Discuss Detroit Archives - January 2008 Bleak Prospects Delay Shopping-Center Project Previous Next
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Mrjoshua
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Username: Mrjoshua

Post Number: 1545
Registered: 03-2005
Posted on Tuesday, January 29, 2008 - 11:04 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

BLUEPRINT

Bleak Prospects Delay
Shopping-Center Project

By MAURA WEBBER SADOVI
January 30, 2008
The Wall Street Journal

In Detroit, a city starved for retail options, plans for the first department-store-anchored shopping center since the 1990s look a little shaky.

Chicago-based General Growth Properties Inc., one of the country's largest mall owners and developers, says it had hoped to start construction last year on a 370,000-square-foot center on the Detroit side of Eight Mile Road, which separates the city from its wealthier suburbs. Now General Growth has pushed the planned construction start to the summer, citing the need for time to obtain the right mix of tenants.




Construction on a 370,000-square-foot shopping center in Detroit was supposed to begin last year.

The delay isn't surprising. There are few places where things look bleaker for retailers than in the Motor City, which was struggling to show signs of prosperity even during the recent period of national economic expansion.

By almost any economic yardstick that retailers use to decide where to open stores, the Detroit area's prospects don't measure up. The city's population has fallen roughly by half since 1950 to about 900,000. Despite pockets of wealth, the area continues to bleed jobs and people and its November unemployment rate of 7.2% was the highest of the 49 largest U.S. metropolitan areas, according to the Bureau of Labor Statistics. Additionally, home-foreclosure rates are sky-high. Average area office, retail and apartment rents are in decline or stagnant, according to Property & Portfolio Research Inc., a Boston-based real-estate research firm.

It also doesn't help that even previously fast-growing retailers like Starbucks Corp. are expected to be more discriminating about expanding nationwide this year, according to Michael Dee, national director of retail in Dallas for Grubb & Ellis, a real-estate services firm. The Detroit area's dwindling population, which stands now at about 4.6 million, is also a worry for retailers who typically chase locations with growing populations, he says. "Detroit is not going to be on top of the radar screen," says Mr. Dee, noting that leasing the Shoppes at Gateway Park will be challenging.

To be sure, Detroit has had some mixed success in its efforts to shore up a core that has been marred in past decades by empty storefronts and office buildings. The MGM Grand Detroit opened last year, the first casino in the city's central business district, and Quicken Loans announced late last year that it would move its headquarters and about 4,000 workers from suburban Livonia to downtown Detroit. At the same time, efforts to develop a museum to commemorate the city's Motown ties fizzled after the proponents were unable to raise the funds, says George Jackson, Detroit's chief development officer.

For its part, General Growth says it is up to the challenge of delivering Detroit's newest center. Lyneir Richardson, vice president of urban retail for General Growth, says it is working to persuade retailers to locate in the center. The 170,000 residents in a three-mile radius around the center have an average income of about $55,000, he says. Mr. Richardson says he has a letter of intent from J.C. Penney Co. to locate a store in the site, which would be the first department store for the city since the 1990s. "We have to overcome perceptions, misperceptions and bad information and show the opportunities," says Mr. Richardson. "There clearly is a void."

Write to Maura Webber Sadovi at maura.sadovi@wsj.com
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Toog05
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Username: Toog05

Post Number: 168
Registered: 03-2006
Posted on Tuesday, January 29, 2008 - 11:25 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

I hope this project really get off the ground. This is so important for the City of Detroit to instill confidence in the residents here and to the leaders of Detroit.
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Charlottepaul
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Username: Charlottepaul

Post Number: 2280
Registered: 10-2006
Posted on Wednesday, January 30, 2008 - 9:12 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Since there is a market in Detroit for more retail, then there is room for growth in the market. It's simple, if these retailers gave locating in Detroit some simple thought, anywhere where one can locate retail in an underserved market is a growth opportunity even if in the larger population, the overall market is in a downturn. Unless these retailers plan to sell luxury goods, everyone is still going to need to buy clothes and shoes and other necessities of life.
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Renfirst
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Username: Renfirst

Post Number: 174
Registered: 12-2006
Posted on Wednesday, January 30, 2008 - 10:33 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

The question is whether these developers can get the right retail for the project. Can't have it full Dollar Bins and Check Cashing stores...

