Neighborhood Ventures uses study to ReStore Grand Rapids

February 12, 2010
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As most know, the primary goal of Neighborhood Ventures is to retain and recruit businesses to the city’s 20 neighborhood business districts. But the local nonprofit wants to extend that effort to more districts than the three it has mainly focused on since its inception in 2006, and it is trying to do that through its ReStore Grand Rapids program.

The backbone of ReStore is a MetroEdge study conducted by the Local Initiative Support Corp., a national group that helps communities transform distressed areas into healthy and sustainable neighborhoods. LISC, with offices in Detroit and Kalamazoo, found that $766 million in consumer spending “leaks” out of neighborhood districts annually into other commercial areas — even into some outside of the city.

The LISC study concluded that a neighborhood’s residents were looking to other areas for goods and services because their home district didn’t have the “right mix” of businesses to capture those dollars. ReStore is using the MetroEdge report to recruit new businesses to the districts to plug those gaps. The mission is to restore some of that spending.

“We have the study of what people who actually live in a neighborhood are purchasing. The next thing we want to do is we want to inventory what they already have. So we’ll look at the individual districts and for the available property space that is there, what businesses are currently in existence and how are they doing,” said Mark Lewis, executive director of Neighborhood Ventures.

“So what we can do then is take an intelligent approach to marketing the other available properties that may be in a given district and say, ‘Here’s an idea for this property that may never have been given before, but the MetroEdge study said this is actually a product or service that is supported by the neighborhood.’”

Once a targeted property or business is identified, Lewis and members of a business district collaborate on how to proceed. For instance, should another organization be pulled into the process, one that might have a lead on a business that is looking for a location? Or should a district’s business group work solely and quietly with a property or business owner?

Whatever method is selected, Lewis said the idea remains the same, and that is to mix current and local consumer data with on-the-ground research to place a new business on an existing site that fills a spending hole in a neighborhood.

Lewis said his organization would like to extend ReStore to all 20 districts, but the funding Neighborhood Ventures receives for the program prohibits it from doing that, at least for now. So the program is focusing on a trio of primary districts: the southwest side; the Uptown area, which is comprised of four business districts; and Southtown.

In addition, three districts on the city’s west side — Stockbridge, West Leonard and West Fulton — have told Lewis they’ve begun talking about how they can work together for promotion purposes. On the northeast side, the Creston Business District has set up its own corridor initiative.

“They want to see something exciting happening in their neighborhood, and even if it’s a convenience item that they buy every day versus a destination, they can still basically build on their unique character of the individual business district itself versus trying to mimic what someone else is doing,” he said.

Two of the city’s business districts — Uptown and Madison Square — have been approved for Corridor Improvement Districts. That designation allows them to capture a portion of the district’s property taxes to help pay for improvements. Lewis said more districts may request a CID, but it takes a large effort.

“CIDs are very time consuming and are very volunteer driven,” he said.

The city appointed 3rd Ward City Commissioner James White, Gertrude Hobson, David Allen, Tom Duthler and Jeremy DeRoo last week to the Madison Square CID Board.

Lewis, who has been directing the organization since August, said it’s nearly impossible for Neighborhood Ventures to determine if a business district has the right mix. Districts and residents aren’t the same throughout a city, so the demand for goods and services may be different. And some commercial areas have more space than others.

“There are certainly some districts that have higher occupancy rates — some business districts are over 90 percent. But the question is, has it hit its peak and is it fully sustainable, indefinitely? No, there is always room for improvement, as well,” he said.

“And even though there may be a 90 percent occupancy rate, there is still leakage and there is some leakage to be expected, as well. One of the things that’s in the study is auto dealerships as well as gas stations are needed. Well, name a place on Cherry Street where I’m going to put a car dealership. It’s not going to happen. So we’re realistic about some of those things.”

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