Former Michigan Book & Supply building sold for $5.8 million
A proposal submitted to Ann Arbor's Historic District Commission in November requested the installation of Walgreens signs at 317 S. State St.
City of Ann Arbor
A Farmington Hills-based real estate company finalized a deal this week to purchase a high-profile building on the corner of South State and North University in downtown Ann Arbor, paving the way for a redevelopment.
Agree Realty Corp. acquired the 18,000-square-foot former Michigan Book & Supply building at 317 S. State St. for $5.8 million, the company announced on Thursday. Agree has leased the building to a retail pharmacy store, the company said in a press release.
In an interview with AnnArbor.com, Agree Realty President Joey Agree would not confirm the tenant, but in November, the company submitted an application to install Walgreens signs on the building.
Michigan Book & Supply closed last year as part of its parent company's bankruptcy protection filing.
File photo
"We are extremely pleased to announce the acquisition and redevelopment of 317 South State Street," Joey Agree said in a statement. "This is an exciting project, that once complete, will be a jewel in our portfolio of net lease assets and a fixture on the university campus for many years."
Agree Realty submitted the application to install Walgreens signs on the historic two-story building — which has been vacant since Michigan Book & Supply closed in early 2012 — to Ann Arbor’s Historic District Commission in November. Located just steps from the University of Michigan’s Diag, the building is one of the most prominent in downtown Ann Arbor.
“The former bookstore located at S. State St. and University is proposed to be renovated into a Walgreens store,” the application said. “The existing building facade is to remain along with the interior structural elements. New signage is being proposed at this time.”
Joey Agree said the building at 317 S. State St. is pre-leased under a 20-year agreement to “the industry leader in the retail pharmacy sector.” The redevelopment is expected to be completed by the second quarter of 2014, he said.
The building at 317 S. State St., as it looked in the early 1970s when it was an S.S. Kresge store.
Ann Arbor District Library
"We're not able, because of the confidentiality with our retail partner, to disclose the tenant," he added.
Agree Realty has an established relationship with Walgreens — nationwide, its top three tenants are Walgreens, Kmart and CVS. As of Nov. 2, 32 percent of the company’s annualized base rent came from Walgreen Co., according to a quarterly filing with the U.S. Securities and Exchange Commission.
Agree controls the Ann Arbor property on the corner of Jackson and Maple roads where a Walgreens was constructed in 2010.
The company also owned the former Borders headquarters on Phoenix Drive and a portion of the former flagship Borders store downtown, but lost or sold those properties after Borders liquidated last year.
"We have an affinity for Ann Arbor," Joey Agree said. "We think it's a great place to continue to invest capital. We have a long history in the city of Ann Arbor."
Most recently, Texas-based Hogarth Management, an entity controlled by the Borders family, owned the building on South State Street. Ann Arbor’s First Martin Corporation managed the property.
The building — which was once occupied by discount variety store S.S. Kresge — has an assessed value of $1,031,500. It has 12,000 square feet on two floors and a 6,000-square-foot basement that Michigan Book & Supply used for textbook sales.
Michigan Book & Supply’s lease began on July 1, 1989, and the store closed this year when its bankrupt parent company, Nebraska Book Co., filed for bankruptcy protection and closed 40 locations.
Just down the street at 209-211 S. State St., CVS Pharmacy opened a store in 2011 after it completed an $8 million project that preserved the historic facade, but demolished two houses behind it.
Joey Agree said the goal is to have plans submitted to the city of Ann Arbor in the "near term."
Lizzy Alfs is a business reporter for AnnArbor.com. Reach her at 734-623-2584 or email her at lizzyalfs@annarbor.com. Follow her on Twitter at http://twitter.com/lizzyalfs.
Comments
Milton Shift
Sat, Jan 5, 2013 : 1:51 a.m.
One block from CVS. Did we need another? What we need is a downtown grocery store...
DJBudSonic
Fri, Jan 4, 2013 : 11:30 p.m.
Not likely, but it would be cool if this Walgreens had just a few of the things the Kresge had, like a lunch counter, and a pet department with birds and fish....
KMHall
Fri, Jan 4, 2013 : 12:43 p.m.
