Commerce Twp. project aims to blend more lifestyle services with retail, housing

A planned upscale retail and residential development in Commerce Township could become a blueprint for how to build an all-new suburban shopping district in an age when more consumers are shopping online.

The concept doubles down on food offerings and lifestyle services, such as yoga studios and dog grooming, and goes much lighter on traditional retail storefronts.

But first, the ambitious $100 million-plus project must land enough leasing commitments to get built. That will require convincing a range of businesses to commit to a new location, even as stores in existing shopping centers – under pressure from Amazon.com and other e-commerce competitors – keep closing shop.

The project, called Five & Main, would be situated on 42 acres of vacant land along Pontiac Trail Road, between Martin Parkway and a Walmart store. It would be about a 20-minute drive from Twelve Oaks Mall in Novi.

Development firm Robert B. Aikens & Associates of Birmingham is pitching Five & Main as a built-from-scratch downtown for the township, which now lacks one.

“There’s no place where you can go park, walk up and down tree-lined streets, go to a theater, eat dinner, have a Birmingham-type experience,” said Robert Bruce Aikens Jr., the firm’s vice chairman.

Five & Main could be considered an updated version of the so-called “lifestyle center,” a type of open-air mall concept that proliferated from the 1990s until about 2008 as a successor to the enclosed mall.

Local examples included The Mall at Partridge Creek in Clinton Township and The Village of Rochester Hills, which Aikens & Associates also developed in the early 2000s. But amid changing retail trends, lifestyle centers in some markets have lately struggled.

While pre-recession lifestyle centers emphasized apparel stores and often had one or two department stores, Fifth & Main would focus more on services for consumers’ lifestyles and less on brand-name clothing and other goods easily bought online.

This will mean more restaurants, gourmet grocers, beauty shops, boutique fitness studios and pet grooming services, Aikens said.

“This is kind of the new template for the modern shopping center,” he said.

Just a quarter of Five & Main’s tenant mix is expected to be fashion apparel stores. Earlier lifestyle centers were often 60% to 70% apparel.

In addition, Five & Main has letters of intent signed with an upscale grocery market and a movie theater with reclining seats and a full restaurant and bar, Aikens said.

The district could also have as many as 13 other restaurants, a mix of fast casual and sit down restaurants.

“We’re going to serve all the lifestyle needs for consumers who live in that area,” Aikens said. “You can go get your hair done, you can go get a massage, you can work out, you can go to the market, you can do the entertainment – and you can shop.”

The development will also have a large residential component: 300 market-rate residences. Half of the apartments would be general rentals; the other half could become part of an age 55+ residential community. The residential component isn’t counted in the district’s $100-million cost estimate.

First since the recession

Five & Main would be the first new shopping district development of its kind in Michigan since the Great Recession.

The last similar big-scale project in metro Detroit to get underway was the failed Bloomfield Park along Telegraph in Oakland County. That 87-acre development, billed as an “all-inclusive lifestyle community,” was to contain hundreds of luxury condos and enough upscale retailers to rival Somerset Collection.

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Construction abruptly halted in fall 2008 and the development never opened, leaving half-built structures to turn into ruins before being razed last year.

That same decade, Commerce Township had been trying to attract developers to what recently became the Five & Main site. Once the economy stalled, nothing got built.

In hindsight, that decade delay benefited the township, according to one industry expert.

Had an earlier generation, retail-heavy version of Five & Main been built, such a development might be struggling in today’s different retail environment, said Ken Nisch, chairman of Southfield-based brand strategy and retail design firm JGA.

“Bloomfield Park is a good example of what could have happened at Five & Main, if they started when Bloomfield Park started. It could have been that same scenario,” said Nisch, who praised Five & Main’s current retail-lite concept.

“What they are proposing here is very much in line with what is happening going forward,” Nisch said. “You don’t want to be the last version of the old concept. You want to be the first version of the new concept.”

Few being built

Metro Detroit has seen a few unsuccessful attempts to build shopping centers since the recession ended.

