Retail Chat

In Business Review’s Retail Roundtable, local business owners explain the A2 retail scene, and the consensus seems to be that downtown will do best as a kind of walkable lifestyle mall for suburbanites seeking an offbeat shopping experience. “Retailers are selling to who their customers are: People coming from Oakland County for the day.” Or Bowling Green.

70 Responses to “Retail Chat”


  1. I love this: Davidson “Davidson: The Chamber does nothing. Zero. That’s my biggest complaint with the Chamber.”

    …that’s actually a fairly significant complaint, isn’t it? And then there’s the fact that he has smaller complaints beyond the fact that they do nothing. Which implies that they’re like the Antimatter of Commerce.


  2. Congrats to Business Review for this interview series on downtown! I am concerned at the large recent drop in foot traffic - over the past few months.

    Considering that Business Review’s normal coverage is “business boosterism,” I’m impressed with their willingness to explore the continued crumbling of the existing downtown.


  3. Checking in from Evanston, where retail is leasing for only 18-20 dollars a square foot. Businesses include hardware stores, a downtown Whole Foods, non-chic bakeries, a CVS and used book stores, all within walking distance from Northwestern’s campus. How does this city of 74,000 do it? Maybe it has something to do with the dowtown being more than 4×5 blocks and their lack of fear of 10-story buildings.


  4. “*Pohrt*: Look at what the opposite is. I was in Boulder last fall. Boulder has a greenbelt around it that should be the envy of anybody on the planet. Then they have what they describe as a draconian policy on building height. When I was there, the announcement came that the average price of a home in Boulder was a half-million dollars. And the only people I saw were white people. It’s a gated community. People drive in for 40 miles away to work in the service jobs. That’s what happens when you freeze everything. I would not want to raise a family in that community. … Everything changes. You can put your head in the sand and pretend it doesn’t.”

    Gee. Where have I read this before? And how long ago on AAIO did I read this?

    *Could any of you start your businesses today?*

    *Hodesh*: Not downtown. It would be seen as a frivolous use of property. The consequence of housing development and all development is that it produces space that after the banker and lawyer and architect and everyone gets their hands in it, it costs $30 per square foot to rent. Small businesses can’t pay $30 a square foot … That’s why it ends up chain stores, or bars and restaurants.

    Hmmm. Where have I read this before? AAIO maybe? ……….Downtown is dead for small business.

    *What messages do you offer to city leaders?*

    *Anderson*: There’s a sense in Ann Arbor that everything is going to be fine. That you don’t need to nurture the downtown, you don’t need to promote the downtown. People don’t understand the fragile nature that we’re talking about. … If everything isn’t as great as it looks as 8:30 on Friday or Saturday nights, it needs to be promoted and nurtured and taken care of in order to maintain what we want it to be in 15-20 years.

    We are L-U-C-K-Y in that our businesses, like Old Town, has grown every year, and we are, unlike many businesses in Ann Arbor coming off of our best year ever. The reason has little to do with what we have done operationally, and a heckuva lot to do with the change in demographics……more grad students and ancillary staff/businesses for UMich., replacing other residents. Like Old Town, we are fortunate to appeal to that niche.

    Others haven’t been so lucky, and now after all my rants on AAIO and Arbor Update for the last few years, the writing is finally on the wall, and we all know that I was right.

    I’m not writing this in the “nanny-nanny-boo-boo” vein, or to try and show how smart I am…..on the contrary. I’m trying to show how completely *predictable* these events are, even to someone who is as daft as I am….

    The sad thing is that after all of the Calthorpe meetings, I’ve started to see expressions on decisionmaker’s faces that shows that they understand that we should have had these meetings/consultations/discussions about 15 years ago. It’s really a shame. You can’t turn back the hands on the clock, and you can’t rewind downtown rents to below the high 20’s and low 40’s per square foot. Local business is over and done with, save the few that charge a super-premium for their goods. Gentrification and chain stores…..and it was all avoidable………

    The people in Ann Arbor who have tried for years to fight change and new development downtown are precisely the people who have wound up changing Ann Arbor the most.

    Lame.


  5. I go downtown a whole lot. But my partner and I don’t go to Main Street. There’s nothing there for us. We walk past the stores on our way to the Michigan Theater to see a movie. Or we walk past Main Street on our way to Kerrytown to the Farmers’ Market, Sparrow Meats, and Monaghan’s (sp?) Fish, and Everyday Wine Shop.

    When do we go to Main Street? We go to Main Street when we want to buy a scarf for my mother-in-law for her birthday. That’s once a year. Or we’ll go to the Arc for a concert.

    Sometimes we go to Acme just b/c it’s got fun stuff or Three Chairs to buy a lamp. And we love going to Downtown Home and Garden, and I try to buy most of my gardening supplies from there.

    But mostly Main Street isn’t set up for me, a citizen of Ann Arbor. And that’s sad.


  6. I would have to agree with Young OWSider - when I’m in Ann Arbor (and extrapolating: if I still lived in Ann Arbor) I wouldn’t find myself on Main Street all that often … driving from where my parents still live - when I’m visiting there (out by Vets) - I guess I consider State and Liberty as my downtown, and I’m much more likely to spend time there - Michigan Theater, Shaman Drum, Encore, that used bookstore up on the east side of State just north of Liberty … that’s where I’m spending my money, apart from rent or food.

    But rent - that reminds me - I couldn’t even afford to live in Ann Arbor…

    I would be one of those people coming in from Ohio for the day…


  7. Yes, Todd, we have heard it before. Enough already. Time to move forward rather than complain about the past. We don’t know what would have happened had lots of projects been built twenty years ago (do you really think a city full of One North Mains would have been good?). We are here now, projects have been approved, we will see in a few years what the effect is.

    The owners of Ehnis & Sons and Afterwords had interesting things to say about what happened to their businesses. Both had their best years in the 1990s (yup, post mall, pre-downtown residential boom). There are more residents downtown today than ten years ago. So something else is changing. Afterwords saw that people don’t browse anymore. They want to come in, get a recommendation, buy a book, and get out. It wasn’t that kind of store. Amazon has become the way people shop for books. Ehnis & Sons carried a fairly small collection of specialty items–almost all for men. I can tell you why people stopped shopping there in one word–Cabelas. The specialty stock which had worked for Ehnis for so long, was suddenly available somewhere else, cheaper, they threw in a fish-pond, food, and clothes for the little lady. It is no longer the malls that are the “enemy” but big-box/destination stores and the internet.