On-line art supplies made the store obsolete. Students will buy tons of stuff at Walgreens as they do at CVS. Kresge sold a variety of little every-day things. No designer clothes or boutique coffee. Fresh fruit, vegetables, and healthy prepared foods would be wonderful downtown but apparently won't pay the rent on that corner.
Tru2Blu76
Fri, Jan 4, 2013 : 6:50 a.m.
All those pooh-poohing Walgreens in a downtown location might want to think over: there are no pharmacies downtown (that I know of and I live there). Also regarding selling of cigarettes: a look at Walgreens webpage shows they also do a lot of advertising for Nicorette ® products, etc. So tell us, "elite thinkers" of Ann Arbor: would you like to invest in another "high end" Jacobsons or Borders Books operation downtown?? Ha-ha!! You all did such a fine job of providing PATRONAGE to these former "chic" businesses, so you ought to be chomping at the bit to put some serious investment money where your opinion is. What could go wrong?! ;-)
Milton Shift
Sat, Jan 5, 2013 : 1:53 a.m.
There's also a local pharmacy just a few blocks from the Shapiro Library.
ThinkingOne
Fri, Jan 4, 2013 : 4:39 p.m.
Tru I am curious where you get your knowledge of the amount of business that Border's and Jacobson's did while they were in Ann Arbor The things that I feel the general public knows are: 1. both are part of chains 2. the chains went bankrupt 3. the Ann Arbor stores closed 4. in Border's case, we know they did enough business initially to become a national chain in the first place Please enlighten up on your knowledge that ...'You all did such a fine job of providing PATRONAGE to these former "chic" businesses'... As far as I and the general public know now, these Ann Arbor locations could have been doing equally as lousy as all the other locations OR they could have been shining jewels in each corporations' portfolio of stores. If you know details on how these individual locations fared, I would be interested to know. To be honest, if you don't know for a fact that these 2 stores were failing in their Ann Arbor location, your whole comment becomes just a mite snobbish.
HB11
Fri, Jan 4, 2013 : 1:05 p.m.
Did you miss the big CVS just up the street? They even have 2 floors.
Tesla
Fri, Jan 4, 2013 : 2:54 a.m.
I miss Kresges.
mike gatti
Fri, Jan 4, 2013 : 2:05 a.m.
Shoulda bought more books and what not.
Esch Park
Fri, Jan 4, 2013 : 12:25 a.m.
B O R I N G.. Can't these guts do better than this?
HB11
Thu, Jan 3, 2013 : 10:46 p.m.
This reminds me of the Mark Knopfler song "Boom, like that." It's about McDonald's founder Ray Kroc and fast-food business competition. One lyric says "...they open up a new place flippin' meat, so I do too right across the street..." Just substitute CVS and Walgreens for Mickey D's and the competition.
TommyJ
Thu, Jan 3, 2013 : 9:19 p.m.
How many Walgreens, CVS and Rite Aide stores doe you need in the world? Is there really such a demand for plastic seasonal items, cheap makeup and prescriptions? How do these places stay in business? I can't stand these stores and refuse to shop there unless I have to have a rx filled. What is the deal? And how can a campus support 2 drugs stores like that? Ugh. At least it's not another pizza place.
JRW
Fri, Jan 4, 2013 : 1:05 a.m.
How do they stay in business? They have HUGE profit margins on the drugs and cheap plastic crud that they sell, most of which is made in China. Plus they pay their part-time "associates" minimum wage with no benefits. Big corporate profits. Can a campus support all these chains and 2 drug stores? Probably not. But the developers get fatter wallets even if Walgreens goes down eventually. That's what this is all about. $$$$$$$
bluetonguedlizard
Thu, Jan 3, 2013 : 9:45 p.m.
You should try Dexter Pharmacy in the Kmart/plum complex on Stadium if you want to fill your RX at a locally owned business.
Ralph
Thu, Jan 3, 2013 : 9:05 p.m.
The geography of nowhere!
roadsidedinerlover
Thu, Jan 3, 2013 : 8:42 p.m.