I think when you look at a development like this as a boost in confidence for the city you'll be disappointed.
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Detroitrise
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Username: Detroitrise

Post Number: 1464
Registered: 09-2007
Posted on Wednesday, January 30, 2008 - 10:37 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

"The question is whether these developers can get the right retail for the project. Can't have it full Dollar Bins and Check Cashing stores..."

That's the problem. It's the "right retail" that is avoiding the project. I definitely don't see a Hallmark store or Victoria's Secret looking into the mall.
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Toog05
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Username: Toog05

Post Number: 170
Registered: 03-2006
Posted on Wednesday, January 30, 2008 - 10:43 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

I think that if they pull a few good retailers then other's will follow such as a Victoria Secret or a Hallmark store.

I say that they should just take their time and line up the right mix of retailers. I believe that they must get it right the first time in order for the trend of new retail in the city to continue. If they do not get a right and this mall fails then retailers will be reluctant to try again.
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Rb336
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Username: Rb336

Post Number: 4829
Registered: 02-2007
Posted on Wednesday, January 30, 2008 - 10:57 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

The owners are still doing "site development" i doubt it will start this summer
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Detroitrise
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Username: Detroitrise

Post Number: 1465
Registered: 09-2007
Posted on Wednesday, January 30, 2008 - 11:03 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Site development could mean anything. Usually when the developers say they're "site developing", there's something else hidden behind it (and the attraction of retails may be it). It doesn't mean they're not ready to begin on the project.
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Toog05
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Username: Toog05

Post Number: 171
Registered: 03-2006
Posted on Wednesday, January 30, 2008 - 11:04 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

I don't see why it can't start this summer simply because they have been working on this project for so long. If they are towards the end of getting all of the tenants together, I do not see why it should take more than 6-7 months to finish site development.
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Detroitrise
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Username: Detroitrise

Post Number: 1466
Registered: 09-2007
Posted on Wednesday, January 30, 2008 - 11:08 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

"I don't see why it can't start this summer simply because they have been working on this project for so long. If they are towards the end of getting all of the tenants together, I do not see why it should take more than 6-7 months to finish site development."

Because, like Bel-Air Centre, it could very well just turn out to be a bad investment and a waste of money building that huge complex and the retailers don't come.

Besides, I don't believe the stores (such as Best Buy and Jc Penney's) they got have signed a lease yet.
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Thejesus
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Username: Thejesus

Post Number: 3369
Registered: 06-2006
Posted on Wednesday, January 30, 2008 - 11:08 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

I'd surprised to see any shovels in the ground for this project before the decade is over

It was a nice little idea but a bit too ambitious for the location and the current economy
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Toog05
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Username: Toog05

Post Number: 173
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Posted on Wednesday, January 30, 2008 - 11:15 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Well I think Bel-Air Centre didn't survive because of its location. I think location says a lot even if it is just 5-7 miles down the road.

Look at Belmont shopping center (8 mile and Dequindre) which has similar tenants except for the junior box stores that Bel-Air had. Belmont is usually always pretty busy. The place has had success, they even had an article on the owner in ModelDMedia back 1-2 years ago on its success.
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Detroitrise
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Username: Detroitrise

Post Number: 1467
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Posted on Wednesday, January 30, 2008 - 11:37 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Well, Bel-Air was very successful during the late 80s and 90s. It had all sorts of national retail (Builder Square, Target, Toys R' Us), you name it. It was the place to shop if you didn't like going in the suburbs.

However, according to nearby Warrenites, what really choked it off was the fear of crime. I do believe Toys R' Us and Target suffered fro ma lot of shrinkage as well. The nearby Detroiters apparently weren't enough to keep it going when you had a nearby (vibrant at the time) Eastland Center.