    Online shopping is changing not only how people shop, but what they expect from a local retailer: “I bought this book, tell me what else I would like” takes the place of “where is your gardening section.” Big box stores have made “cheap” the holy grail. Local businesses are going to have to be creative to compete (more open hours, serve snacks, have a public bathroom, make good use of e-mail lists, have a great website, give people value-added service, delivery, etc., etc.). Downtown Home and Garden is a great example of a retailer doing everything he can to keep and bring in customers. Sure, more people downtown will help, some. But it isn’t the magic bullet. There are plenty of people who live downtown who rarely shop downtown. Many people in Ann Arbor don’t even know the businesses downtown or what they offer. It is unfortunate that the Chamber does not work harder for the downtown. It seems that the merchants are going to have to do it themselves, but it isn’t a lost cause unless they want to sit around and blame it all on something that happened (or didn’t happen) 20 years ago.


  8. “Time to move forward rather than complain about the past.”

    Yeah, I know. You’re right. My apologies….frustration from someone who wasn’t listened to. I should have left well enough alone.

    I wanted to comment on the roundtable, though. You just have to remember that there were an awful lot of people here at AAIO years ago (including yourself) who vehemently disagreed with me when I said that downtown was in crisis. You know, the “our downtown is vibrant” crowd. I tried to explain that it isn’t, and now everyone knows what the real deal is after hearing from business owners besides myself (in other words, I’m not just some crazy moron, I now have corroboration).

    But, the important thing was that I was hoping that the city would react to this crisis, and it did (Calthorpe). Kudos to the Mayor, Council, and citizens for acting positively.

    JulieW “There are more residents downtown today than ten years ago. So something else is changing. Afterwords saw that people don’t browse anymore.”

    Well, first of all, there are only a handful more people downtown than there were ten years ago (and zero growth in the last five), but secondly, enrollment at UMich, and enrollment alone has far outpaced any population increases in dowtown or Ann Arbor as a whole. In other words, students are replacing the rest of the population. Further, if you take a look at the change in the household income spread, you’ll see that the town is getting wealthier. These people have different shopping habits.

    But as to your charge that us “Local businesses are going to have to be creative to compete”, that is true, and many of us are…..but what is at the heart of all my perceived complaining (again, sorry) is that it’s become the case that the most ‘creative’ and most intelligent thing that an Ann Arbor small business can do is to, well, move. In other words, it’s become common for the problem to lie in the location (or changes therein) rather than the business model.

    What good does moving do for the city as a whole? We’re forcing businessowners to come up with a bad solution to some fixable problems…..we should be trying to help them stay here.

    So when I gripe, I’m not griping from the perspective of someone who feels personally slighted, but from the perspective of an Ann Arbor resident who loves places like Ehnis & Sons (all my overalls and boots have come from there since before we opened), and hates to see it go.

    And as to your assertion (I am assuming that this was directed at me) that it isn’t a lost cause unless I want to sit around and blame it all on something that didn’t happen 20 years ago……before I even starting participating here at AAIO and later on Arbor Update, Scott and I made a complete about face with our business plan because we knew what was coming. As a result, we are prepared for whatever comes our way in the next few years (knock on wood).

    …..so I’m not complaining from the perpective of a small businessman who’s got a case of sour grapes because he can’t make things work; I’m coming from the perpective of a guy who loves places like Old Town, Anderson Paint (all our non-toxic paint comes from there), and Downtown Home and Garden, and has been pissing in the wind trying to explain to downtown residents that if we don’t build densely, we’re going to lose some of these gems. Just as it’s not fair of me to completly blame residents for business failures, it’s just as unfair for residents to take zero ownership of the economic environment that they have created by stifling growth.

    I’m sure you saw that, without exception, all of the roundtable business people (including Hodesh, who according to you did so many things right) couldn’t open another business downtown if they wanted to.

    So the question to you, Julie, is how do we change this unhealthy environment?

    My answers are to proactively go after several anchor stores like Nordstrom’s and locate them on the ground floor of new, dense construction downtown, and to fight for more residents. This will help stabilize the customer base downtown. Happily, this perfectly corresponds with my views on environmental sustainability….

    What do you think we should do, Julie?


  9. We would have loved to have bought a place downtown when we moved here…the only 3 bedroom loft/townhomeswere so horribly overpriced (and most only in the design stages) that it made it impossible. Now I have to get in my car to go anywhere (that would be the second car we had to buy in order for my husband to get to work and not have to spend an hour waiting on public transportation that doesn’t show), but the real irritation is that not everyone has the Ann Arbor dream of owning a single family home with grass (god, there is so much damn lawn in some parts of this city, it’s ludicrous). I think Seattle made the huge mistake of taking families out of the urban equation when they built out Belltown and the new Lake Union areas and only built 2 bedroom spaces. I’m sure it pencils out to be better for the builder to build smaller spaces, but it doesn’t do much for encouraging folks to consider living downtown when they move into the family way.

    I’d love to see more density downtown, including more accessibility for folks in wheelchairs, (how many bathrooms are accessible in the downtown area? crazy). But I guess that’s another issue…


  10. One other problem here, people - population density downtown requires state or city intervention in terms of subsidies, price (and rent) controls and even the encouragement of pedestrian and bike zones. Look at any similarly-sized city in America or Europe with high inner-city population density and you’ll see what I’m talking about.

    No one in Ann Arbor who makes the decisions was willing or will be willing to go that far: for all of its left-wing credentials, the Ann Arbor attitude towards downtown over the last 30 years (on the part of the decision-makers) was laissez-faire free market capitalism. Not that there’s anything wrong with it, but let’s just call it what it is. No one wanted to think outside the box.

    Now, in the past 5 years, it appears, we sense something’s wrong, and so we’re going to go for the short-term solution: build for the rich and childless, and get a lot of money up front when you sell those places (e.g., down on First St.) with very little taxes and return rewards later on.

    Dumb-dumb-dumb-dumb … DUMMMMMMMB!


  11. According to the roundtables in Business Review, downtown businesses have (at least) two serious problems: high rents, and lack of harassment-free parking. Calthorpe suggests a long-term indirect solution to the high-rent problem: built giant buildings and hope for a “trickle-down” effect that will result in lower rents.

    I suggest a couple of things that will bring direct relief, immediately. The DDA could stop giving money to developers, and instead give rent subsidies to deserving locally-owned businesses. With regard to parking, the DDA could say that all parking is free for the first three hours.