Too bad...Trader Joe's should have snapped this building up!! Say goodbye to all the uniqueness of Ann Arbor....Rest in peace....White Market, Blimpy's, etc etc...
fjord
Fri, Jan 4, 2013 : 2:27 p.m.
Way too small for a Trader Joe's. They'd never go for it.
bluetonguedlizard
Thu, Jan 3, 2013 : 9:43 p.m.
How would a Trader Joes fit with your desire for uniqueness???? Trader Joes is about as mainstream chain store as you can get.
jns131
Thu, Jan 3, 2013 : 9:02 p.m.
Actually not really. With all the students there already? This place will be hoping along. There are two car garages and let me tell you, walking by there? I got dinner already planned. Trader Joe's? I am all for it.
Soft Paw
Thu, Jan 3, 2013 : 8:53 p.m.
Trader Joe's to thrive needs parking like a plant needs sunlight. Parking at N. U. & State is about as bad as it gets.
Tizz
Thu, Jan 3, 2013 : 8:32 p.m.
OMG, can it get any worse? Marvelous bookstore becomes a Walgreens? ack!!! Where to buy art supplies now?
KMHall
Fri, Jan 4, 2013 : 12:37 p.m.
Artists and art students obviously buy on line.
a2citizen
Thu, Jan 3, 2013 : 8 p.m.
Look at it as another convenient location to purchase the birth control provided by federal law.
Nicholas Urfe
Thu, Jan 3, 2013 : 7:41 p.m.
In the next day or so, I expect the building to get burgled by someone who thinks the $5.8 million is in a cash register just inside the entrance.
oyxclean
Thu, Jan 3, 2013 : 7:27 p.m.
This would have been a perfect spot for an Apple store. Oh well...
Arieswoman
Thu, Jan 3, 2013 : 6:37 p.m.
Well folks this is Ann Arbor. Home of a gas station and a drug store on every corner!
zanzerbar
Thu, Jan 3, 2013 : 8:18 p.m.
Actually there were gas stations on every corner Forest/ S.U., Liberty/Division, S.U./Church, S.State /Packard, Hill/Packard(S./E., S./W,N./E ) and I'm sure A few more locations tru the early 70,s. Many of those building are still in use for other business, i.e Pizza Parlors etc.
treetowncartel
Thu, Jan 3, 2013 : 7:11 p.m.
Actually three if you count Madison, the other two are Main/Miller andMain/William
AlmostPhD
Thu, Jan 3, 2013 : 6:47 p.m.
There's only a single gas station in the downtown area, two if the one way down on Madison counts.
jen777
Thu, Jan 3, 2013 : 6:37 p.m.
years ago i had a great wakgreens but the ines i ave been in lately offer very little that you cannot get at the cvs alrady on state st. unfortunately rents and internet shopping maje it diffucult for independent stores to srvive -hence the chains
GoNavy
Thu, Jan 3, 2013 : 10:02 p.m.
We can only imagine what the comment that was removed said.
GoNavy
Thu, Jan 3, 2013 : 6:31 p.m.
I think they should build $$$4k per bed uber-luxury suites for the "best of the best*" Michigan is looking to attract. *As measured by financial means.
Pam Wilson
Thu, Jan 3, 2013 : 6:31 p.m.
A Walgreen's a block away from CVS? How about a Whole Foods or another grocery store for all of the students that live in off-campus housing close by? It's hard to believe that this purchase doesn't have to be approved by the DTA. Very disappointed, to say the least.
AlmostPhD
Thu, Jan 3, 2013 : 6:29 p.m.
You're all poo-pooing this (well, most of you anyway), but this is the sort of store where students might actually shop. If you liked Book & Supply there so much, why didn't you pump a bunch more of your money into it rather than just appreciating its presence there for the sole reason that it's what was there when you moved to town or grew up or arrived at college? Let's not forget that Book & Supply went out of business precisely because it was itself owned by a national chain.
johnnya2
Fri, Jan 4, 2013 : 1:28 a.m.
@A2comments, what does that have to do with anything? National chains fail, but not nearly at the rate of local independents. Of course, if you have a concept that will bring in enough revenue to justify buying the building , i am sure they would have allowed you to buy it too.
