Study shows Grosse Pointes could be open for many more businesses

By: K. Michelle Moran | Grosse Pointe Times | Published February 15, 2017

GROSSE POINTE FARMS — That longstanding belief about the Grosse Pointes being unable to handle any additional commercial development because of their small size and location on Lake St. Clair — making them inaccessible from one side except by boat — just got thrown out.

Contrary to popular perception, there’s plenty of room to grow in the Pointes, and retailers and restaurants both large and small should be clamoring for space, at least according to the findings of the well-regarded Gibbs Planning Group, which is based in Birmingham. Robert J. Gibbs presented findings from a retail study of the area during a presentation Jan. 31 at the War Memorial packed with dozens of stakeholders, including business owners, landlords and city officials.

Gibbs said the community — marked by high levels of education, wealth and income levels — is exactly what many businesses are seeking, and the east side is “greatly underserved for retail” now.

The study was undertaken by the Grosse Pointe Chamber of Commerce, working in concert with officials in the five Grosse Pointes and the Grosse Pointe Public School System. The Gibbs Planning Group looked at the community from retail, restaurant and commercial angles and analyzed major business districts along Kercheval and Mack avenues. Among the findings: The four commercial districts studied — the Village, the Hill, The Park and Mack — can currently support as much as 563,200 more square feet of retail and restaurant development, which could generate up to $164.1 million in additional sales. According to their calculations, the demand for goods and dining could be supported by as many as 100 new stores and restaurants.

Grosse Pointe Chamber of Commerce Executive Director Jennifer Palms Boettcher said Gibbs is “nationally recognized” in his field. She said he “believes sustainable development is only possible” with vibrant retail.

Although Grosse Pointers are known to head out to Partridge Creek in Clinton Township, Somerset Collection in Troy and the Birmingham area to shop, Gibbs said they shouldn’t have to travel that far to find the goods and services they want, given their appealing demographics.

The five Grosse Pointes had a total population of about 45,200 as of 2016, according to the report. Altogether, the median home price is $243,000, and the average household income is $135,500, which gives the Grosse Pointes one of the greatest densities of high-wage earners in the metro region.

“They have a lot of wealth … and they’re very discriminating spenders,” Gibbs said of typical Grosse Pointers. Those are both factors that retailers find very desirable, he said.

By contrast, the median statewide average income in 2016 was $56,700. Roughly 65.5 percent of adults over age 25 in the Pointes have at least a bachelor’s degree, while the average in Michigan in 2016 was 16.7 percent.

In addition, Gibbs said there are more than 16,000 workers in the Pointes, and each of them can support 25 square feet of restaurant and retail space. He said office workers alone could spend about $286 million annually in the area.

“It’s a tremendous missed opportunity … that I think you have a chance to go after,” Gibbs said.

He said the Pointes have “more diversity in housing types than we normally see.” Excellent schools, parks and city services are additional pluses.

But even with the desirable demographics and demonstrated room for growth, Gibbs acknowledged that it might be hard to attract some national chains.

“The better retailers are ignoring Michigan,” he said. “It’s been that way since the Great Recession.”

Gibbs said many of these businesses are reluctant to open stores in Michigan because they believe the economy hinges too closely on the automobile industry, which these retailers see as a cyclical business.

And Gibbs recognized that parking “is a major challenge here” and it “can make or break a district.” He said the downtown Birmingham model — expensive on-street metered parking and cheap parking garages — are something the Pointes could look at if they want to add more retail.

One audience member asked where all of the new businesses could be located, given the lack of available space in the community. Gibbs admitted this was a “good question,” and said another issue community leaders need to decide is whether they want to draw customers from a regional base instead of a more local base.

“Do you want people who don’t live nearby coming here on a regular basis?” Gibbs asked. “A lot of communities don’t.”

The demand in the area could also be met almost entirely by existing businesses modernizing and extending their hours to meet the needs of busy consumers who often need to shop or dine out on weekends or at night, he said.

Gibbs, who has studied communities all over the country, said the Pointes are “easily one of the top 10 communities in which we’ve worked” over the last 30 years. But he said that while growth is possible, it’s up to the communities to decide what they want to see.

Attorney Jim Bellanca Jr., who represents Kercheval Company LLC, was one of the stakeholders on hand for the presentation.

“The economy of Grosse Pointe has always been tied at the hip, whether we like it or not, with Detroit,” said Bellanca, echoing one of the points made in the report. “We need to find out how we can get our message out to those millennials (now living in Detroit).”

Gibbs said he believes the Pointes would be appealing to the young millennials now flocking to downtown Detroit apartments, once they start families or get dogs, because the Pointes — with their schools and parks, and scenic, walkable neighborhoods — are in demand with parents and pet owners alike.

Grosse Pointe Park City Councilman Daniel Clark was among the officials in attendance for the presentation.

“I’m very appreciative of the chamber for undertaking this,” he said afterward. “They’ve done a tremendous job.”

Now that Kercheval in the Park has been revitalized, with a number of new businesses joining some longtime favorites, Clark said they need to focus on Mack.

“I’m afraid we’ve dropped the ball there,” he said of the busy commercial strip, which has started to get some improvements in the Park. Clark said that Mack had been their focus 30 years ago, and they need to look closely at it again.

Gibbs said Mack was “one of the longest corridors we’ve ever studied.” Because of traffic, Mack isn’t walkable like the Kercheval districts, so businesses “have to work much harder” to attract customers. He said home furnishings, electronics and sporting goods stores are among the businesses that could do well on Mack.

“I’m awfully glad the chamber did it,” Grosse Pointe Farms City Councilman Lev Wood said of the study. “I’m thrilled that this study has been done.”

However, he said parking issues need to be addressed before any future development can go forward.

“I would be very concerned about parking and the impact on our residents,” Wood said after the meeting.

Clark expressed caution as well with regard to new development.

“All of our communities are primarily residential,” he said. “That’s what makes it so attractive. … I’m not at all surprised to discover that we’re among the top 10 markets in the country. The Park has always attempted to balance the interests of commercial with the interests of residents, because we’re primarily residential by charter. It’s a question of finding that fine balance.”

For more information or to read the study, visit www.grossepointechamber.com.