In 2014, there were three different proposals for new outlet malls in the region: one in Canton, one near Detroit Metro Airport, one in Chesterfield Township. But all three plans were scrapped as developers saw how traditional outlet center anchors, like Nordstrom Rack, were hesitant to do new-construction deals.

Only the Chesterfield Township project survived once it re-envisioned itself as a more traditional shopping center – Chesterfield Town Center – that last year opened a popular Cabela’s store.

Nationwide, few entirely new outdoor malls and lifestyle centers are being built right now, said Stephanie Cegielski, a spokeswoman for the International Council of Shopping Centers.

Most of the new construction that is happening involves redesigns of existing shopping centers, she said, such as turning former retail big boxes into yoga or fitness studios.

Still, Five & Main’s concept appears in line with current nationwide trends, said Chris Weilminster, an Urban Land Institute member and president of the Mixed-Use Division at Federal Realty Trust, a Bethesda, Md. firm that invests in shopping centers.

“Assuming that it’s got the right demographics and all the right access and public amenities, that certainly seems to be something that is resonating with not only the retailer, but with what consumers in today’s day and age want,’ Weilminster said.

Another new development, The Village at Bloomfield, is set to start construction later this spring on the site of the now-demolished ruins of failed Bloomfield Park. The $123 million development is to include a two-story Menards, a grocery store, a new hotel and a community of 432 residences, among other things.

As for Five & Main, Commerce Township last month gave a preliminary approval for its site plan. Aikens has a commitment to buy up to 55 acres for the project over two development phases from the township’s Downtown Development Authority.

The developer has already paid a $325,000 deposit on the $10.5 million total land purchase, said authority Director Mark Stacey.

Snagging leases

Aikens said his firm wanted to start developing Five & Main a few years ago, but found that attracting tenants to a new shopping district was even harder than he anticipated in the new retail climate.

So they tried tweaking the district’s design, making it even less dependent on traditional retail and axing a planned department store anchor.

Aikens said his firm is now in the later stages of securing tenant commitments for the district’s storefronts.

About 65% of it needs to be pre-leased to obtain construction loans, he said. That is a change from shopping center deals of the past. Twenty years ago, a developer might get a big loan to build a new outdoor mall after commitments from just two department stores, he said.

“It’s much harder now,” he said. “You have to really open it up fully leased.”

To keep an upscale image, the district won’t be leasing to any discount or dollar stores despite the strength of that market segment, Aikens said.

Five & Main has been seeing interest from unique retailers that aren’t yet in Michigan or may have just a single store that is not in the area, Aikens said. Other prospects are newer retailers that once only sold online, but are now opening actual stores, such as eyeglass seller Warby Parker, jeweler Blue Nile and women’s plus-size retailer Eloquii, which opened its first Michigan location last month in Twelve Oaks Mall.

“We’re not trying to compete against Twelve Oaks, but that is really the (shopping center) that would try to get the tenants we’re trying to get,” he said.

Amazon proof?

Aikens said it is too soon to publicly name future Five & Main tenants, although he anticipates making some announcements this summer.

“Even the national chains that want to go to Commerce want us to have local chef-driven restaurants, local unique boutiques, because they feel that’s what’s compelling – that’s what you can’t just buy on the Internet,” Aikens said.

The goal is to start construction of Five & Main next spring and have it open by fall 2020.

Once it is built, will the district be OK if even more shopping and commerce moves online?

Aikens said he is optimistic.

“As long as people keep going to yoga, and shopping at the market and going to the theater,” he said, later adding, “Nothing is Amazon-proof. Let’s hope that we all don’t just sit in our house and have stuff delivered by drone.”

Five & Main at a glance:

Entertainment – 26%

Restaurants – 20%

Specialty food and beverages – 9%

Fashion – 24%

Wellness & Beauty – 9%

Home furnishings – 10%

Residential – 300 apartments.

First Phase: 42 acres

Possible second phase: 14 acres

Source: Robert B. Aikens & Associates

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