Finley, Jacques: Detroit poised for retail boom
Mackinac Island — Downtown Detroit’s rebirth till this point has focused on rehabbing old buildings to add office, residential and restaurant space. Now, the central city is poised for a retail boom that is expected to draw some of the industry’s biggest names.
Think Apple, H&M, Zara, Sephora, Peloton and even Target.
Those are among the stores being courted by Bedrock, the development arm of Dan Gilbert’s Quicken Loans empire, according to two of the company’s top executives.
Over dinner at the Detroit Regional Chamber’s Mackinac Policy Conference, CEO Jim Ketai and President Dan Mullen laid out a plan to fill downtown’s empty storefronts with a broad mix of retailers, from mom-and-pop shops to Fifth Avenue-quality boutiques — and the wave should begin building over the next few months.
“There are a lot of deals on the edge of getting done,” says Ketai. “Ideally, there are going to be a lot of announcements coming very soon.”
As soon as by the end of the year. Mullen just returned from the International Conference of Shopping Centers, where he says interest in Detroit was red hot.
“Five years ago you couldn’t get a meeting,” he says. “This year everyone wanted to talk about Detroit.”
Ketai says the slow addition of retail to the downtown fabric has been largely intentional. Bedrock was waiting for a critical mass of residents and office workers to assure a greater chance of success for retailers. It also wanted the initial phase of stores — Moosejaw, Lululemon, Nike, Warby Parker, etc. — to prove there is a viable market downtown.
“Those first stores are all doing great; breaking all expectations,” Ketai says.
In the future, Bedrock wants all of its building projects to open with retail, rather than waiting to add it later. That starts with the new Shinola hotel on Woodward, which is slated for a November debut. The initial focus is on filling in the Woodward storefronts, as well as those in Capitol Park. The Book Building on Washington Boulevard will have a robust shopping presence, Mullin says.
The company wants to craft a mix of stores that can effectively compete with Amazon and other Internet giants.
“People want an urban shopping experience,” Ketai says. “The focus has to be on the experience.”
The emphasis is particularly on stores that appeal to women. That goes beyond fashion to include home furnishings, sundries, salons and services such as dry cleaners.
They say they are committed to making room for small local players to preserve a unique Detroit feel. They expect some of the pop-up stores featured in the Winter Market to move into permanent storefronts downtown.
The gem would be landing an urban Target store. The retailer is looking at Detroit, and is currently interested in the Midtown area.
Mullen says Bedrock has an advantage in mapping the retail environment that landlords in other cities don’t have because it controls so much of the retail space.
Bedrock now has about 700,000 square feet available for retailers downtown, with only about 30 percent leased. That will grow to well over 1 million square feet when the projects planned for the old Hudson’s site and Monroe block are complete.
Over the next five to 10 years or so, the executives expect to put hundreds of new stores in that space.
“It will change the culture downtown,” Mullen says. “It will make it a retail destination point.”
Other developers share Bedrock’s prediction.
“The next 12 to 24 months, retailing will boom,” says Todd Sachse of Sachse Construction, who redeveloped the Albert Building in Capitol Park. “In terms of retailing, we need more of everything downtown. More stores, more professional services. We’re under-served here.”
Mayor Mike Duggan says more stores would help draw more businesses and residents.
“If you created the kind of storefronts that were experiences, you could see it potentially add to the momentum on housing, the momentum on business,” Duggan says. “I remember asking (mall pioneer) Al Taubman 20 years ago why can’t you build in Detroit, and he said people shop where they live. It seemed like a simple explanation from a guy who should know. Now, you’re seeing people living in downtown, Midtown.”
Those residents need places where they can purchase their everyday needs. But the bigger goal, Mullen says, is to create a “timeless mix of stores” that will coax shoppers off the Internet and onto the streets of downtown Detroit. He promises that’s coming soon.