A2comments
Thu, Jan 3, 2013 : 8:50 p.m.
Book and Supply went out of business because the company that owns them (and Ulrich's and Ned's and Campus Book & Supply and Mike's), Nebraska Book Company, can't compete in today's market. It had nothing to do with "precisely because it was itself owned by a national chain". Their prices are always high, totally non-competitive. They declared bankruptcy in mid 2011 and came out in mid 2012 with less debt. Yet for the fiscal year ended March 31, 2009, they declared "record" results. They did so again the following year. A year later bankruptcy. If you review the history, you'll see they bought up competitors (hence all the local stores they owned) and piled on the debt, apparently clueless that the market was changing. Then, well into the recession, with acquisitions stopped, the growth ended and everyone could see how ugly the resulting company was. Incompetent management doesn't require a national company...
AlmostPhD
Thu, Jan 3, 2013 : 7:46 p.m.
Certainly I'm not saying that students will only shop at a retail pharmacy to the exclusion of whatever else will be put there, but a Walgreens sells a lot of things a student might need to buy. When I was an undergrad on Central Campus not terribly long ago, of course before 7-11 and CVS, it was hard to actually get any sort of food items locally without having to get on a bus or in a car for a fifteen minute drive. Having a place to buy small food items or things like bandages or batteries would have been a Godsend for us. I'm simply saying a student will get more use out of a pharmacy than the soda fountain or one more small-time barber shop or whatever quintessential small-town shoppes of yore might be there. Of course as a student, I would have much rather had a grocery to buy a vegetable or some other food item without a horrible mark-up, but I guess you take what you can get. And no, I don't like that it's going to be another chain store, but I'm not myself prepared to open anything there. We have to remember that, above all, Ann Arbor is a place to live in for the people that live there, not simply for taking the occasional quiet stroll through campus every couple months and wax regrettably about how everything's different than when you (the generic 'you') used to go to college so many decades ago. And it seems, as far as the information available in these comments, that the building's only ever been occupied by chain retail stores, so I don't see it as an enormous shift from the status quo.
dancinginmysoul
Thu, Jan 3, 2013 : 7:28 p.m.
This is a retail pharmacy. If you're making the argument students will only shop at retail pharmacy's I must ask you to cite your source. There are lots of local stores where UofM students shop. No one's comments are lamenting the loss of Book & Supply, but the addition of a retail pharmacy to a unique space.
LXIX
Thu, Jan 3, 2013 : 6:17 p.m.
Border's family controls Hogarth which was the most recent owner of the S. State property.. Agree bought the property assessed at $1M for $5.8M (nearly 3 times the $2M market value?) Agree owned Borders HQ and part of Liberty which were then sold or lost.. . 1. If Agree is so financially secure how could they "lose" property? Was it their property or Borders? 2. Why would Agree give Borders 3x the market value to host a Walgreens store? 3. What is the relationship between Borders and Agree?
LXIX
Thu, Jan 3, 2013 : 9:29 p.m.
@Lizzy Ta. Funny. State Street Corp. owns almost 2% of Agree which now owns part of State Street. Not so funny. Blackrock Inc. owns almost 5% of Agree.
Lizzy Alfs
Thu, Jan 3, 2013 : 7:15 p.m.
P.S.: I hope that helps!
Lizzy Alfs
Thu, Jan 3, 2013 : 7:14 p.m.
@LXIX: --Remember that market values are usually double that of the assessed value. But you're right, the price is very high. Not counting the basement, the sale price is almost $500 per square foot. --We wrote several stories on Agree losing and selling the properties they were leasing to Borders. It wasn't just in Ann Arbor; Borders was one of Agree's largest tenants, top three I believe, until the company liquidated. Agree then shed many of those properties. Here is a story: http://www.annarbor.com/business-review/landlord-defaults-on-loans-could-lose-borders-headquarters-building-downtown-store/ Agree is a public company, you can check out their financials here: http://finance.yahoo.com/q?s=ADC --In my opinion, Agree would give Borders (Hogarth Management) 3x the market value to host a Walgreens store because it's an attractive, financially sound deal for them. It's a 20-year lease, meaning they are guaranteed rent for the next two decades. --I don't know the exact details on the relationship between Borders (I assume you mean the family) and Agree. But I assume there must be a working relationship there since Agree owned a portion of the former flagship store.