  12. I am sure this has all been mentioned here before, but Portland, Oregon has a very ingenious city design plan modeled on a hub-and-spoke approach (I am not a city planner, so I am sure there is a more elegant way of describing it). The downtown is the hub with all transportation leading into and out of the city center (light rail, bike paths, boulevards for more serious traffic). The financial district, great restaurants, retail, etc exist downtown and the city is full of folks all during the day and night. The city neighborhoods are supported by “main streets” and “town centers” which support the more daily needs of residents (dry cleaning, food shopping, coffeeshops, parks, etc). The standard that the folks at the city used to talk about was the “orange juice test”…if you had to get in your car to go get orange juice on a Sunday morning, then there was something amiss with the city planning. Portland also has (or had, I haven’t lived there in 5 years) an urban growth boundary, a progressive greenspaces planning program, and some of the best affordable housing planning I have ever seen. The newly developed parts of downtown fall into the “expensive and not totally family friendly” category, but are better than many larger cities.

    Portland was a wreck of a city 20 years ago. Developers wanted to level all of the beautiful old buildings that made it unique and put up nasty trammel crow cookie cutters (there are some there, shudder.). But Bill Naito, a very smart (and brave) man, led the campaign to make retrofitting the city’s old building stock and marrying it with a vision of a more healthy, liveable city a priority for the city. The result is a city that appreciates it’s heritage but lives in the reality of changing dynamics of life for its residents. It seems to me that it doesn’t have to be one way or the other for A2.


  13. There is so much to say on this subject but … The long and the short of this is that people have to want to live and shop downtown. The shopkeepers have to want to have a business downtown. Clearly there was not a lot of optimism at the Roundtable. When will someone in this group decide that they have had enough with downtown?

    Take the Buschs in Dexter. Dexter does pass the ‘orange juice test’… today. But Buschs, the locally owned and operated grocery store, is moving out! They can make more money on the outskirts where the store can be bigger and the parking lot can be bigger and the profits can be bigger. (I think there is a difference between loosing money and bigger profits but I have no idea which it was). Whole Foods made a similar move out. (OK they weren’t downtown but they moved the wrong way, they should have moved downtown.) Arbor Farms recently relocated; was downtown considered? I assume not as downtown has no parking. The vicious circle again

    The Dexter example shows me that the people of Dexter don’t want to shop downtown or they would have thrown a fit.
    Todd suggested reaching out to Nordstroms etc. but they won’t bite. They will take one look and pose the following, “Why do we want to locate downtown when your own local businesses are packing up and heading for the freeway?” If the downtown is going to be more than ‘Restaurant Row’ and a day trip destination for Oakland County shoppers we will have to make it ourselves; local businesses first. I am also reminded of small unique towns, in the East and New England, that have such character and vibrancy that the chains and the corporate stores want to sink their teeth in, but the communities are so determined to keep what they have that they force the big boys to adjust their corporate standards to the local environment. We do not have that leverage available, we would be groveling, and we would get walked all over us. This is a local issue. We will have to be content to pay a little more at the downtown grocery and maybe a little less at the pump and we have to willing to park and walk a little.

    But there is so much to say…


  14. What is it with the myth of no parking downtown? I hear from folks that the parking problem is a bigger issue during the daytime throughout the week rather than the weekends. Is this the case?

    On the rare occasions we drive downtown (usually with parents who can’t make the walk downtown) we never, and I mean NEVER have a problem parking. Is it that people don’t want to park in the practically wide-open garage there on Ashley that’s a block north of Huron? There’ll be people lined up to park on that surface lot on Ashley/Washington/First/Huron with the Full sign all lit up, and I guarantee that they’d get parking with no problem at the lot one block to the north.

    It is good that council is trying to focus on downtown and its vitality. And I hope it’s not too little too late. But what is the ultimate goal? Is it to have enough people downtown to make a grocery store/drug store/hardware store possible? According to some pro-density councilmembers there will never be a grocery store downtown–and that’s from councilmembers who *want* more people living downtown.

    I guess if we were all starting from the same page it would be helpful. And I hope Ann Arbor can get to a point where we have an overall vision for this town–from dowtown out to the city limits.


  15. Daniel: “for all of its left-wing credentials, the Ann Arbor attitude towards downtown over the last 30 years (on the part of the decision-makers) was laissez-faire free market capitalism.”

    Ann Arbor has not been a free market. If it were a free market, there would be no restrictions on building heights, sizes, or the number of new buildings that would have been allowed over the past 30 years. The market has been artificially restricted, which is the opposite of what you are saying here.

    cb: “If the downtown is going to be more than ‘Restaurant Row’ and a day trip destination for Oakland County shoppers we will have to make it ourselves; local businesses first.”

    Cb, rents are currently in the $30 per square foot range in the downtown area. The roundtable participants, all proven businesspeople in the downtown area, explained that at that cost, their business models would fail. So, even if you disagree with my theories as to why this has happened, you have to admit that this is not an environment that is conducive to small, local business activity. How do we change this? DaveC and others seem to think that increasing the potential customer base through new residents isn’t the way to go, so what do we do?

    And as to your description of small unique towns in the East and New England, do these towns have one of the largest public universities in the country located in them? You have to admit that this is a pretty significant contributor to the business environment. These are unfair comparisons.

    As to attracting Nordstrom’s and other such anchor stores, our friendly neighborhood Calthorpe retail lecturer already explained that these stores do indeed want to come downtown. If you missed his lecture, his firm is essentially a corporate site selection agency that helps corp’s to find locations for new stores…… so it is up to us as to whether or not we want to bring them down here. They want access to the Ann Arbor market, this much we know.


  16. “…our friendly neighborhood Calthorpe retail lecturer already explained that these stores do indeed want to come downtown. If you missed his lecture…”

    No need to miss anything–both of his lectures are available on DVD at the library. Just do an author search for “Gibbs, Robert” on www.aadl.org.

    OK, so “Robert Gibbs Discusses Retail Economics And Downtown Ann Arbor Businesses” may not sound like the most exciting movie-watching ever, but I thought he was actually pretty interesting.


  17. How does the growing size and building scope of the university negatively affect the tax base here? It seems like every time the university takes away land or another building, being tax exempt, they might increase the expenses on the tax paying public… I know nothing about this, but looking at a map of downtown (and beyond) and seeing all of the space that the university owns, one has to wonder… anybody know? How does it all pencil out?


