Economic Development, Government, and Retail

Consultant sees lots more retail for downtown

November 17, 2012
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Consultant sees lots more retail for downtown
One of the shops Robert Gibbs visited while in town this summer was Bokay, located in the MoDiv retail incubator. Courtesy Grand Rapids DDA

A nationally known retail consultant hired by the Grand Rapids Downtown Development Authority last March has concluded that four areas in and around downtown can support another 120 to 150 new shops and restaurants over another 566,460 square feet of commercial space.

The DDA revealed last week that Robert Gibbs, principal of the Gibbs Planning Group in Birmingham, Mich., said there was that much pent-up demand for shops and places to dine in the district.

The four areas Gibbs identified are East Fulton, the Ionia and Commerce corridor, South Division Avenue and the “Government and Monroe Center” sector. By “Government,” he meant the blocks along Ottawa and Ionia avenues that are north of Monroe Center.

Gibbs estimated the four areas have the potential to generate up to $205.5 million in additional annual sales.

Gibbs toured the downtown district last summer, held 29 consultations with business owners and said he bases his firm’s assessments on supply-and-demand data.

“Our retailers appreciated his time and wanted more of it,” said Anne Marie Bessette, DDA retail specialist.

DDA Executive Director Kristopher Larson pointed out it was important to recognize that the economic analysis Gibbs provided didn’t account for the existing supply of retail downtown, the competition for retail spending in the area, consumer preferences, or the limitations that downtown’s built environment may have on expanding the offerings in the district.

But Larson said the analysis does give the DDA a third-party confirmation of specific challenges along with other economic barriers the sector faces in drawing more retail investment.  

One challenge he cited is the four areas have their own identities and are not a singular brand. Another is the retail areas are physically separated from each other rather than being contiguous. A third is an undefined working relationship exists between the groups that are involved in trying to attract retail to downtown.

Still, Larson called the report a “resource of information that the community can use to better understand downtown’s current economic conditions and provide real estate professionals with reliable data for integration into relevant marketing materials.”

Here is a summary of the opportunities Gibbs saw:

  • East Fulton has room for 10 to 12 more shops and restaurants across 17,000 square feet of space.
  • Ionia/Commerce has room for 15 to 18 more shops and restaurants across 58,220 square feet.
  • South Division has room for 25 to 30 more shops and restaurants across 77,140 square feet.
  • Government/Monroe Center has room for 70 to 90 more shops and restaurants across 328,800 square feet.

In his report, Gibbs said the lack of more downtown retailers and restaurants was due to “nonmarket circumstances” such as parking management, marketing, street patterns and poor business practices.

The new businesses Gibbs sees as being “supportable” include a 12,000-square-foot “green” grocery market, a 25,000-square-foot junior department store and 47,000-square-foot “urban-format” department store.

He said downtown workers, residents within a 10-minute drive and college students who attend the 10 educational institutions in and near the district are the primary potential customers, amounting to more than 220,000 individuals.

“Finally, the downtown’s nationally recognized entertainment and cultural venues, including ArtPrize, enable the district’s retail and restaurants to service a significant tourist component,” wrote Gibbs.

Larson felt more retail recruitment partnerships are needed if the DDA is to meet what Gibbs laid out for downtown in his analysis. He said the board’s Economy Action Group has begun to look into that matter. He also felt the barriers retailers face need to be better understood, and the DDA has to find the “low-hanging fruit” that will help ignite the demand for more retail investment.

Larson also thought the owners of downtown businesses are deserving of more recognition.

“In the short term, we need to improve the performance of our existing (retail) stock,” he said. “Nothing breeds success like success.”

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