(Message edited by detroitrise on January 30, 2008)
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Professorscott
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Username: Professorscott

Post Number: 1061
Registered: 12-2006
Posted on Wednesday, January 30, 2008 - 11:38 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

What metric are we using in making the claim that Bel-Air Centre "didn't survive"? I drive by there at least once a week, and I have not yet seen the shopping center demolished or vacant. Define "survive" so I know what you mean.
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Iheartthed
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Username: Iheartthed

Post Number: 2620
Registered: 04-2006
Posted on Wednesday, January 30, 2008 - 11:40 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

There are 170K people within a 3 mile radius of Woodward and 8 Mile? That's a density of about 6,071 people/mile by my calculations. With an average income of $55K... That's not bad.
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Detroitrise
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Username: Detroitrise

Post Number: 1468
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Posted on Wednesday, January 30, 2008 - 11:42 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Professorscott, I'm sure you can agree that Bel-Air has definitely seen better days?

Many of the stores there today aren't the national retailers that once occupied it. Really, the only original retailer still there is GameStop (Funcoland). Typically, the transition from national to independent stores is a sign of a dying mall. That's exactly what happened to Universal Mall.
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Thejesus
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Post Number: 3373
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Posted on Wednesday, January 30, 2008 - 11:46 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

"There are 170K people within a 3 mile radius of Woodward and 8 Mile? That's a density of about 6,071 people/mile by my calculations. With an average income of $55K... That's not bad."

Except most of those people whose incomes are higher than the average don't live in Detroit nor do they have any need or desire to cross 8 mile to do their shopping
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Iheartthed
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Username: Iheartthed

Post Number: 2621
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Posted on Wednesday, January 30, 2008 - 11:50 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

quote:

Except most of those people whose incomes are higher than the average don't live in Detroit nor do they have any need or desire to cross 8 mile to do their shopping



Actually, I think your logic is flawed as that area is one of the most affluent in the entire city.
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Johnlodge
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Username: Johnlodge

Post Number: 4870
Registered: 10-2003
Posted on Wednesday, January 30, 2008 - 11:56 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

As a Ferndale resident, I can tell you I have to drive too far for a number of simple things. This plaza should focus on those needs, we will come there if it is well kept and safe.
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Lo_to_d
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Username: Lo_to_d

Post Number: 49
Registered: 07-2007
Posted on Wednesday, January 30, 2008 - 1:22 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

"Except most of those people whose incomes are higher than the average don't live in Detroit nor do they have any need or desire to cross 8 mile to do their shopping"

I would venture to guess that the average income is higher in the area immediately west of woodward and south of 8 mile than the same amount of area directly east of woodward and north of 8 mile. Lets not continue this myth that EVERYONE who lives in Detroit is broke.
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Gistok
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Post Number: 6227
Registered: 08-2004
Posted on Wednesday, January 30, 2008 - 2:14 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

I have to agree with Detroitrise on the Bel-Air shopping center. Back when it was built and fully occupied, it had all sorts of stores, was vibrant and full of shoppers. The last time I visited (2 years ago) I had to visit a DTE office that was a small office in a huge vacant store, with most of the surrounding storefronts empty, or containing some of the cheesier types of stores.

Really sad.
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Crawford
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Username: Crawford

Post Number: 201
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Posted on Wednesday, January 30, 2008 - 2:54 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Thejesus is absolutely right, and speaks to why this shopping center is a big risk. It's true that the 8 Mile/Woodward area has decent demographics, but the people living north of 8 Mile will not shop south of 8 Mile.

If the shopping center works, its because of Detroit shoppers. Pleasant Ridge shoppers will not go to (what is perceived as) a "ghetto" location for shopping.
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Pgn421
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Username: Pgn421

Post Number: 324
Registered: 02-2005
Posted on Wednesday, January 30, 2008 - 3:00 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

they are just stalling
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Livernoisyard
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Username: Livernoisyard

Post Number: 4983
Registered: 10-2004
Posted on Wednesday, January 30, 2008 - 3:13 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

UD Scott: How would you parse survive?
quote:

What metric are we using in making the claim that Bel-Air Centre "didn't survive"? I drive by there at least once a week, and I have not yet seen the shopping center demolished or vacant. Define "survive" so I know what you mean.



