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Downtown Detroit can support more retail, residential, study says

By Jennette Smith

1:40 pm, October 26, 2006


Detroit has the market demand to support more retail and residential development in and near downtown, according to new research released Thursday at the University of Michigan/Urban Land Institute Real Estate Forum.

City leaders and researchers said the data helps makes the business case for more investment, continuing efforts accomplished in recent years.

“In Detroit there are more people who earn more income and represent more purchasing power than previously believed,” said John Talmadge, president of research company Social Compact. The rest of the team behind the research includes the Brookings Institution, University of Michigan, Detroit Economic Growth Corp. and Downtown Detroit Partnership.

Talmadge and other panelists at day one of the event at the Cobo Center said there are real opportunities based on the new figures. Among the findings:

The expanded downtown area has a workforce of 193,000. If worker spending is estimated at $1,800 per year, that translates to a spending potential of $350 million.

There is demand for 125,000 square feet of grocery stores in downtown and adjacent neighborhoods and 389,000 square feet of clothing, furniture, electronics and other non-grocery shopping.

The market study area that runs north from the river north to the New Center area and east down Jefferson Avenue has median home values of $115,000, up 31 percent from 2006 census projections.

The downtown core area includes 6,500 residents with average household incomes of $59,300, 33 percent higher than 2006 census projections.

The Brookings Institution’s Alyssa Lee said not only are market fundamentals apparent in Detroit, but so is capital-markets support.

Matt Cullen, general manager of economic development and enterprise services for General Motors Corp., said the new data is important and will be part of the message about Detroit shared nationally.

Other topics discussed during morning sessions at the forum included the importance of mass transit to Detroit, and programs such as Neighborhood Enterprise Zones and Business Improvement Districts.

The theme of this year’s forum is “creating walkability.” Speakers told the group of real estate developers and academic and government leaders they need to think in new ways.

“We have to learn how to create an experience. It’s a much more complicated management job than any of us has done in the past,” said Chris Leinberger, professor and director of the graduate real estate development certificate program at UM, a Brookings fellow, and partner in Arcadia Land Co.

Crain’s also presented Real Estate Excellence Awards for Peter Allen, adjunct professor at UM and an Ann Arbor developer; Andrew Farbman, CEO, Farbman Group; Neil Sosin, CEO, Northern Equities Group; and Vincent Murray, executive director of the Bagley Housing Association

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