Lasting Effect of the SuperBowl

[Allan]

The buildings were improved mostly because the city put pressure on the owners to fix them up. They were given the added incentive of having a portion of the work paid for using a grant from the DDA...free money to make improvements that long-term would've needed to occur anyhow. I can imagine that the owners of these buildings rented out their spaces for a pretty penny during the Super Bowl festivities. In some cases, I'd imagine that the profits during the Super Bowl actually paid for the entire facade renovation.

A lot of the retail space downtown is empty because the owners are demanding ridiculous premiums for the space. A friend of mine was looking to rent space for a store downtown. The owners of the buildings are waiting for some sort of retail miracle to happen, and have priced their spaces accordingly. Woodward space in particular is very pricey. The foot traffic isn't there yet...it's part of the chicken and egg issue that exists downtown. You'd think that most building owners downtown would rather have a tenant paying minimal rent than no tenant at all.

A big issue with a lot of the buildings is that they are owned by people who are sitting on them, waiting for the city to turn around so they can sell and make a huge profit. Few of the owners seem to be willing to take the initiative to improve their buildings. They have no interest in making improvements themselves...for the most part they just want to sell or lease the buildings to developers who will give them lots of money. Meanwhile, taxes and maintenace costs on the empty buildings are low or non-existent. Dennis Kefellanos, for example, is quite possibly the biggest single land owner in downtown outside of the Ilitches. He owns probably a dozen buildings in the downtown core, virtually all of which are sitting empty, or are in some stage of low-cost "renovation."

[Michi]

Right, so why doesn't the city do something about it like they did pre-Super Bowl? I mean they CAN, it's just that they aren't. And demanding high rent is stupid. I realize that that's left to the owners discretion, but why don't they just let the market drive the demand and work out deals with interested tenants?

Other than the chicken or the egg argument, this really isn't THAT hard!

[Allan]

I agree. Simple economics would dictate that the rents would adjust according to demand. I keep thinking that there must be some other factors at work here that we're not thinking of.

The city of Detroit really isn't business-friendly at all. Remember how long it took for Slow's to open? That was all thanks to the city bureaucracy. The owners tried to expedite the process of getting all the proper permits, inspections, and certificate of occupancy once the restaurant was done & ready to be opened, but even with the owners pulling strings at the city county building, it still took many weeks.

Or, for instance, the gourmet grocer on Woodward that we've all been waiting for. They are trying to get that place opened by March, but the city is being stubborn and won't issue a certificate of occupancy for the Crystal Lofts building. The longer the city drags its feet, the more delays the project will have.

All the people I know who've opened small businesses in Detroit have had problems with the city. I can't help but think that if they could cut out even a small part of all the red tape involved, that more people would be willing to start a business here. It seems that unless you're Dan Gilbert, Peter Karmanos, or Mike Ilitch, that nobody from the city wants to help out.

With that said, there are some amazing, hard working people here that have become successful opening small businesses here...I just wish there were more people that dedicated to the city.