Are new big box retailers the answer for Detroit’s beleaguered homeowners?
Michigan seems to think so. Just last year, the state-based Meijer grocery chain got approval for a $3.3 million tax credit to turn a 25-acre former school lot into a bustling superstore.
New Jersey-based clothing factory Forman Mills announced it will breathe life back into an empty department store building, and that bastion of millennial luxury, Whole Foods Market, has plans to set up shop in Midtown Detroit.
University of Detroit Mercy marketing analyst Mike Bernacchi told CBS Detroit that any retail outlet openings are a good thing, especially if they’re a chain. “The fact that they’ve selected the area, that they’re opening, certainly may give impetus for other stores to move into that area,” he said.
Often the first sign a neighbourhood’s values have taken a nose dive is when the local grocery store starts packing up shop, leaving the area without a lifeline, commercial real estate expert Faith Consolo tells Your Money. Likewise, the lack of retail chains sends a message to residents and competitors that business is flagging.
Still, criticism persists against opening big-box stores in downtrodden cities, as GOOD Magazine’s Tanveer Ali points out.
One public advocate’s study found Walmart drives out locally-owned businesses while creating an increased tax burden on taxpayers, while another claims small biz drives more people back to hard-hit neighborhoods than a SuperTarget (the example used) ever could.
And it’s hard to tell whether big business’ foray into the Motor City will elevate the city’s status or simply drive local businesses (and jobs) out. Some studies have shown the opening of a mega-retailer like Walmart led several stores to close, says Tanveer, while others had a Darwin-like effect on the city, where only the strong mum & Pop shops survived.
Regardless of how it all shakes out, it would seem Detroit has much to gain from its reemergence on retail chains’ radars. And in a city where homes can be had for less than $100 and a glut of foreclosed homes continues to rot on the market, homeowners might welcome the change.