Walgreens signs 20-year lease to open store on Ann Arbor's South State
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
The publicly traded Farmington Hills-based real estate firm purchased the building on the corner of South State and North University in December for $5.8 million. The deal was finalized nine months after Michigan Book & Supply closed as part of its parent company’s bankruptcy protection filing.
Agree Realty and Walgreens have been mostly silent about plans for the high-profile building at 317 S. State, but Joey Agree told investors on earnings conference calls that it’s being transformed into a “campus flagship” Walgreens store.
“This existing project is pre-leased to Walgreens under a 20-year agreement and will be Walgreens’ first new campus flagship store in the country,” he said
He said the store is expected to open in the first half of 2014.
Agree Realty has an established relationship with Walgreens — nationwide, its top three tenants are Walgreens, Kmart and CVS. As of April 30, 29 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.
Walgreens signed a 20-year lease agreement for the former Michigan Book & Supply building at 317 S. State.
Lizzy Alfs | AnnArbor.com
Agree controls the Ann Arbor property on the corner of Jackson and Maple roads where a Walgreens was constructed in 2010.
It’s unclear what specific plans are for the “campus flagship” store on South State, and representatives with Walgreens and Agree have not returned multiple requests for comment.
In late March, Birmingham-based Sachse Construction & Development applied for city of Ann Arbor permits that would allow Walgreens to move forward with its interior renovations. Sachse also requested a reoccupation permit for Walgreens to take over the space.
The building has 12,000 square feet on two floors and a 6,000-square-foot basement that Michigan Book & Supply used for textbook sales. Most recently, Texas-based Hogarth Management, an entity controlled by the Borders family, owned the building on South State Street and Ann Arbor’s First Martin Corporation managed the property.
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.
Meanwhile, a major redevelopment of the former flagship Borders store is underway just west of the Michigan Book & Supply building. Five retail and restaurant tenants are expected to fill the first-floor of the vacant building.
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
BhavanaJagat
Fri, May 3, 2013 : 6:17 p.m.
Whole Dude - Whole Health: I am surprised and I feel concerned about the growth of Pharmacy Stores like Walgreens, CVS, and Rite Aid. All of them sell alcohol and tobacco products apart from medical supplies and prescription drugs. The growth of this retail sector reflects upon the status of health and well-being of people. It indicates that the number of consumers of alcohol and tobacco products is constantly increasing and to the same extent more consumers need prescriptions to be filled. Walgreens may sell some grocery items and even if the new store includes a spa, a sushi bar, and fresh flowers, it still represents a trend in declining wellness of the growing segment of our population.
Robert D. Mosley
Fri, May 3, 2013 : 4:58 a.m.
I just hope it is a store like the one in Chicago. If A2 has to have a Walgreens, let it sell sushi, have a mini spa and a wide range of wine selections.
GratefulReb
Thu, May 2, 2013 : 4:50 p.m.
This is great news. A2 needs the taxes. Sure, i would rather have a crate and barrel but Walgreens is fine and it's better than an empty store. On a side note, please take a look at the labels on your clothing before you criticize the big box.
mun
Thu, May 2, 2013 : 3:44 p.m.
For those who are criticizing a chain store coming in instead of a local outfit, I suggest that you buy the building and put in the tennant you want. See if that tennant will stay long enough to pay the rent. Keep in mind that the owner of the property has to pay the property taxes and insurance, tennant or no tennant. See if it is no big deal if the property remains vacant. As much as I would like a local outfit or something more appealing, the reality is the owner of the property has to have a reliable tennant for the long term.
ThinkingOne
Sat, May 4, 2013 : 2:38 a.m.
It's not you mun. It.s everyone that responds to people wishing that something were something else, and they get the response along the lines of 'if you don't buy it then your opinion is meaningless'. I am of the strange notion that having the money to buy something is not a qualification to have an opinion on it.
mun
Thu, May 2, 2013 : 5:53 p.m.
@ThinkingOne, where does it say in my post "people cannot have opinions?"
ThinkingOne
Thu, May 2, 2013 : 5:03 p.m.
