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Retail Pride

Tom Petzold’s family has been doing business in Detroit for decades. They have owned the Belmont Shopping Center on the Detroit side of the intersection of 8 Mile, Conant and Dequindre roads since 1958.

Throughout that time business has gone quite well. Most of the space in the 149,503-square-foot complex has been leased out to a mix of national retailers and local businesses. Three of the original businesses are still there, although under different ownership and names.

That all adds up to potential for Petzold. He knows how strongly businesses have historically performed in and around the Belmont Shopping Center and wants to expand. Petzold thinks the surrounding neighborhood is underserved and residents are tired of driving far off into the suburbs to shop and dine. To back up that claim he put more than $1 million in improvements to the shopping center façade in 1999 and wants to add 7,500-square-foot addition to his shopping center.

“It’s not predicated on signing a lease or bringing in a new tenant,” Petzold says. “We have seen a definite appreciation of the rental rates and sales volume.”

Petzold sees what some major corporations are starting to open their eyes to – that urban areas offer more potential for retail development than has traditionally been thought. New innovative studies are showing urban neighborhoods have more buying power than traditional studies have previously indicated. Large retail corporations are either setting up shop or planning to in both reemerging and well-established areas of the city, reversing the longstanding trend of building most new retail outlets in outer ring suburbs.

New studies

For decades studies determining the viability of building retail establishments depended on data from the U.S. Census, such as population numbers and average household income. These studies often point toward growing areas, such as the suburbs and exurbs, as the best places to set up shop. However, new studies are showing there are untapped markets in big-city urban areas that have been passed over.

One of the biggest groups pushing these new studies is the Brookings Institution. It has successfully surveyed big cities – such as Oakland, Chicago and Cleveland – and found that in these areas negative aspects are usually emphasized over strengths. They use tax bills, credit card receipts and utility bills to determine population and buying power. The affiliatated agency Social Compact — which is dedicated to stimulating  business investment in inner city neighborhoods — has found double-digit increases in the number of residents and their buying power in these areas on top of large cash economies in inner city neighborhoods in Washington D.C. and Houston. These surveys have been used to convince retailers to invest millions of dollars into setting up shop in urban areas.

This has caught the eye of Detroit Mayor Kwame Kilpatrick, who referenced these new studies in this year’s State of the City speech. His office plans to work with Social Compact over the next three years to find out just how much Detroiters can really spend.

“They (Social Compact) have been very successful in convincing retailers who once said “no” to a community to actually change their decision and locate in that community,” Kilpatrick said in his State of City speech.

There are already signs of this type trend starting to emerge in Detroit. Major retailers Borders and Barnes & Noble have set up new stores in downtown and Midtown, respectively, and are doing brisk business. The new Home Depot on the city’s northwest side has proven to be a popular destination. J.C. Penney is reportedly looking at becoming the anchor of a new mall planned for the Detroit side of 8 Mile and Woodward Avenue.

“We know Detroiters can shop with the best of them,” Kilpatrick said in his State of City speech. “And we deserve to have the best retail right here in our neighborhoods.”

Seeing the forest through the money trees

Petzold sees the potential consumer base in the neighborhood around the Belmont Shopping Center. He sees row after row of neat bungalows filled with families and senses the neighborhood on an upswing. He watched and helped the neighborhood recently raise more than $500,000 to renovate Butler Park behind his shopping center. The community uses his parking lot as staging areas for its parades. All of that and the numbers from his shopping center lead the Birmingham resident to believe the local demographics are much better than they’re reported to be.

He also sees demand for other services. Although a vast majority of his strip mall is dedicated to retailers, like Footlocker and Radio Shack, he wants to expand it to make room for a large, formal dinning restaurant in an unused parking lot along Conant Ave. He sees lots of fast-food places along 8 Mile but nothing for families to sit down in and have a nice dinner.

“There is a tremendous amount of pride in the neighborhood,” Petzold says. “A lot of people take offense to not being able to dine in their own town. It hurts people on an emotional level.”

Maizin Shina, owner of the Imperial Supermarket in the Belmont Shopping Center, also sees the potential. Shina has owned the full-service grocery store, once a Kroger, for 10 years and sees business opportunity in the area just waiting to happen.

“Our neighborhood is in very good shape,” Shina say. “I have been here since 1996 and I don’t see any big problems. It’s a nice clean area for a couple of miles.”


Jon Zemke is a Detroit-area freelance contributor to Model D and metromode.

 


Photos:


Tom Petzold and the Belmont Center

Rite Aid, one of a few national retailers at Belmont

The Belmont Clock

Imperial Super Market

Butler Playfield



All Photographs Copyright Dave Krieger

Read more articles by Jon Zemke.

Jon Zemke is a news editor with Model D and its sister publications, Metromode and Concentrate. He's also a small-scale real-estate developer and landlord in the greater downtown Detroit area.
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