Making Sense Of Family Dollar
Comments (4) 12:10 PM posted by admin |
On Tuesday, November 20th, Ypsilanti City Council will take up the decision on whether or not begin negotiating with Core Resources, Inc. of Cincinnati, OH, on whether or not the City of Ypsilanti will sell one of its precious parcels in Water Street for development.
In 2010, Council adopted a policy that said we would hold a public hearing and take input before executing a sale. Since this technically isn’t a sale, there will be no public hearing.
So the joke’s on you, constituents!
I say that with sarcasm and love because what is going down this coming Tuesday is a complete end-around of Council’s aforementioned policy. If we agree to begin negotiations, it’s essentially a done deal that we are going to sell sometime in the not-to-distant future. Sure, it’s plausible that the whole project could fall through due to some as-yet unforeseen detail in the contract, but barring anything out of the ordinary, four YES votes means Family Dollar is coming to town.
Let me throw some information out there and you can make up your own mind as to whether this is a good idea, a bad idea, or just an idea.
In April of 2010, Council voted unanimously to reject an offer to build a Burger King in the very same spot that Family Dollar is looking to call home. There are several distinct differences between that proposal and the one that Family Dollar is floating now.
The obvious difference is the purchase price. In 2010, Bravokilo (the company behind the proposed franchise) was offering to pay $400,000 for a one acre parcel. Two years later, Core Resources is starting the talks at $210,000. To the untrained eye, this might look like a difference of $190,000. Is it possible the real estate market in Ypsilanti has tanked so much in the past two and a half years that the value of Water Street is now half? The answer to that question is, not exactly.
There is a not-so-obvious difference in the two offers. Which leads us to our next topic of discussion…
When Bravokilo was kicking the tires in Water Street, they were asking for a lot of infrastructure upgrades. Based on their initial site plan, they were going to need to tap into the water main on Park Street. This was going to require some 300 feet of new pipe and the cost of laying all that pipe. Since the City of Ypsilanti is acting as the developer, that cost was going to fall on us. Midwestern Consulting told the City that would cost at least $27,880.
Bravokilo was also going to need major upgrades to Parson Street since, you know, there is no Parson Street behind that parcel. When you add up the cost of 200 feet of curb, base, and asphalt, the sanitary sewer that goes under it, and the cost of manhole covers (at $1500 apiece), the cost for construction of that section of Parson Street added up to at least another $67,430. Again, since the City is acting as the developer, that cost was going to come out of our deep pockets.
Now keep in mind these were 2010 dollars we’re talking about, but the grand total for infrastructure back then was at least $95,310. Oh, and that didn’t include removals, franchise utility costs, abandonment of franchise utility costs, contingencies, or engineering and inspection.
Core Resources is proposing pulling all of those utilities off of Michigan Avenue. That’s just a fancy way of saying “at no cost to the City”.
GENERAL FUND TAX REVENUE:
The City collects property taxes on real and personal property. What we collect goes into the General Fund, Solid Waste Fund, Fire & Police Pension Fund, and debt to service the two road bond proposal from the early 2000s. To make this a simple as possible, I’m going to ignore everything except the General Fund tax revenue (and I’m including the Charter Amendment for Public Transit in those calculations).
As a data point, I’m going to compare Family Dollar to the Walgreen’s located just to the east of the parcel in question at 419 East Michigan Avenue. It’s the same type of construction that is being proposed here. It’s a faux two-story building that’s also big and boxy.
419 East Michigan Avenue
|SIZE:||13,450 square feet|
|TAXABLE VALUE (REAL):||$720,000|
|GF TAX REVENUE (REAL):||$14,400 / yr|
|GF TAX REV (PERSONAL):||$2,920 / yr|
|TOTAL GF TAX REVENUE:||$17,320 / yr|
Since the Burger King was only a concept, I’m going to take what we knew about the project and extrapolate a little. For comparison, I’m going to use the McDonald’s located just up the street at 16 Ecorse Road as a surrogate. It’s very similar construction to the Burger King with a very similar operation.
Proposed Burger King
299 East Michigan Avenue
|SIZE:||4,103 square feet|
|TAXABLE VALUE (REAL):||$318,600|
|GF TAX REVENUE (REAL):||$6,372 / yr|
|GF TAX REV (PERSONAL):||$2,194 / yr|
|TOTAL GF TAX REVENUE:||$8,566 / yr|
Since the Family Dollar is also only a concept, I’m going to use the aforementioned Walgreen’s and scale it down based on the proposed footprint of the Family Dollar. If the Walgreen’s is 13,450 square feet and the proposed Family Dollar is only 8,320, everything will be adjusted down by a factor of 0.61859. Admittedly, that playing fast and loose with the project, but for the purposes of this example, it will work just fine. Trust me.
Proposed Family Dollar
299 East Michigan Avenue
|SIZE:||8,320 square feet|
|TAXABLE VALUE (REAL):||$445,383|
|GF TAX REVENUE (REAL):||$8,908 / yr|
|GF TAX REV (PERSONAL):||$1,806 / yr|
|TOTAL GF TAX REVENUE:||$10,714 / yr|
Bravokilo just didn’t want to play ball. They proposed a building that looked like it was designed by Mike Brady circa 1973. It was awful. While very few people sit around and argue the merits of fast food building design, there really are designs that are palatable. Look at the KFC on the opposite side of Michigan Avenue. No one will compare it to a Frank Gehry building, but you’d be hard pressed to say it has absolutely no redeeming qualities to it. Bravokilo could have offered us something like that. You know, use some nice brick, kill the seventies-era slanted roof, tone down the traditional Burger King colors. But no, they essentially gave us the middle finger of fast food design. In addition, the building didn’t have anything like a two-story look and feel too it. Toss in the drive thru configuration, and the building could only ever be used as a Burger King. Maybe it would have been used as the backdrop for a Congress video in twenty-five years, but the proposed building would be born a Burger King and would die a Burger King.