So people can't have opinions? Just because there is a little wishful thinking in those opinions shouldn't mean that anyone who has one needs to be dragged through the mud. If the person living next to me painted their house jet black, hung op-art all over it and lit it at night with a black-light; I can't say I don't like it without someone telling me I need to buy it or quit complaining? I am pretty sure the constitution allows me to have my preferences. I am not stopping anybody or even trying to; just expressing an opinion.
Usual Suspect
Thu, May 2, 2013 : 3:52 p.m.
Stop making sense!
Bob Needham
Thu, May 2, 2013 : 2:47 p.m.
So, what do people think will be the impact on the CVS down the street?
Sarah
Thu, May 2, 2013 : 5:24 p.m.
I worked at a CVS that was three storefronts down from a Rite-Aid, that was across the street from a CVS (yes; all three also had pharmacies). It seems that people are pretty brand loyal and will go to the store of preference, as all three of those were VERY busy.
Paul Wiener
Thu, May 2, 2013 : 2:46 p.m.
Yuccchhhhh 10,000 times.
debowils
Thu, May 2, 2013 : 2:31 p.m.
Just what State Street needs...not. I want Kresge's back. You could buy all sorts of needed items there and get lunch at the counter or at the hot dog stand with Richardson's Root Beer. Yum.
mady
Thu, May 2, 2013 : 2:20 p.m.
Could be considerably worse. Could be a Wal*Mart(shudder!!!!).
rm1
Thu, May 2, 2013 : 2:12 p.m.
Amid all the animus here against Walgreen (against chain stores, generally). it might be remembered that the chain's founding family donated the funds for the fine Walgreen Drama Center building on north campus, which includes the Arthur Miller Theatre and Stamps Auditorium, and houses the Musical Theatre Department and the Theatre and Drama department. Charles Walgreen (the founder's son, who ran the company for several decades) was a 1938 graduate of the the School of Pharmacy.
Lizzy Alfs
Thu, May 2, 2013 : 1:41 p.m.
Walgreens has been opening more "upscale" stores in certain locations across the country. One that opened in Chicago last year has a sushi bar, a mini spa and 700-bottle wine selection: http://articles.chicagotribune.com/2012-01-10/business/ct-biz-0110-walgreens-flagship-20120110_1_kermit-crawford-walgreen-health-care When they talk about a "campus flagship" store, I wonder if this one will have produce and other groceries, along with some of these other specialty departments.
Sarah
Thu, May 2, 2013 : 5:21 p.m.
When we were in Boston in early April, we saw a Walgreens that was finishing up renovating a former Borders - from what we could see, it looks pretty similar to what Chicago has. It will be interesting.
hail2thevict0r
Thu, May 2, 2013 : 1:08 p.m.
I don't like it, but I can't say it doesn't make sense. That was probably an extremely expensive location for anyone to lease, especially a local business (most likely a restaurant). It just is what it is unfortunately.
Lizzy Alfs
Thu, May 2, 2013 : 1:34 p.m.
Also, keep in mind the space is huge. It's 18,000 square feet, which is generally too big for a restaurant.
KBGoBlue
Thu, May 2, 2013 : 12:51 p.m.
Michigan Book and Supply isn't much of a loss (overpriced books and terrible Michigan gear), but why another pharmacy? CVS and Walgreens are practically the same thing. As a student without a car, I would rather see some type of grocery store with fresh food.
KBGoBlue
Thu, May 2, 2013 : 5:35 p.m.
@mun: I subletted in 411 last summer and enjoyed Babo, but it's a pretty niche store and everything's really expensive. I like it for the occasional convenience item or treat, but I wouldn't do all my shopping there. Also, Division and Washington is pretty far from most student neighborhoods. I agree that not many chains would want to do an "urban" store concept, but as an ideal, I would like to see Trader Joe's, Whole Foods, Kroger, Target (markets to a younger crowd, currently trying new grocery concepts in some markets) or a local shop similar to People's Food Coop. I know I'm dreaming, but it would be so much better than a Walgreens!
mun
Thu, May 2, 2013 : 4:22 p.m.
"As a student without a car, I would rather see some type of grocery store with fresh food." There is Babo's in the 411 Lofts, Washington & Division.
mavfunn
Thu, May 2, 2013 : 2:59 p.m.