Think!
Thu, Jan 3, 2013 : 6:13 p.m.
Keeping Ann Arbor unique - "We do things different" just like everyone else. Now I have a Walgreens within 2 miles of my home in two different directions. I love variety.
a2citizen
Thu, Jan 3, 2013 : 8:16 p.m.
Big deal. I have two Kroger's, a Whole Foods, a Busch's and a Meijers.
Barzoom
Thu, Jan 3, 2013 : 5:54 p.m.
Ann Arbor was a much nicer place to live in the'60s & '70s.
Boo Radley
Thu, Jan 3, 2013 : 10:40 p.m.
Just about every place was a much nicer place to live in the '60s & '70s. For those of us who grew up during that time anyway.
James Toy
Thu, Jan 3, 2013 : 6:13 p.m.
U-M undergrads couldn't drive in town in the early 60's. I had to prove that I was a graduate student. A police officer was stationed at the State Street curb near Nichols Arcade to ticket jaywalkers. Consternation when a traffic light was installed at State and Hill.
ordmad
Thu, Jan 3, 2013 : 5:50 p.m.
I'm disappointed too, but let's not blame "Ann Arbor" for thi. It's a free country. This building was sold on the open market, money talks and no local money spoke loud enough (if at all). And, by the way, folks seem to forget that one of the largest chain stores was right down the street until not too long ago: Borders. No one seemed to mind that because it was ours. Doesn't mean it wasn't a chain in every lousy sense of the word.
Milton Shift
Sat, Jan 5, 2013 : 1:56 a.m.
Free for whom?
Adoseofrationalthought
Thu, Jan 3, 2013 : 5:49 p.m.
Somehow it has escaped those that have commented that the store USED TO BE A CHAIN! S.S. Kresge was a version of K-Mart. I am not huge for chains either, but a tenant is better than an empty storefront. Ann Arborites need to stop wishing this town was stuck in Amber from the 60's and 70's.
LA
Thu, Jan 3, 2013 : 8:16 p.m.
Haha! Is that a "Fringe" reference? Hope so! Love it!
vitaltoofor
Thu, Jan 3, 2013 : 5:20 p.m.
Don't forget it's right across the street from a 7-11! Now it's easy to get all our Slurpies, prescription pills, blunts and condoms on the same block!
dancinginmysoul
Thu, Jan 3, 2013 : 5:19 p.m.
And Ann Arbor joins the ranks of every other college campus that's sold out to corporate franchise. Having grown up in A2 and attended college in 2 different states, one of the things I loved about A2 was it's uniqueness. Next comes the McDonald's. Sell-Outs. I couldn't be more disappointed with what's going to happen to the building and the area. So much for the "local" push. Shameful.
johnnya2
Fri, Jan 4, 2013 : 1:23 a.m.
yeah because Michigan Book ad Supply was SOOOO very unique as part of a chain of college bookstores? Give me a break, the bookstores slapped a local name on it is all. That is not local. Of course, I do not recall what your bid on the building was.
mady
Thu, Jan 3, 2013 : 11:32 p.m.
i too remember the Maynard McDonald's, in fact it brings to mind one of many memories....I'm sure you recall that this particular McD's had an upstairs. When the fire door was damaged, in violation of every conceivable fire code in the state of Michigan, instead of repairing it as the law required the owner to do, the skinflint owner simply padlocked it. Not Good. some time later, someone saw this padlocked door, and turned it in to the fire marshall. fire marshall promptly paid a visit, was upstairs for maybe 2 minutes, came back downstairs and "asked" to talk to the manager on duty.....they talked for a very short time, with fire marshall doing most of the talking. after fire marshall left, manager was on the phone talking to the district manager essentially telling her that the fire door needs to get fixed. TODAY. District manager was heard arguing w/manager. manager told her ok kelly, you do what you want but the fire marshall's going to be back here tomorrow morning at 9 a.m. and if that door isn't fixed we'll be padlocked at 9:03. this guy ain't playin'. Yep, the door got fixed that same day.....this was the first fast-food place i worked at and this is one of the many memories that stands out!
