : 9:05 p.m.
Thanks Randy. That makes more sense.
Randy Parrish
Mon, Mar 5, 2012 : 8:56 p.m.
Almost half the space was empty and for rent when Borders moved it's corp offices to State Street past Ellsworth. The U rented part of it for some time.
John of Saline
Mon, Mar 5, 2012 : 8:07 p.m.
It's really too bad there wasn't some effort put forward to keep this one store open, presumably as a new, drastically smaller company.
sigdiamond
Mon, Mar 5, 2012 : 7:29 p.m.
So...Walgreens or CVS?
jns131
Tue, Mar 6, 2012 : 2:23 a.m.
Picture? What I find ironic about your comment is that Wal Greens put a mom and pop drugstore into bankruptcy not too long ago. Interesting to think they too could go into chapter 11? Food for thought on that one.
puncturedtime
Mon, Mar 5, 2012 : 9:57 p.m.
Nathan, Why propagate such a silly idea further by reposting the original gossip-laden "article"? As a former Borders' employee, it's become a long running joke between us that Walgreens would consider filling this space just to run it into another bankruptcy...glad we can always rely on aa.com for a good joke!
Nathan Bomey
Mon, Mar 5, 2012 : 7:36 p.m.
@sigdiamond, We haven't heard anything that we can report regarding prospective tenants at the former Borders site. However, here's a previous story about whether Walgreens is pursuing a downtown store. <a href="http://www.annarbor.com/business-review/walgreens-snaps-up-former-borders-store-in-birmingham-what-about-ann-arbor/">http://www.annarbor.com/business-review/walgreens-snaps-up-former-borders-store-in-birmingham-what-about-ann-arbor/</a> Interestingly, it's possible that this latest development will make it more difficult for Walgreens to lease the former Borders store. Agree Realty leases several properties to Walgreens and presumably would have considered doing the same with the downtown space. But with Agree out of the picture, that relationship is no longer relevant. We'll be sure to follow the story as it develops.