Greyfields and Ghostboxes Evolving Real Estate Challenges
The once largest shopping center in Milwaukee, formerly owned and sold [around 1972?] by multimillionaire (perhaps, a billionaire by now?) Senator Kohl--owner then of Kohl's department store chain and leading WI and IL grocery chain--was in a graveyard spiral, dropping in value over the decades. This mall peaked somewhere around 1970 or so--much like those in metro Detroit--and dropped precipitously since.
quote:

Northridge Mall in Brown Deer, Wisconsin is a classic example of a greyfield. As recently as 1990, Northridge had an assessed value of $107 million. However, the mall was sold in 2001 for $3.5 million and currently [2003] has one remaining retailer. However, Greyfields are not limited to one specific area and present in most markets in the U.S.



(Message edited by livernoisyard on January 30, 2008)
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Detroitrise
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Username: Detroitrise

Post Number: 1471
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Posted on Wednesday, January 30, 2008 - 4:10 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Oh, I must add insult to the injury in this.

Bel-Air did have the same demographics when it was built as 8 Mile and Woodward has now.
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Livernoisyard
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Username: Livernoisyard

Post Number: 4986
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Posted on Wednesday, January 30, 2008 - 4:20 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

No businesses would invest their own money in a major mall at that location without some hefty financial incentives and other breaks provided through the various levels of government. And even that's not enough any longer, apparently.

Instead of driving, I take the bus on occasion to get to the far burbs. The increasing amount of "for sale or lease" signs along Michigan in Dearborn catch my eye, in addition to more vacant lots where some older buildings once stood. Even Westland has those signs...
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Chris_rohn
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Username: Chris_rohn

Post Number: 392
Registered: 04-2005
Posted on Wednesday, January 30, 2008 - 4:25 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

The site plan for this thing is foul.

ShoppesGatewaySP.jpg
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Wordonthestreet
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Username: Wordonthestreet

Post Number: 158
Registered: 11-2003
Posted on Wednesday, January 30, 2008 - 9:15 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

What happened to the "lifestyle" center? This piece of s**t is just another strip mall.
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Thejesus
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Username: Thejesus

Post Number: 3383
Registered: 06-2006
Posted on Wednesday, January 30, 2008 - 9:45 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Yep, looks like nothing more than a typical L-shaped strip mall surrounding a sea of parking

Reminds me of Middlebelt and I-96 corner in Livonia where the Costco, Home Depot and Meijers are at...

Gross!
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Toog05
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Username: Toog05

Post Number: 175
Registered: 03-2006
Posted on Wednesday, January 30, 2008 - 9:59 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Yea this looks exactly like a strip mall. The Mall at Partridge Creek is more like a "lifestyle center", where you have stores on both sides and fountains, etc.
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Livernoisyard
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Username: Livernoisyard

Post Number: 4993
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Posted on Wednesday, January 30, 2008 - 10:01 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Hey! It may look like shit, but it's Detroit's (good) shit.
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Toog05
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Username: Toog05

Post Number: 176
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Posted on Wednesday, January 30, 2008 - 10:25 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

I'm quite sure when it is built it will look a whole lot better than what is currently there. If they build it like a strip mall, they better have some great architects doing the sketch work.
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Professorscott
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Post Number: 1067
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Posted on Wednesday, January 30, 2008 - 10:43 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

LY, I base a mall "surviving" on its occupancy, not whether it's occupied by stores that I prefer. But I'm not the one claiming Bel Air survived or didn't; it's just that I see lots of shops there, and plenty of cars, and a bus route that ends right at that location, and I wonder why the people who keep referring to it in the past tense do so.

By the way, that site plan looks like one connected string of stores on one side of the parking lot and several unconnected buildings on the other side. So at worst it's a "strip mall with several out lots". Partridge Creek is just a collection of several of that in one place.