  18. “There are more residents downtown today than ten years ago. So something else is changing. Afterwords saw that people don’t browse anymore. They want to come in, get a recommendation, buy a book, and get out.”

    With respect to Afterwords, what I think happened was the Internet. In the 90’s, I bought quite a few books there, but I gradually bought fewer even though I now buy more used books. Now, I can find and order whatever used book I want in a few seconds, so I don’t go wander the shelves hoping a book I want will happen to be there.

    While I’m posting, I just ran across an excellent article about the relationsip between real-estate and city life (with quite a lot relevant to AA):

    http://www.nytimes.com/2006/03/05/magazine/305glaeser.1.html?ex=1299214800&en=58a9dac06ddaf7af&ei=5090&partner=rssuserland&emc=rss


  19. The university is also the #1 rental tenant in the city.


  20. Downtown is always in flux. It has been in some sort of crisis since I remember. Some years are better than others. Growing up, I used to shop at Klines, Jacobsons, Kresges, Kiddie Korner, Capitol Market, and Marti Walker. We ate at Indian Summer, the Whiffletree, Maudes, the Bagel Factory, the Sun Bakery, the Quality Bakery, Manikas, Bimbos, the Roundtable, the Pretzel Bell, the Old German, the Oyster Bar and Spaghetti Machine, the Rubiyat, and Lovin’ Spoonful. We watched movies at the Fifth Forum and the Campus Theaters. All of these and many others are gone now. Businesses come and go. Growing up, there were far more chains downtown than there are now. After the mall went in, downtown businesses changed to smaller, more locally-owned stores. Now people want the chains back in and malls are having a hard time. Retail is always going to have an ebb and flow and the lucky businesses are the ones who can see and change with the times. Some of the changes are good and some are bad.

    “What do you think we should do, Julie?”
    Well primarily, I would promote downtown. Make it a destination to people who live in Ann Arbor, to people who work downtown, and to people from the ‘burbs. Tell people what is there and why they should shop and live there. Dispel the rumors that you can’t get anything downtown (for instance–the Jules owner said that Acme Mercantile is “the only place you can get aspirin downtown.” Well that is just wrong and this is a business owner saying that). I recently was part of a conversation where a woman said “I just don’t think of shopping for women’s clothes downtown.” We need to change that perception. Make sure people know where parking is and that they can count on it (Ann-Ashley and Liberty Square usually have spaces). Tie-in with special events around the city–Conor O’Neills is having their Shamrocks and Shenanigans run on March 12 and in past years, almost no other stores are open when there are hundreds of people milling in the street–that is silly. The University is doing a big exercise push and over 8000 people have signed up–have Main Street tie-in with that “if you walk to lunch at Gratzi, you can get 40 minutes of Active U exercise time.” Extend hours of stores downtown (at least to 7:00pm) and publicize it. Open businesses like florists at 7:00am so people walking by can buy flowers for work. Have one night (Tuesday or Wednesday) be free parking night. Have special events like “Girls Night Out” where a group of three or more women get special savings at certain stores and free appetizers or a free drink. Or “Romantic weekends” that include a night or two at a hotel or B&B downtown, food, coupons, and a show. Or “Live downtown” nights to give people a taste of what it would be like to live downtown. How about wine or beer tastings at local restaurants. Create on-line or mailed catalogues featuring local retail during the shopping seasons. Have a “personal shopper” service or “stump the shopper” to see what can be bought downtown. Use e-mail and websites to much better effect. I could go on and on, but there are a lot of things that can be done to promote downtown so that residents will shop (many people who live downtown don’t shop there) and it becomes more of a destination. This can happen now, not “once we see if people move down here.”


  21. Julie, you should send these suggestions to Susan Pollay at the DDA. I’ll send her the link.


  22. However, we cannot deny the lasting impact that inflated rents are having on business, which makes the present situation distinct from previous periods.


  23. Dale, that is true, but is there anything that can be done about that? Rent inlation is a huge barrier to certain types of stores. That is what killed Decker Drugs. They had their best year the year before they closed, but toothpaste just doesn’t have the same profit margin that food and drinks do. Our success in downtown is a problem in this case. Downtown Ann Arbor is perceived as such a desirable retail market that landlords can get those sorts of rates. I would like to hope that local landlords wouldn’t charge as much in hopes of preserving local businesses downtown, but I’m not sure that is realistic. That said, I do think there are ways to make small, local businesses more profitable and viable. Everyone has a stake in keeping downtown “unique.” Ironically, that is the very thing that makes it so desirable.


  24. JulieW, those are some fine ideas, but you have to understand that each one costs money, and each of them entails risk (save what you’d like to the the Chamber do).

    For example, let’s take you example of the flower shop opening at 7am. You have to have staff in an hour or so early to set up shop for the day. You have to turn the lights and heat/cooling on. What’s your guess on margin at a flower shop? Now use that number to figure out how many $$ in flower sales you have to sell *every day* of the year in order to just break even. If you add in advertising of the earlier opening time, the nut grows exponentially.

    I’m not trying to nitpick, but you have to remember that the situation is currently really, really precarious for many of these businesses. Extending your hours, giving away things for free, and even light advertising means that if you don’t get the volume to support these things, your business is done for. All of these options: advertising, extended hours, giveaways sounds an awful lot like SOP for chains, don’t they? Which is why chains don’t have as much of a problem moving into the current environment. You need more capital, and an ability to absorb risk to do many of the things that you listed.

    The real problem here is that the increase in rent/fees/other costs don’t match up with the business opportunities in Ann Arbor. As an example, there’s a recent article that put’s Amer’s downtown rent at $13,500 per month (yikes!). He has another store in Brighton where his sales volume is higher, and his rent is 1/3 of what it is in Ann Arbor. Essentially this means that Amer is throwing, at the very least, ~$50K out the window each and every year for the pleasure of doing business in downtown Ann Arbor.

    Your solution for Amer seems to be that he needs to spend his way towards making up the difference in volume and costs. I want to be clear and say that you may indeed be correct, and this is precisely what needs to be done downtown……but a small business is much less likely to be able to not only increase their spending, but to also increase their risk. And, of course, the gulf between Amer’s two locations is in the tens of thousands of dollars. That’s an awful lot of money to make up…..