Boo Radley
Thu, Jan 3, 2013 : 10:37 p.m.
I can't recall people being that disappointed all those years that it was a Kresge store.
Jojo B
Thu, Jan 3, 2013 : 6:22 p.m.
Or the Burger King that lived in the (now ex-Kinkos) basement across from the now-vacant Borders building. Or the Burger King and Taco Bell that lived in the S. University area. I actually wouldn't mind any of those coming back.
dancinginmysoul
Thu, Jan 3, 2013 : 6:21 p.m.
Considering I worked at that McDonald's in high school, yes I remember it.
ArthGuinness
Thu, Jan 3, 2013 : 5:46 p.m.
Heh, perhaps you're not old enough to remember the strange McDonald's that used to be a street over from this location.
PhillyCheeseSteak
Thu, Jan 3, 2013 : 5:10 p.m.
Now maybe their sidewalk(s) will get shoveled.
jns131
Thu, Jan 3, 2013 : 9 p.m.
Actually the city will shovel them since they still have ownership of the sidewalks. But yes, once a nice drugstore opens up it will get shoveled.
JBK
Thu, Jan 3, 2013 : 5:02 p.m.
This is too funny! A day after A2.com ran the story about chain restaurants opening up off of A2-Saline and reading all of the negative comments as it relates to "chain" restaurants,......we get a story a day later about a Walgreens opening up just down the street from CVS. I can't wait to read the backlash!
JRW
Thu, Jan 3, 2013 : 5:02 p.m.
Ann Arbor sinks to a new low. A chain drug store in a historic building in a prominent location. State Street is becoming a strip mall.
Milton Shift
Sat, Jan 5, 2013 : 1:59 a.m.
Yeah, sure, free to do whatever you want, if only you have all the money you don't have. Freedom, my... yeah.
johnnya2
Fri, Jan 4, 2013 : 1:20 a.m.
So a chain drug store is so much worse than a chain bookstore or worse yet an EMPTY store front? You are free to buy any building you want and put up your own business at any time.
jns131
Thu, Jan 3, 2013 : 8:59 p.m.
Anything but another drugstore. A nice buffet restaurant? Perhaps?
f4phantomII
Thu, Jan 3, 2013 : 8:18 p.m.
A historic building that was, historically, what we used to call a, "dime store".
TheInfamousOne
Thu, Jan 3, 2013 : 4:59 p.m.
How disappointing.
say it plain
Thu, Jan 3, 2013 : 4:53 p.m.
a walgreens, ugh. how awfully depressing for ann arbor. truly awfully. do all these new drugstores sell cigarettes or are they prohibited from doing so by the U, given the U's non-smoking campus efforts? Just wondering... how nice for us all that instead of bookstores and art-supply outlets we'll have *both* a Walgreen's *and* a CVS on state street. Makes the American Apparel outlet down the road seem so interesting and upscale by comparison! And I'm sure it adds to the quality of life for all the downtown residents that they can participate in CVS/Walgreen's price wars on chewing gum and cough syrup!
johnnya2
Fri, Jan 4, 2013 : 1:19 a.m.
So a national chain is taking the place of a national chain for a building that was originally part of a national chain is a bad thing to you? As for cigarettes, this property is NOT on UM property. Though if it is written in their lease that they can not sell cigarettes, they can not. I know of a landlord on that same black wills not allow alcohol i the building he owns.
Gorc
Thu, Jan 3, 2013 : 11:56 p.m.
Say it plain - had you made a bid of $5.9 million for the property, you might have been able to select or deny any tenant of your choice.
seldon
Thu, Jan 3, 2013 : 8:08 p.m.
Given that it used to be a Kresge's, this is a historically consistent use for the site.
zanzerbar
Thu, Jan 3, 2013 : 4:46 p.m.
Will Rite Aid now follow in Border's old space? Just asking.
Goofus
Thu, Jan 3, 2013 : 6:19 p.m.
Hush now. We all know that is exactly what will happen.