As for White Market in particular, it's worth noting that the building housing it was sold last year and the new landlord decided to more than double the rent. White Market didn't directly close from a lack of business; they were forced out to be replaced by unneeded (and often unoccupied) chain restaurants who could afford the new rental rate offered by the landlord.
Ben
Thu, May 2, 2013 : 1:54 p.m.
It kind of surprises me too that grocery stores aren't more in demand, but as Tex points out, it would appear they really aren't. White Market was just around the corner and couldn't survive. I wonder if the prevailing pattern is that students would rather take cheaper prices over the convenience of walking distance. Unfortunately, like Tex also said, bigger supermarket chains are not going to move in. It's not really in their plan to have such a small "urban" store; at least, not chains around here like Kroger or something. Their core customers are suburbanites that stock up on big grocery trips. It's hard when the only big chains that will really consider an environment like downtown A2 are the drug store chains.
Tex Treeder
Thu, May 2, 2013 : 1:23 p.m.
The problem is that students historically haven't supported food stores enough to make that profitable. White Market is gone, for example. Maybe a small Kroger or Aldi or Farmer Jack is what you want, but they don't find that sort of location profitable enough.
daytona084
Thu, May 2, 2013 : 12:50 p.m.
Here we go again... The corner of S. State and N. University if not "downtown" as the headline claims.... It is adjacent to U-M campus. Main Street is downtown.
Lizzy Alfs
Thu, May 2, 2013 : 4:06 p.m.
I'd also like to point out that the headline and the story don't actually say downtown anywhere? Either way, I think everyone has their own thoughts as to where downtown starts and ends.
Usual Suspect
Thu, May 2, 2013 : 3:51 p.m.
Kyle, so what you're saying is you rely on the definition made by a group that has an interest in stretching the boundaries of what is called "downtown." How about you go with what Ann Arbor people have been using for several decades?
daytona084
Thu, May 2, 2013 : 1:36 p.m.
Wow! So the DDA claims "downtown" includes the entire U-M diag area and all the way to the corner of Hill St. and South U?
Kyle Mattson
Thu, May 2, 2013 : 1:05 p.m.
Hi Daytona- Everyone seems to have a slightly different interpretation as to what they consider downtown to be. As a result we usually use the city's DDA boundary lines to keep some form of consistency when referring to downtown. http://www.a2dda.org/downloads/DDAStreetMap.pdf
teeters
Thu, May 2, 2013 : 11:58 a.m.
I can't stand that it's going to be a Wallgreens, but with real estate so expensive, AA will have to get used to big chains moving in while the mom-and-pops are pushed out.
seldon
Thu, May 2, 2013 : 1:09 p.m.
(I'm not saying that the phenomenon you describe isn't happening, I'm saying that you picked exactly the wrong article to complain about it in. This space has been in this kind of use since WWII if not earlier.)
seldon
Thu, May 2, 2013 : 1:05 p.m.
SEE ABOVE (And Michigan Book & Supply wasn't a mom-and-pop either, do your homework)
seldon
Thu, May 2, 2013 : 11:50 a.m.
Before people get up in arms about a chain that sells stuff going in here, this building was a Kresge's or something like that for 40 years before Michigan Book & Supply came in.
garrisondyer
Thu, May 2, 2013 : 1:55 p.m.
Seldon, what interest do you have in badgering folks who would like to see this space occupied by a more appealing company? Are you in the business of getting large chain stores in towns where residents tend to pride themselves on the character of their city? I realize the answer it most likely no, but you do seem to have a strong desire to belittle people with the opinion that the companies moving into their town ought to be something other than a huge chain. Strange.....
daytona084
Thu, May 2, 2013 : 12:52 p.m.
@seldon... you called that one correctly. Only a matter of minutes for the first up-in-arms comment.
Lizzy Alfs
Thu, May 2, 2013 : 12:09 p.m.
Yes, it was discount variety store S.S. Kresge. There is a photo of the building in the 1970s as the Kresge in this story: http://www.annarbor.com/business-review/michigan-book-and-supply-downtown-ann-arbor-sold-walgreens-agree-realty/