  25. Todd, I know some of these things cost money, but many don’t. Advertising and marketing are imperative, not optional. A judicious use of e-mail to connect with your customers can have a big effect for free. For example, sending out e-mail notifications of sales. Virtually no money involved. Right now, Voila is having a 70% off sale, Tortoise and Hare is having a 40% off sale, Adorn Me is having a 20%-70% off sale, Suwannee Springs is having a $20 shoe sale. Those kind of sales are enough to bring people in, if they know about it. Even better would be to not have this sort of inventory left in the spring. So how about having a 20% off sale in January and letting everyone know about it. Take advantage of crowds on the street by tying offerings to events sponsored by others–very little cost. Web pages from the area associations that are updated and accurate–the pages already exist, but need to be updated and proofread. Pooling resources to do an online catalogue that is e-mailed to local neighborhood groups or store lists–less of a cost than losing potential holiday sales to the internet. Giving people water, a bathroom, and a place to put their bags down will go a long way toward a sale.

    Opening earlier or later. Yes, it is a risk, but not doing it is an enormous risk too. It depends on your business to see if it would work. All coffee shops downtown open early–because it makes sense for their business. Doughboys used to open at 8:00 and close at 4:00. They are now out of business. I don’t think it makes sense for the clothing stores to open at 7:00am, but it does make sense for florists (having lived in Boston where people bought flowers on the way to work and the way home, it is one of the things I really miss about a real urban setting). Here the florists are not open either before or after work. I don’t go to a lot of stores downtown because they close at 6:00. I simply can’t get there until about 6:15. Or take Anderson Paints–they are open short hours on Saturday and aren’t open on Sundays so we don’t go there if we have a big project. Since we only have Saturday and Sunday to work on jobs, when we shop at Anderson, we get stuck without something we need in the middle of a project and can’t get back there for a week. So we go to Stadium Hardware even though we have to walk by Anderson to get home.

    The alternative you advocate seems to be to wait for business to come and to close if it doesn’t. Not much of an alternative.


  26. Todd, are you saying Amer’s is making ‘less profit’ or ‘loosing money’? I am also not sure you can say that Amer’s is throwing away 50k to do business in Ann Arbor. I certainly hope he is just making less and not loosing money but if he is making less profit here then he is still making money. I am also defining profit as the money left over after everything (and I mean everything, including the owner’s time) has been paid for. If he is loosing money he should consider closing. Maybe he has to do business differently in Ann Arbor, than in Brighton, for this store to make him more money.

    Earlier I raised the issue of desire; a company has to want to be downtown, so I have been considering some numbers. Now, I don’t know of the business plans of these people in the Roundtable but what about this example. A company has a space outside the city for about 12 dollars per foot. That’s OK because at that price they have an Ann Arbor address; with 2,000 sf, they pay $24,000. But the location makes it more difficult to hire and keep employees (the new folks want to work downtown and you have to have a car) and clients will sometimes think more highly of business in the downtown, raising awareness and possibly expanding the client based. Nevertheless they are a few miles out and do have business. Also a part of the stated goal is to raise the owner’s already six figure salary 75%, within the next year or two. Now I think this business could easily be downtown contributing to the core but they just do not want to be.

    Juliew has some good ideas and I would like to offer another, maybe an unusual one. The Ann Arbor address is something people think about and want; I know people who did not buy particular properties because they were not served by the AAPO so lets build new Post Office buildings for Scio and Pittsfield etc. so that the truth can be advertised that the Washtenaw County Offices are no longer located in the County Seat.


  27. AhhhhhhhHHHHHH!!! It’s losing. LOSING. One O. Not loosing. Totally different word.

    (Sorry, super-duper pet peeve.)


  28. Sorry Dave, are you OK? For a moment there I thought you were losing it.


  29. “The alternative you advocate seems to be to wait for business to come and to close if it doesn’t. Not much of an alternative.”

    I was talking about this thread with my brother, and how I was frustrated with my ability (or, specifically, my lack of ability….what else is new) to convey why I think that you (and some other Ann Arborites) don’t understand the numbers behind what you are asking these businesses to pull down in a year.

    The businesses that we are discussing have been successful in the past, and have done the normal things that you have suggested: constant advertising, tastings, charity events, etc. etc. They haven’t been sitting on their hands, as you seem to be suggesting. Most of the owners work somewhere in the 60-70 hour per week range, so it’s not like they have a ton of ‘extra’ time on their hands to do some of the things that you have suggested. These business models worked, and worked well, when costs were normal, and rents were in the $10-$15 per square foot range.

    So I’m going to break things down, as my brother suggested, and quickly give you the (or some of the) numbers behind the business situation in Ann Arbor

    I’m going to round off numbers metrically to make the math blatantly simple….but this is a pretty typical spread for a medium-sized successful restaurant….not a place with through the roof sales, but with healthy sales.

    Let’s say that sales are $1 million per year, and profits are $100K, or 10%. If rent moves from $10 per square foot to $30 per square foot (4,000 sf for this restaurant) at the end of their lease, that means an increase in per year sales increase of $80,000 that this business needs to come up with…..

    What this means is that the owners of this business, using your suggestions, and not spending one single extra penny or one extra minute of their time, needs to increase sales by *$800,000* (80% sales increase) in order to *just cover the increase in rent* so that they can still walk away with $100,000.

    This, of course, assumes that their base cost structure to margin ratio stays the same. It also assumes that they have the facilties the capture this sales increase. In other words, they can’t have additional capital expenditures to put in more seats or change their kitchen/bar setup. They also cannot discount their products any more than they already do….

    So let’s say that you wanted these owners to go after these additional sales with a tee-tiny marketing budget of $20K (this amount of money will get you a handful of print ads per month, and nothing more) and with the owners working an extra 5 hours of work, working on the joint ventures you suggested. Now you’ve added an additional $200,000 in sales volume that the business needs to *just break even*

    So now the total sales increase that you need *just to break even* is a cool $1 million dollars, making them a $2 million dollar per year operation…..doubling their sales while holding all their other costs in parallel to the business model at $1 million in sales.

    Now. If you held owned a 50% stake in this company, and you knew that their rent was moving to $30 per square foot, would you tell them that “well, you just need to adapt and work smarter”, or would you be on the phone every day begging them to change their location?

    This is why each and every person at the Retail Roundtable told the readers that there is no chance that their business model would work at $30 per square foot.

    So to finish my thought, the choice for these downtown businesses isn’t “spend this money of go out of business”……it’s “spend this money with the thought of skyrocketing sales out of nowhere, or *bail*.”

