Local in Ann Arbor

A recent article in the Ann Arbor Business Review describes an increase in retail and commercial vacancies, with a drop in asking prices for rents.  This is good an indication as any that business is not doing very well downtown.  But what are the causes and cures?

There was some slight interest in the question of downtown’s retail success at the time that Ann Arbor was walking through the Calthorpe exercise (predecessor of the A2D2 process).  The organizers invited Robert Gibbs, a specialist in developing retail centers, to speak.  His talk was inspiring and enlightening – and as far as I can tell, his recommendations were ignored.  As I reported in an article at the time, Gibbs made the point that what really determines the success of retail businesses is—parking.  What do customers want?  They want to be able to park in front of the place they are going, or failing that, not too far away.  But parking is a contentious issue right now.  The DDA has been doing an outstanding job of building and maintaining parking structures, but this is expensive.  There is a strong push to discourage the use of the automobile to reach downtown.  This makes sense for commuters, who are coming to downtown presumably for the whole day, and the estimable GetDowntown program is there to encourage the use of bicycles and the AATA.  But it won’t help to bring shoppers.

Another factor that has been affecting our downtown retailers has been the surge in property prices and rents. We’ve seen a number of local stores that provided a good basic service leave or close partly because of rents.  With rents now falling, perhaps we will keep some of the remaining ones.  My belief is that the bubble in real estate speculation that characterized the whole country has affected our downtown by pushing up rents and the value of property that might yield a quick development buck.  Newcombe Clark is quoted in the Business Review article as saying, “One result of the falling rents is that downtown buildings will lose their value…Another is that new construction will become economically impossible because the rental rates won’t support the costs of building”.  Yes. Exactly.

The problem is that the business of downtown has become only the business of development.  The Ann Arbor Chamber of Commerce (who surely should be looking after the interests of  business) recently issued a policy statement that, if adopted, would expand the built environment of downtown by developing it intensively up and out.  They are still trying for taller buildings and they are frustrated with all those troublesome historic districts.  And while we are at it, let’s make the area where we can build these big buildings bigger (goodbye, Central Area Plan).  But will this really make our downtown healthier?  I say no.  The opportunity to make money from development downtown has blinded us as a community to what makes the downtown valuable to begin with.  That is its character.  Alter the character too much, and no one will want to visit it.

Look at the images shown on the Main Street Association site.  What makes it attractive?  The old (aka historic) buildings.  Its wide walkable sidewalks, somewhat impeded by outdoor seating (European!), and nice trees help.  But the human scale of the buildings and their charming facades are what really distinguish it.

Last summer, the economic development specialist Donovan Rypkema (who specializes in commercial district revitalization and the reuse of historic structures) gave a talk in which the take-home message was very simple: if you want to develop a successful upscale community, historic preservation is an important tool because the young professionals you are trying to attract want that authentic ambiance.  I think I’m not stretching his point too much to say that this authenticity will also bring in customers.

Of course, it is also key that downtown should offer services that we want.   One of my favorite places to visit is Downtown Home and Garden, where I can buy stuff I actually need for gardening and cooking.   Now look at this business.  It is in a historic building.  It’s fun to go in there (even if the cat is not on duty).  And you can drive your car right into the building (or park in the adjacent privately owned parking lot).  Put that together with a good business sense of providing things people want to buy, and you have a successful downtown business.

This entry was posted on May 1, 2009 at 7:22 pm and is filed under Business. You can subscribe via RSS 2.0 feed to this post's comments.

Tags: local character, localization