Detroit’s chance of netting major retailers improving

Louis Aguilar and Ian Thibodeau
The Detroit News

Detroit may be near the tipping point in getting major retailers like Target and Kroger to open in the greater downtown area.

In most cities, such stores are commonplace. In Detroit, every type of major national retailer – supermarkets, department stores, movie theaters, restaurants – started to vanish from the city limits more than 60 years ago. When residents began to move out of Detroit, big retalers followed them.

Even now, a Home Depot (one store), a Kroger (no stores) or a Starbucks (eight stores) are rare in the 142-square-mile city limits.

But the greater downtown area – the central business district, Midtown, Corktown, Eastern Market – has seen a recent wave of new residents and new specialty stores, including some chains like Whole Foods in Midtown and Nike downtown.

“At this point it’s a matter of time, but, it’s still a tough sell,” said George Jackson, a veteran of Detroit’s development scene. For 12 years, it was Jackson’s job as the head of the city’s Detroit Economic Growth Corp. to try luring major retailers to the city, and most often they declined. He negotiated with Grand Rapids-based Meijer Inc. for eight years to open a store in Detroit. Now, Meijer has two super-centers in Detroit – neither in the downtown area.

Several major players in the greater downtown development scene – Dan Gilbert’s Bedrock and the Ilitch family’s Olympic Development of Michigan – are aggressively courting Meijer, Target and others, officials have said in the past. Analysts and developers say the number of new residents and workers have reached the criteria necessary for an “urban version” of a Target or Kroger to consider setting up shop in the city. An urban version means a smaller store compared to typical suburban store.

“It’s the combination of new people and new workers,” said Robert Gibbs, of the Gibbs Planning Group in Birmingham. Gibbs is an urban planning expert and adviser to developers.

“Generally, Target and others like to have 80,000 people within the trade area. Downtown Detroit has about 250,000 in a four-mile radius, so technically it has enough. But I’m guessing, anyone would like to see 2,000 to 5,000 more people, maybe in Brush Park.”

Gibbs also said stores like Target “don’t like to be first” but rather come with a group. “There’s a phrase called ‘dirty dozen’ – meaning stores come together, like a Target, TJ Maxx and others.”

Jackson said getting a national retailers would come with a price for taxpayers.

“It’s likely to be highly subsidized.” he said. Jackson now runs his own development and consulting firm called Ventra LLC.

“Most cities give incentives to get these type of stores,” Jackson said. “Mainly because the costs for a retailer – the price per square footage, the taxes, the insurance – are higher in cities compared to wide-open space in the suburbs.”

On Thursday, a development and leasing agent downplayed a report that a Target store could anchor a potential Midtown development at Mack and Woodward near the Whole Foods store.

“Yes, we are working on potential development at the site – that’s the point we are at, working on the development,” said Howard Schwartz of Howard Schwartz Commercial Real Estate. He said it’s “premature” that any retailer is attached to the project.

Kristy Welker, Target spokeswoman, said: “We do not have any plans to share and no deals are signed or complete.”

Dan Austin, spokesman for the city, said Detroit officials have no knowledge of a Target coming to Midtown.

Twitter: LouisAguilar_DN