    As you know, the businesses are, for the most part, bailing.


  30. *hit. Glaring mistake.

    The 6th paragraph down should read “this *doesn’t* mean that this business needs to increase sales by $80,000 per year…..”


  31. todd, Are the owner (s) paid for their 60 to 70 hours a week from the $900,000 or are they only paid from the $100,000 profit? And if their time is compensated from the $900k, how much do they make in your model?


  32. “todd, Are the owner (s) paid for their 60 to 70 hours a week from the $900,000 or are they only paid from the $100,000 profit? And if their time is compensated from the $900k, how much do they make in your model?”

    I would’ve assumed it’s the profit that’s theirs. That’s what “owner” means, right? But would it make much difference anyway?

    The point is that when your income depends on small difference between two really big numbers (sales and expenses), a change in either of the two big numbers can have drastic results. When your rent triples it’s probably not something you can fix by working a liltle harder–you probably just need to get out, *fast*.

    OK, maybe you’ll suddenly think of some way to dramatically increase your sales. But, then, why couldn’t you have done that before? If you’ve been running your business for a while, it seems a little farfetched to expect at this point that you’re suddenly going to think of a new way to double your sales.


  33. This is the exact answer I would have given to cb, Bruce. Thanks.


  34. _These business models worked, and worked well, when costs were normal, and rents were in the $10-$15 per square foot range._

    Hmmm, this isn’t at all the sense from the Roundtable participants. They were far more concerned with getting people downtown shopping and said the big thing that had changed was that people did not come downtown anymore. Marketing was mentioned as the most needed item, followed by adding residential, then addressing parking. As a matter of fact, Hodesh’s quote about not starting his business today was in the context of development pressures. “It would be seen as a frivolous use of property. The consequence of housing development and all development is that it produces space that after the banker and lawyer and architect and everyone gets their hands in it, it costs $30 per square foot to rent.” They didn’t talk about their own rents causing them problems (obviously it must be part of the whole equation), but were worried about retail costs of new buildings. And both Ehnis & Sons and Afterwords owned their own buildings so rising rent was not as much of an issue there. Interesting too that they all felt building “affordable” housing downtown was a bad use of money.


  35. “And both Ehnis & Sons and Afterwords owned their own buildings so rising rent was not as much of an issue there.”

    I’ve been wondering whether those businesses just didn’t adapt very well in recent years. (The answer may be obvious, but I don’t want to assume too much.) If that’s the case, the lack of pressure from increasing rents might have actually contributed to their not seeing the need to change in time. If they hadn’t owned their buildings they may have closed several years ago. Or maybe they would have adapted over time and still be open. I’m sure someone interested in competition and business evolution could have fun examining this.

    “Interesting too that they all felt building “affordable” housing downtown was a bad use of money.”

    Do any of them operate businesses that would serve that demographic? (Or have all those businesses closed over the last ten years or so?) They (other than Karl Pohrt) may not realize the value of diversifying the business mix downtown, which would benefit them indirectly (i.e., in less obvious ways.) Of course, what they say in a setting like that and what they are capable of understanding are two different things.


  36. “I would’ve assumed it’s the profit that’s theirs. That’s what “owner” means, right? But would it make much difference anyway?’

    Assume all you want but the difference is real. Many business owners blur whether it’s the ‘business’ that makes the 10% or the owner; and the difference has a huge impact in this discussion. Todd’s example changes a great deal if his owner pays himself a $95k base salary for his 60 or 70 hours from the $900k expenses and still ‘needs’ a 10% bottom line profit to make his business plan work. If everyone is paid, owner included, then the business’ profit can be many percentage points less. The DOW isn’t @ 10% and never has been historically so why should this hypothetical business expect this? If however the owner takes no salary out of the $900k and contributes 3,000+ hours to the business the discussion changes drastically.

    This hypothetical restaurant should make money; whether it is owned by one or many. However to expect that a business (all businesses?) should grow at a rate of 10% a year is not normal and cannot be supported by any economical model I know of.


  37. ““I would’ve assumed it’s the profit that’s theirs. That’s what “owner” means, right? But would it make much difference anyway?’

    Assume all you want but the difference is real…. If everyone is paid, owner included, then the business’ profit can be many percentage points less.”

    Right, so how many percentage points less? Let’s say they can do away with it entirely. Now they only need a 70% increase in sales instead of an 80% increase.

    See why I say that it doesn’t make that much difference?


  38. Afterwards stated specifically that for them, the problem was the change in the publishing industry that left fewer of the high-quality remainders they sold (like art books). Plus, there were more online outlets for remainders, so fewer of the few were getting to stores.


  39. Todd, I just read and re-read your post above that started this math and realized why I cannot get my brain around this one. In your example all costs go up with every sale, so you’re paying your waiters a percentage of the sales, as well as your chef and the hostess and the dishwasher. You also turn on more lights when a new customer walks in the door and need more heat for the new customers who come in December (yes you do cool more with more people). You’re running a funny place. In my restaurant I pay my staff hourly so if they serve 40 or 80 they are paid the same (tips excluded), and the guy who sweeps up is not paid by the pound. So in my place when I seat more people I only have an increase in the cost of food supplies and energy to cook and clean dishes; but that’s about it. I also put a little aside to pay for the additional wear and tear. I make my staff prepare for the rushes when things are quiet, as you pointed out that the assumption does not include needing more space or having 100% occupancy. Then when things get busy I sell enough plates to meet my goals and the additional plates have a big profit factor on them because they are sold at the same rates as the others and I close the spread on the additional rent really fast. In my restaurant the biggest costs, rent, equipment, staff, utilities, advertising don’t change much if I am at 75% or 90% capacity and my business plan is designed for 65% capacity so once I get sales over 65% my profit goes up quickly.

    So like the people at the Roundtable said we need to get more people downtown shopping and eating etc. to offset the high rent. If not I’ll be closing my place and my landlord will not be getting his $30 a foot. Maybe then he will consider renting this place for less; but I hope it doesn’t get to that.


  40. I explained this in my assumptions:

    “This, of course, assumes that their base cost structure to margin ratio stays the same. ”

    I did this to simplify the math. Of course you are right, but those cost savings that you are getting at will only total a few extra percentage points. If I took the time to show everything that you listed, I’d have to attach a spreadsheet.

    As Bruce tried to explain to you with regards to ownership salaries, this number is far too small to make this example restaurant profitable. Your savings/labor and energy efficiencies will make up for a rent increase of a dollar or two a square foot.

