Economic Development, Food Service & Agriculture, and Retail

Retailers now see GR differently

February 12, 2016
| By Pat Evans |
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As Anthony Martir prepares to open his seventh Bravo! Cucina Italiana this month, he’s been blown away by support from the Grand Rapids community.

The restaurant opens officially Feb. 18 at its new building at Knapp’s Crossing, but Martir said responses to invitations for the soft opening Feb. 15 and 16 have come back, and both lunch and dinner are fully booked.

“I’ve never seen that,” Martir said, adding he’ll still honor the dining certificates for people who weren’t able to secure reservations. “I’ve done seven openings and our first international store in Puerto Rico, but we’ve filled up quicker than we thought.”

Martir said Bravo! has been looking at the Grand Rapids market for at least five years, and after an initial spot fell through last year, settled on the Knapp’s Corner development on East Beltline Avenue.

The lack of retail space in West Michigan is a concern, said Mike Murray, principal at Colliers International of West Michigan. Murray said the inventory in many of the area’s traditional retail corridors — Alpine Avenue and 28th Street SE, in particular — is low. That poses a problem for some real estate agents and potential retailers wanting to move in the area.

“We have to be creative in our role helping the retailers find a new location,” Murray said. “There even have been buyouts of tenants who have been there too long. You have XYZ retailers who look like they’re doing fine, but their concept is tired, and they might take a check to walk away.”

Also on the docket is added retail development, especially in areas such as the M-6 corridor where Tanger Outlets opened last year and on East Beltline NE. Murray said there will be more retailers new to West Michigan building within the year.

A lot of that construction, however, will be spec construction, according to Rod Alderink, principal at NAI Wisinski of West Michigan. He cited the exodus of skilled craftsmen from West Michigan during the Great Recession as a reason occupancy is high in the retail segment.

“Our contractors in West Michigan are busy — we’re not seeing a ton of new development because our cost of construction is so high,” Alderink said. “We’ve absorbed a good chunk of the vacant space so we will see more development, but banks aren’t excited about spec retail. But we will see more tenant-driven projects.”

Alderink also names the Great Recession as a reason national retailers are looking at West Michigan as a place to develop new business. As retailers sat back and waited to see what happened when the economy dipped, they were able to make a plan and figure out which markets were recovering best. Among those was West Michigan.

He cited the Grandville area, Knapp’s Corner, 28th Street, M-6 and Alpine Avenue as proof the area’s retail market is extremely strong.

“Grand Rapids was, at one time, a tertiary market to look at after they went to Chicago or Detroit,” Alderink said. “Now it’s a place to be.”

For Bravo!, the draw was partly because of the dynamic neighborhood: Thousands of new residents are flocking to the Grand Rapids Township and Ada areas.

“I don’t know if there’s a formula we follow to say ‘this place has so many people so we need to be there,’” Martir said. “We look at if there’s a college around or a large shopping area that’s popular, and if it’s a right fit. Grand Rapids is a place we’ve wanted to be because it’s such a great and vibrant market.”

Martir said Bravo! didn’t look at the downtown area because its concept is an upscale casual eatery with a family atmosphere. The parent company does have another concept — Brio Tuscan Grille — that Martir said would be a better fit for downtown.

Downtown Grand Rapids is a whole different animal when it comes to retail, as mom-and-pop businesses and local restaurants generally are the rule. Part of the reason for that is national retailers like to be near other successful major retailers and like to have the flexible space to run their concept, Murray said.

Downtown Grand Rapids also is nearly 100 percent full from a retail real estate standpoint, and the road system makes it easy to get from one place to another faster than in other cities, Murray said, citing the ability to go from 28th Street or downtown to Alpine Avenue quickly.

“If a grocery store or Walgreens or CVS or Rite Aid wanted to move downtown, where do you put them?” Murray said. “Chicago has a convenience store on every corner. They have the space and the population.”

The demand for major retailers in downtown will come from the people who live there, Alderink said. He applauded Grand Rapids’ efforts to make downtown a cool place to live, which in the long run will bring the national names to downtown, he said.

He added that parking will be an issue until the critical mass of downtown residents can support a national retailer without relying on suburbanites who need parking.

“We’ll continue to see local, regional and national names looking at downtown; we just need a bit more mass,” Alderink said. “Look at the peripheral: Wealthy Street picked up Biggby and Subway. Names like that are circling downtown. Wolfgang Puck is downtown now. There are some neat things happening.”

National names that have come to the area, such as Wolfgang Puck, Cabela’s, Tanger Outlets and Trader Joe’s, are prompting other large retailers to take notice.

“Every new name that enters the market opens up another set of eyes looking at us,” Murray said. “People are noticing the names coming here, the universities, the JW Marriott. When they analyze the market, we look good to them.”

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