Focus, Economic Development, and Real Estate

Is it a hidden and unpolished jewel?

Small section of South Division needs changes to meet its huge potential.

December 8, 2012
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Is it a hidden and unpolished jewel?
Three blocks of South Division Avenue near downtown could be a retail gold mine, according to a report issued by a planning consultant.
Editor’s note: This is the third in a series looking at retail potential in downtown Grand Rapids.

When Gibbs Planning Group Principal Robert Gibbs inspected three blocks of South Division Avenue last summer, he saw this small portion of the Heartside Business District as being economically challenged and with too many commercial buildings that were either vacant or underutilized.

Gibbs found only eight existing stores on that short stretch, with one being a restaurant, just a few blocks from a core commercial area. Still, he called the avenue’s tract from Oakes to Williams streets one of downtown’s most promising sectors.

In the report he delivered to the Grand Rapids Downtown Development Authority, Gibbs felt this tiny commercial district could support from 25 to 30 new shops and restaurants across 77,140 square feet of space.

Some of the new businesses he envisioned were a hardware store, food market, limited-service restaurants, apparel and shoe stores, a lawn and garden store and a sporting goods store. Gibbs said the additional retail could generate up to $34 million in annual sales in just five years. But then he added a caveat.

“The 77,140 square feet total of new commercial is sustainable only if the district adopts urban planning and retail industry management practices.”

The planning and practices, he said, are necessary components for business growth there because the sector has underperformed for “numerous nonmarket reasons.” Those include a concentration of subsidized housing with a lack of market-rate housing, aggressive panhandling, limited access to capital, poor management, limited parking, vagrancy and a general shortfall of modern business practices by its retailers and restaurants.

Gibbs said 15,000 vehicles pass through the commercial sector daily, and the larger trade area is roughly 75,000 people in 27,200 households within a two-mile radius of those blocks. He also reported that the average household income in the district’s trade area is $38,900.

He felt retail traffic could be drawn from Catholic Central High School, the Douglas J. Aveda Institute and the Urban Institute for Contemporary Arts. Other customers could come from Saint Mary’s Health Care, Mary Free Bed Rehabilitation Hospital and Ladies Literary Club.

The DDA hired the Gibbs Planning Group, which is based in Birmingham, Mich., for $83,000 last spring to conduct a retail analysis of the Central Business District. The report divides downtown into four sectors, with South Division being one, and projects the CBD can support from 120 to 150 new retail shops and restaurants over 481,160 square feet of commercial space.

Next time: The Ionia-Commerce corridor.

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