    The point of my post is that we are asking these restaurants/businesses to make up for a *three-fold* increase in rent in the span of under a decade. This is not normal. The business opportunities do not correlate with this price for rent…..which is why local businesses are leaving. If, as Julie pointed out, guys like Hodesh, who own their property, are noticing a lack of people downtown and sales drops, imagine what the picture looks like for someone who has to pony up $25+ per square foot in a year?

    I’m just trying to get people to understand the raw math of what these businesses are dealing with……..


  41. i don’t think you need a spreadsheet to account for fixed and incremental costs.

    todd, in your model all costs are incremental. can you refine it a bit? if 50% of the costs are fixed and 50% are incremental, then making an extra buck only costs you … uh … er … well, bruce is the math major here …

    but todd is the business major and 50/50 is pulled out of thin air … maybe it’s 80/20 … 20/80 … ?


  42. Boy, those sales Julie mentions really could have benefitted from local advertising… Maybe in something free around town… And they really would have benefitted from having their ads facing the most incoherent rock critic in town… Heh.
    (I don’t care much about downtown because I can’t afford to go there and buy things, frankly. Aside from music and beer, there’s no goddamned way I can pay Ann Arbor prices for nearly anything. Never have trouble parking though…)


  43. Seems to me in reading all of this that the answer is clear. Rents are high because there is demand. I’ve rarely seen a storefront vacant on Main Street for more than a couple months. If rents are to come down, then demand has to decrease (meaning there is no one willing to pay $30 a foot for rent) OR businesses that can’t perform in that environment need to move on and make way for those that can. If that results in a cookie-cutter, chain store downtown, then thats what consumers are willing to support.


  44. Have you heard of “the supply side”?


  45. C-M-S: In addition to Dale’s excellent point about, y’know, supply, there’s also the fact that the giant space underneath my office has been empty for the entire time I’ve worked at Current (about five, six years… Damn… I need to leave…). Granted, the owner wants more money than it’s worth and isn’t willing to compromise (tax write off), but it’s there and empty. Mayer-Schlayer was empty for quite some time too.
    There’s also the pretty strong argument that just because a business can make the most money in a place doesn’t mean that it’s the best for the community, something that you seem to have missed.


  46. Consumers don’t support giant chain stores, the chain stores have unfair advantage because of volume buying, because they can afford to lose money in some locations to heighten their profile, because our tax dollars support their lack of health insurance and other benefits.

    They are giant rolling spoodgeballs, gathering ever more spoodge as they roll downhill.

    Or did we all know that but some of us don’t care?
    Enjoy your Big Macs, then. To me they taste of armpit.


  47. It seems the vast majority of Americans shop at Walmart and other box stores because these businesses have figured out how to give the consumer the best deal, and in doing so have transformed (to my mind not for the better) the supply chain and the employee business relationship. It seems though, that most people care little about these changes as long as they can save a buck (which they probably need to pay towards their new insurance co-pay). There are notable exceptions to this trend but the growth of companies like Walmart suggest the exceptions are a minority.

    As to supply side. Yes, I’ve heard of it. I’ve also heard of the tooth fairy and Bigfoot. I’m more convinced by the later two.


  48. C-M-S: ‘Supply side’ is not the same thing as ’supply side economics.’ The latter is a bullshit philosophy. The former is an economic axiom.


  49. the thing about armpit is that it’s pretty difficult to taste your own armpit which could be misleading so if you think about it some armpit might actually taste ok if it’s the right armpit. or the left.

    consequently i think the jury is still out on whether a big mac tastes like armpit. i wonder what a bigfoot big mac would taste like. toe knuckle hair? or what about a tooth fairy big mac? or door fairy? back to you, nitro.


  50. The old Olga’s location on State and Washington was empty for what ? 7 years? 8? 10?


  51. Driving downtown today, I noticed that the shopping there, for me at least, would be “destination” shopping…going for something out of my ordinary needs. Unfortunately, I buy things like underwear at a department store, not a specialty shop, and my kids shoes at Stride Rite because the swedish Kava shoes at the special store downtown is outside of my price range. Downtown shops seem much more of the gift kind instead of the goods kind. I am shocked at the thought that Nordstrom would be interested in A2, actually, having come from Seattle and knowing what kind of volume of merchandise, etc their stores have and clients purchase. If there were an anchor department store downtown, I think it would be beneficial to bring people down for shopping. I’d much rather come downtown than go to Briarwood.

    The other thing that I noticed the other day is that downtown eateries are really expensive and there aren’t many spots where you can grab a quick lunch without spending over $20 for 2 people. I took my son out for lunch after his first day at a new school and my salad and his grilled cheese at Grizzly Peak went over $20. It’s a bummer, because his school is on Ashley, which would make going downtown to hang a bit fun. Other cities have quick, good places where the business and shopping crowd can grab a bite. Maybe I am missing something?


  52. Cloverleaf? Jerusalem Garden?


  53. Transplant:
    Cloverleaf, Jerusalem Garden as Larry suggested. Also LeDog (2 locations), Cafe DuJour, Kosmo’s deli.


  54. “Driving downtown today, I noticed that the shopping there, for me at least, would be “destination” shopping…going for something out of my ordinary needs.”

    If you look around, it is possible, if occasionally annoying, to get what you need, between the co-op, White Market, the saturday morning Kiwanis sale, etc., etc.

    Though of course if you compare with the crowds at Meijer, it’s obvious that those places are only getting only a miniscule portion of people’s daily shopping.


  55. I live downtown, but drive out to Meijer for the everyday things. It would be cool to just tool a couple blocks for stuff like that, but like someone said, it’s all geared toward boutiquey, artsy-fartsy stuff. I don’t have much occasion to go to a gallery, but someplace to pick up, say, toilet paper would be nice. Don’t get me wrong, I’m glad there is cultural stuff like the galleries and whatnot, but even with more people living downtown, I don’t see shopping increasing appreciably because the downtown isn’t really geared toward residents. I do occasionally go to the co-op and Sparrow’s in Kerrytown and the like, but I do agree maybe some kind of anchor store could attract more folks. Nordstrom’s, though? More Oakland County day trippers.


  56. I wonder about the profile-raising thing with respect to Amer’s, which, I think Todd said, does a lot better at its Brighton location. Does having the A2 location serve to increase the sales in Brighton, because people think it’s this cool Ann Arbor thing?


