Are offices the best use of ground-level storefronts? Some in Old Town think not

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With Old Town looking to expand in 2017, some residents are concerned with businesses renting and buying out recently-closed restaurants or retail stores near them and using the ground-level storefronts for office space.

Old Town is filled with vibrant, exclusive, and unique shops. However, there has been some controversy when there is a vacant building that recently just closed, as some businesses tend to rent out that building for office space instead of letting other future shops rent or buy it out, according to some residents.

Andrea Kerbuski, a frequent Old Town customer, wishes there were more different options such as quick restaurants and other different shops. She hopes that some businesses will try to transition office spaces to upstairs spaces to create more retail and restaurant space at the street level.

“There are create public relations and creative firms here, but they take up so much retail estate as I’ve noticed as shops close, businesses will expand their office space,” said Kerbuski. “Old Town has become more vibrant and more shops and businesses are now in the area. I love the variety we do have, I just wish there were more restaurant options and more space for even more shops.”

Maggie Vance, a staff member at Retail Therapy, says there is an incentive to get businesses down here because many building owners 20 years ago signed long-term leases to office-based businesses in retail-based spaces.

“I think these leases are starting to end, which is why you are seeing more retail spaces,” said Vance. “I think now that building owners see a demand for space, there is more incentive to remodel and restore buildings.”

The business association set up a lot of events for Old Town, however advertising is lacking and many people just do not know what is really happening, according to Vance.

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The Standard, a local salon, witnesses many closed shops being taken over by other shops after they shut down for office space Photo by Joshua Chung

The mission in Old Town is to be able to help businesses by having a vibrant, and eclectic commercial business and attract consumers into the area. Board members and residents across the town try to reach out and involve our residents, not just the businesses as the main focus on the historic preservation, business recruitment, and provide streetscapes throughout the community, according to the secretary of the Old Town Commercial Association, Ariana Gibbs.

The OTCA does not own any buildings and does not govern to whom landlords lease. Old Town is a community of commercial businesses looking to connect with their customer base, according to Gibbs.

“I can tell you that our occupancy rate remains a high rate and that our current business owners moved their locations to Old Town to become part of the community and experience the benefits of the area,” said Gibbs.

Since Old Town does not govern who leases each space, it is undetermined if businesses are affected by this; however, Old Town has been thriving and the community has become more and more popular each year. People enjoy being at Old Town in every capacity from work, to shopping to entertainment, according to Gibbs.

Brent Barr is a professor at Ryerson University and an expert in small business management believes that it can be good and bad if businesses have more retail space because it will attract more customers to the area.

A string of retail businesses may do better together as consumers know that is a good retail spot and head there. However, the office space could also draw people in and the other remaining businesses could “feed” off the office customers, according to Barr.

“These businesses are also known as ‘parasite businesses’ as for example, many malls have converted an open space on the second floor to education classrooms for a nearby college or medical or other office space,” said Barr. “This brings in customers that the businesses on the main floor can ‘feed on/overtake.’”

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Located on 204 E Grand River, until it became Old Town River View Lofts, this was a vacant building that could have possibly been used as office space Photo courtesy from Google Images

Any company will purchase or lease any business location they feel would help their businesses. It is not odd to see on a streetscape when businesses choose a location for office space. Lots of lawyers, massage therapists, and other medical services will tend to set up on small streets. Overall, all businesses want access to their target market and if that would allow that to get them, then indeed it is a smart move in that situation, according to Barr.

“No business would say ‘maybe this space would be better for retail’ if it will work for them,” said Barr. “Altruistic is something in business that is not really there.”

Former Old Town Commercial Association member and professor at the Michigan State University Broad College of Business Ken Szymusiak explained his past experiences of these kind of businesses. Szymusiak previously lived in Old Town and owned a business with his wife and noticed that there is very little any government or board can do to stop the free market.

“Landlords will always try to fill space as quickly as possible as to not carry an empty building,” said Szymusiak. “The key is to try to work with landlords so they fully understand that it is better to think long term about the implications the office space will have on the main street as opposed to trying to fill it as quickly as possible.”

In an area like Old Town, there are a lot of creative agencies that want to locate offices there and not as many people in Lansing are spending money at retail locations like they do in some other more affluent areas. Which means it does happen on occasion, according to Szymusiak.

“It’s important to note that no one is stopping restaurants and retail from opening, as it is all about timing,” said the business expert. “It is all about timing, and landlords shouldn’t be forced to carry vacant space if they do not have to as it is about finding the right user at the right time.”

It is a difficult balance if there is a benefit if these businesses buy these vacant buildings and use it for office space, because many offices can provide much needed traffic to the retail spots if done. However, too many offices and you do not get outside visitors stopping by because the area isn’t vibrant enough with different retails and restaurants, according to Szymusiak.

Rick Preuss, co-owner of Preuss Pets and Vice President of the Old Town Commercial Association explained from his experience that if he had the opportunity to buy a vacant building and use it for office space he would do it for his business. Along with that Old Town is not trying to separate everyone, it is trying to bring everyone together and work together.

“It’s more about trying to include everyone in Old Town neighborhood and make sure you are part of a welcoming group,” said Preuss. “There is a regional attraction for being in Old Town that businesses want for a square footage.”

It also is a process and to sure that the business owner or retail owner is suited for Old Town and the type of business will succeed in this area, according to Preuss.

“There was a bakery place near me, and I talked to the guy and said he had wanted to use it for retail space and several months in there was not a lot of attendance,” said Preuss. “We don’t want to mandate when that space becomes retail, instead retailers collectively have conversations with individual residents that want to be a part of Old Town.”

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Bloom Coffee Roasters took quite some time to process and how to make it fit in the environment Photo courtesy by Bloom Coffee Roasters

Tim Daman, current President and CEO of the Lansing Regional Chamber of Commerce, stands by the saying “business is business” and an investment into properties that are vacant is good for the area whether it is Old Town or anywhere and believes it is not a very wise economic decision to leave vacant buildings open and have to wait for the next retail owner to buy that building out.

“Whether you are putting a marketing or creative advertising agency into a space in Old Town vs. retail, you are providing an economic investment into that town,” said Daman.

It does not hurt the business in any way when they do buy the vacant building because investments and re-development is critical to economic growth whether it is Old Town, Lansing, or anywhere in the country and there is no real reason to have empty store fronts just vacant when you can use it for other businesses, according to Daman.

“Having these kinds of businesses is what has made Old Town as vibrant as it is, as you have a vibrant retail scene, restaurants that are opening and thriving, and even other small businesses that are supporting those shops,” said Daman.