The Detroit Regional Chamber

2. The Detroit Regional Chamber • Largest chamber of commerce in the United States, with over 20,000 members • Established 1903 • 90 staff members The Detroit Region The Detroit Regional Economic Partnership • Economic Development Arm of the Detroit Regional Chamber • Represents 10 counties and the City of Detroit • 120 private sector investors

3. Our Experiences with Big Box Retail • The Detroit Region spans rural farmlands and the nation’s 10th largest City • Home Depot, Lowe’s, Costco, Best Buy, Kohl’s, J.C. Penney, Target, IKEA and many others are expanding in our area • Bankruptcies and store closings: Jacobson’s, Montgomery Ward and Kmart Downtown Detroit Borders Cabela’s Superstore, Dundee Michigan

4. America’s Top Big Box Retailers Big Box Trends • Employment growth vs. rising interest rates • Dollar stores • Grocery chains: increased competition from specialty stores • De-Malling • New urban store designs • Retail real estate is hot investment

5. Big Box Basics • Big Box store footprints = 20,000 to 200,000 square feet • Parking field typically 4 to 7 times store footprint • Wal-Mart, Target need 15-16 acres minimum 130,000 (Typical Target, Costco) 20,000 (Staples) 57,564(Football Field) 200,000 (Super Wal-Mart, Sears Grand) 300,000 (IKEA)

6. The Players Driving Development: • Retailer’s regional real estate manager • Commercial real estate brokers • Real estate developer • Big box stores typically partner with a local developer to find and develop sites in a market • Retailers often sign exclusive representation agreements with commercial real estate brokers to find new sites and negotiate deals Network with the local commercial real estate community. Commercial real estate is a “relationships” business

7. Development Process Overview

8. What You Can Do: Prepare Information Site Inventory Trade Area • Catalog of potential big box sites • Zoning, price, site plans, contact information, utilities • Area from which store can draw customers • Maps / aerials with competitors’ locations Demographics Needs Analysis • Population, households, Income, ethnicity, trends • Major employers, and important news (e.g., new plant opening) • Daytime population • Where are we underserved? • Categories of retail “ We rely on demographics to decide where to go…where is business available, and where do we need to be ”– John Mullen, Home Depot’s Northeastern Region Regional Vice President

9. Example: Diagram of Existing Big Box

10. Example: Drive Time Map

11. Ingress & Egress Parking Field Traffic counts Frontage Truck docks & turnaround space Pylon Sign Outlot Bldgs

12. Sewer & Water Mains 4-Lane Divided Rd. High traffic count freeway interchange Freeway Visibility Potential wetland?

13. Incentives and other tools • Special Improvement Districts (SIDs), Special Services Areas (SSAs), Business Improvement Districts (BIDs) • Brownfield Redevelopment • Federal or State Economic Development Zones (Empowerment Zones, Enterprise Zones, etc.) • Special Taxation Districts • Community Development Block Grants • Tax Increment Financing • Economic Development Administration Grants • SBA 504 Loans • Tax Abatements • Writing down cost of land • Public-Sector Leases • State & Local Infrastructure Grants • Matching Funds • Revolving Loan Funds • Bond Issues • Historic tax credits • Public loan guarantees • Nonprofit grants and assistance (see www.lisc.org, the Local Initiative Support Corporation)

14. Urban Big Box: Unique Challenges Perception Gap Cost Gap Top Urban Challenges Identified by Retailers • Crime/ Percieved Crime • Insufficient concentration of retailer’s target customer • Lack of consumer purchasing power • Potential shrinkage • Rent • Buildout/Rehabilitation costs • Site identification • Inadequate parking • Higher operating costs • Construction and development costs Source: Development in Underserved Retail Markets, The International Council of Shopping Centers

15. Our Experiences with Big Box Retail Hidden Demographic Strengths • Multigenerational Households • Median household income vs. concentrated buying power • Detroiters drastically underserved. Half-hour + commutes to suburban shopping centers common City of Detroit Taking Proactive Approach • Mayor Kilpatrick appointed Director of Development, a new cabinet-level position • Current administration and last administration sent delegations to Las Vegas ICSC conference Remaining Hurdles • $70 million, 250,000 square foot shopping center currently planned in Detroit involved acquisition of 81 homes • City of Detroit owns 38,000 vacant parcels. Work continues on resolving legal obstacles to redevelopment

16. Further Resources The International Council of Shopping Centers (ICSC) is the nation’s leading shopping center industry association. The ICSC’s “Alliance Program” helps foster relationships and strategic alliances between the public and private sectors to help stimulate growth.www.icsc.org The Urban Land Institute is the nation’s preeminent multidisciplinary real estate forum. The ULI publishes in-depth research reports and maintains a comprehensive library of real estate industry informationwww.uli.org Industry News Demographics & Maps • Shopping Centers Today • Crittenton Retail News • Shopping Center Business • National Mall Monitor • Detroit Regional Chamber Research & Information Center • 313.596.0365 Lead Generation • Chain Store Guide • Retail Tenant Directory