  57. You can get by on the cheap for lunch food in downtown - my favorite right now is the $10 lunch bento at Tortoro that covers my dinner - but around Main Street, it is iffy. It can be done, though, if you just know tricks and eat the large meal of the day between noon and 3.

    Quite honestly, if due to nothing else but high rents, it’s going to remain mainly destination shopping around here. Acme, bless ‘em, has actually saved me a couple of times (it took me a full hour of speed walking to find safety pins… even the random art-y stores didn’t have any). The Kerrytown grocery and food co-op are great pricewise for “city” groceries (the higher price seems fair to me for the convienience and quality of both). It’s the other things that are lacking… Acme and Kerrytown and the Co-Op, as local-oriented as they may be, are still good for the tourist “Ann Arbor” vibe. Everyday bare-essential stores that the people who live in town and can’t get out kinda need, well, aren’t.

    The point is, it’s more than annoying, it’s extremely difficult to get everything you need downtown (which became horribly apparent to me when I lost my car and couldn’t run to Meijer easily). And push come to shove, I still can’t get my medications (or hell, toilet paper and paper towels - I can’t afford the Co-Op organic variety) without a AATA trip out to Plymouth Mall.


  58. Village Corner covers an astounding number of mundane needs such as toilet paper.

    As for transplant’s quest for a cheap bite, huzzah, ArborWiki comes in handy. Check http://arborwiki.org/city/Lunch_under_5_dollars for a few dozen cheap options downtown.

    The existance of many yupscale, expensive restaurants doesn’t mean no cheap eats exist - you just have to not be looking for a yupscale restaurant.


  59. I think “cheap eats” is more toward the sub-$5.00 range.


  60. And yet again I put in my bi-annual plug for Knight’s Market, which has TP, papertoweling, toothpaste and sundries, as well as food. If you’re located more northwest than southeast for VC, it’s handy.


  61. Stella, where is Knight’s Market? I don’t know the place.


  62. Dave,

    Short answer: Knight’s Market is on the corner of Miller and Spring.

    Longer Answer is ArborWiki’s entry: www.arborwiki.org/city/Knight’s_Market


  63. Cheap eats for me is $5 or less a meal. If I can get a $10 meal that covers me for two, all the same.

    The page doesn’t go anywhere, but I honestly didn’t know that place existed, and it’s all of five blocks from my place. I just never wander through that neighborhood… Thanks much, Stella.


  64. Dave and Jen,

    Sorry. Not sure why the link to ArborWiki doesn’t deliver the goods, but it sure doesn’t. Something to do with underscores, perhaps. Here’s the entry:

    Knight’s Market
    From ArborWiki

    Knight’s Market, which long ago begat Knight’s Steakhouse, is on the corner of Miller and Spring, just a few blocks from downtown.

    The market is a grocery store in addition to being a full-service butcher. It manages to stock the selection of a much larger store in a tiny building. The prices are average, generally in line with Busch’s and usually a bit cheaper than Sparrow’s Meat and Produce.

    The inconspicious door is around the back, on the north side of the building. Chet Knight runs the market, and is usually behind the counter.


  65. The amish chicken, pork tenderloin and prime rib are sublime, the afternoon checkout guy ain’t bad either.
    Hours are:
    Monday thru Friday 8 - 6:30
    Saturdays 8 - 5
    Sundays - closed
    420 Miller
    enter off Spring


  66. Toilet paper can be found in the downtown area at Village Corner, Village Apothecary, White Market, People’s Food Co-op, Knights Market, the gas stations at Main & Ann, gas station at Main & William, gas station at Main & Madison, Acme Mercantile, the Blue Front, and Campus Corner. If you buy a case at the Co-op, you get a 10% discount.

    The Prescription Shop and Village Apothecary are full-service prescription shops downtown. The Prescription Shop not only has on-site parking, but they also deliver should you find that necessary (as does White Market).

    I live downtown and haven’t been to Meijers or Krogers in years. Even when I do go to a huge grocery store around town, I more often than not end up coming home empty-handed because I just can’t find what I want in those stores. You really can find everything you *need* downtown, but maybe not everything you *want*. Just like any other part of the city, it has specialty items that can’t be found elsewhere. It all depends on your lifestyle and what you are used to. But to say most things aren’t available downtown just isn’t true. It just requires a non-suburban mindset to find them (I’m not saying this as an insult, it took me a while to figure it out myself). It is very true that there is not a huge, impersonal store in the middle of town where you can get everything under one roof, but I don’t think that is a bad thing.


  67. I stop by Costco once every month midweek on the way home from work for my utilitarian needs. I have the store layout memorized so it doesn’t take me more than 15 minutes to get what I need. Anxiously awaiting Ikea opneing this summer in Canton.


  68. Oh, Knight’s is that flaming yellow brick building? I always thought that was just a coffee shop or something similar. Thanks for the tip; will definitely check it out.

    And thanks, Julie, for the other ideas. I suppose the key to boosting shopping downtown might be simple awareness. I do love my Meijer’s, but it’s also important to me to support local biz to the extent consistent with needs and budget (i.e., don’t necessarily want to spend twice as much on everything just for the sake of staying local). I suspect I’m not alone in not knowing about these various places and what they have.


  69. Dave,

    No, the flaming yellow brick building is a coffeshop (Big City Small World or something - the name keeps changing). Knight’s Market is across the street, a rather non-descript building with their signature chess knights on the exterior walls.


  70. Coming in a bit late on this conversation…I wanted to touch on the point that Daniel made–is the city settling for a short-term “solution” that won’t be able to sustain itself in the long run? We can argue about whether or not a real solution will take government support or not, but I think he’s right that if we “build for the rich and childless, and get a lot of money up front when you sell those places (e.g., down on First St.) with very little taxes and return rewards later on” then this is not really any solution at all. In other words, is there a condo death-trap that we’re in danger of falling into?

    One think I would like to see, for example, is more family housing in the Northeast, presumably in the plan that I guess the city is writing up. When I say “family housing”, this would preferably be detached housing (regardless of lot size). Families have a lot of advantages, one of them being that they tend to be more permanent than younger and older couples (and especially more than second condos or apartments.) It seems to me (not based on any real data) that condos would tend to attract young singles and young married couples, which is fine, but what happens when they start having families? Will they stay in the condo? Maybe for a while, but not for long–eventually they’re going to want a house, and if they can only afford one in the townships, away they go, along with much of their business. This is just based on intuition; I could be wrong.

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