Prof. Scott
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Fastcarsfreedom
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Username: Fastcarsfreedom

Post Number: 235
Registered: 11-2005
Posted on Thursday, January 31, 2008 - 1:33 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Lifestyle Centers like Partridge Creek baffle me. It's a nice mall, don't get me wrong--but it's basically a traditional mall without a roof. Big box centers are thriving because people can drive right up to the stores they plan to shop at, unlike a mall where you park and walk. Partridge Creek is a park and walk--but is open-air. I know these are growing in popularity--just wondering aloud what people think--why would the roofless design on a traditional mall floorplan suddenly be so hot--everything old is new again? Hell, if that's the case, tear the roof off Northland and it might breathe some life back into the place.
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Johnlodge
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Username: Johnlodge

Post Number: 4896
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Posted on Thursday, January 31, 2008 - 8:59 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

^ Or better yet, shop in one of the many wonderful and unique downtown areas metro Detroit has to offer.

Plymouth
Northville
Royal Oak
Ferndale
Berkley
Clawson
Detroit

Collect 'em all!

(Message edited by johnlodge on January 31, 2008)
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Thegryphon
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Username: Thegryphon

Post Number: 32
Registered: 11-2007
Posted on Thursday, January 31, 2008 - 6:13 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Anyone heard of Summit Place Mall? It is on the border of Waterford and Pontiac. Within walking distance is the Oakland County Government office campus, the seat of the most affluent county in the state (& what used to be 2nd in the nation), looking at the mall there are 3 major department stories: JC Penneys, Sears, & Hudsons (I still call Macy's or whatever it is now by the proper name). With such stories anchoring the mall itself one would think it would be thriving. Inside there is a pet store, 3 shoe stores, & some misc. independent stores. Over the yrs. Montgomery Ward has gone, Farmer Jack, Builders Sq., Kids R US, Barnes and Noble & TGI Friday's. The outer ring of the mall has survived with a Sams Club and some other stores. Now to revitilaze the mall there is a plan to build a minor league baseball field (With the Silverdome just down the road). Now how can a mall like Gateway survive with 1 anchor & on 8-mile (I have nothing vs. the thoroughfare but it does contain some negative conotations). Think twice about the developers' caution in development and applaud it.
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Charlottepaul
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Username: Charlottepaul

Post Number: 2288
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Posted on Thursday, January 31, 2008 - 7:04 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

"I'm quite sure when it is built it will look a whole lot better than what is currently there."

Actually (and unfortunately) it is usually the other way around. More often the architects' renderings (be them site plans or anything) are the best that the project will ever look (for the sake of presentation and to sell retailers on the project). Things usually get VE'ed (value engineered) out as the design goes further along and engineers remove any attempts at creating anything more than 'boxes.'
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Fastcarsfreedom
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Username: Fastcarsfreedom

Post Number: 237
Registered: 11-2005
Posted on Thursday, January 31, 2008 - 7:13 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Thegryphon--Kohl's also continues to operate at Summit Place. It's an interesting case, and it's fate is not unlike the fate of several malls across the country. Summit Place started into a precipitous decline around the time Great Lakes Crossing opened--in fact, major/full-line department stores--the one thing GLC lacks, is all that has truly survived at Summit Place. Once the spaces started to empty, the collapse of prosperity at the mall became tidal. The outlots emptied--and bad luck didn't help as retailers like Ward's, Service Merchandise, HQ and Farmer Jack closed up shop and left huge vacancies in the area.

The Woodward/8 Mile development is/was never intended to be anything like Summit Place. General Growth is a good operator--they own and manage both Lakeside and Southland, and have invested money in both. That being said--with the current softness in the economy I doubt they are too eager to dump a bunch more square footage into a market that already has a high vacancy rate--particularly in light of the fact that this development is planned for the City of Detroit proper.
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Johnlodge
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Post Number: 4921
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Posted on Thursday, January 31, 2008 - 7:56 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

I used to spend a lot of time at Summit when I was younger. But look at the location. No real expressways nearby to feed it at all. Telegraph and M-59 are the closest you come. Compare that to thriving malls like Twelve Oaks and Great Lakes Crossing and Somerset, which you can get to fairly quickly from many places.

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