The Family Dollar building is a little more intriguing.
The proposed building is situated right on Michigan Avenue. There is zero set-back. That was a very big deal to Council (and much of the community) two and a half years ago. If we are theoretically going to continue downtown in that direction, whatever goes there needs to have zero set-back. It’s a must. Give some credit to Core Resources for meeting that criteria. The building also has has the look of a much taller building. It’s not a true two-stories, but it’s close. Let’s face it, most of downtown is only two stories. Let’s also take into consideration that this proposed building is going to be across the street from the Bomber block that is only one story in height. Also, it is going to go at what is essentially the furthermost edges of the development. Once it’s all filled in, you probably won’t remember it was once part of Water Street. Maybe. I doubt it. People will remember.
That’s not to say this building doesn’t have its flaws. There aren’t many windows. If you’re keeping score at home, there are only a dozen (and that includes the double doors). And it doesn’t even have any of those windows high off the ground that offer a little natural light either.
Additionally, while many Ypsilantians hate big box stores, one of the better qualities of this proposed building is that it’s a big box. Nice and square. Who knows how long Family Dollar would stay. If this is anything like Walgreen’s or CVS or Rite Aid or O’Reilly’s, one company will build it and then rent it to the chain in question. The building isn’t going way. The old A&P up on Ecorse is now home to Dollar General and a hydroponics retailer. Maybe that’s not the greatest example, but it is an example. Maybe in 10 or 15 or 25 years, a new dollar store will come to occupy this proposed dollar store thus helping the dollar store circle of life to continue.
STRAW MAN ARGUMENTS:
Family Dollar isn’t Barracuda Networks.
Family Dollar isn’t Google.
Family Dollar isn’t even Solyndra.
It’s not going to going to generate high-tech jobs. It’s not going to create foot traffic. It’s not hip. It’s not going to attract Millennials.
If you want those kind of things, you need build a recreation center. Uh, what? Never mind.
They are going to sell horrible products like light bulbs, cleaning supplies, paper towels, shampoo, toothpaste, and diapers.
Who in the fuck do these people think they are trying to sell me laundry detergent and diapers?!
I can already buy laundry detergent somewhere else. I don’t need another option. It’s like eating out. Why do I need to be able to choose from the Wurst Bar or the Tap Room or Haab’s or Aubree’s or The Tower Inn or Dalat or Red Rock or The Sidetrack or Korey’s Krispy Krunchy Chicken or any of two dozen other places within walking distance of my house? This town has too many food options. If I want to eat out, I’ll just walk across the street to the gas station. Fuck choice. That’s the last thing Ypsilanti needs.
More importantly, it will set the wrong tone for the entire development. Many will try and argue that getting $16M into debt and then financially handcuffing yourself for the next twenty-five years with outrageous debt payments you don’t have the money for will set the wrong tone for the entire development. But we all know it would be a boxy looking store across the street from a cellphone retailer and a car wash.
You know the kind of businesses that are neighbors to dollar stores? The kind we don’t want, that’s who. If you look in Gault Village across I-94, there’s already a Family Dollar there. You know who’s next to it? A grocery store. That’s who! If you look further down East Michigan Avenue, there’s already a dollar store there too. You know who’s next to it? Another grocery store!
GROCERY STORES?! Uh, what? Never mind.
I work in Dearborn, Michigan.
In downtown Dearborn — just west of Oakwood — there is some marvelous multi-story mixed-use development there (that was built in the last ten years) with retail and restaurants on the ground floor and bright, hip apartments on the upper floors. When people talk to me about Water Street, I can’t help but picture West Dearborn. They have a Buffalo Wild Wings, a Cold Stone Creamery, BD’s Mongolian Grill, Starbucks, Cheli’s, Jimmy Johns, Rio Wraps, PizzaPapalis, and Post Bar.
Uh, what? Neverfuckingmind.
Before you call me names and insult my family, take this all with grain of salt. Writing this was remarkably fun and cathartic.
This argument shouldn’t be made around taxable value or purchase price. The potential of $210K would probably go towards a portion of a bond payment, but there isn’t much long-term financial freedom created. The General Fund tax revenue is nice as well, but not a panacea either.
The real value of this project is it gets the floor of the Water Street DDA district closer to break-even. When the DDA district was expanded, the property had a value of $3.2M. The property now has a value of ZERO. Family Dollar would only get the project an eighth of the way back to break-even. This City can’t even begin collecting the extra DDA tax capture on the property because the project is so underwater. After Family Dollar, we would still need another $2.7M worth of taxable development.
In order to complete Burger King, we were going to use a portion of the sale price to complete the infrastructure and then re-capture it through the Brownfield plan. That isn’t required of this proposal.
The Congress reference was really, really good. It’s very inappropriate to appreciate one’s own work in one’s own blog, but that’s quality.
As much as people will criticize the reusability of this proposed project, this town is filthy with obsolete buildings that are hard to re-use. All you have to do is look at downtown. There are some buildings that present big challenges for re-use, but they are not insurmountable. The potential reusability of Family Dollar is hardly a deal-breaker either.
Some people are still going to continue to bitch about the zoning and PUD process, but those are misguided arguments. For zoning to really be an issue, it would mean that every single planner that has worked for the City since 2000 has totally screwed this up. Is that really what those critics are saying? If they are, then they are really assholes (the critics, not the planners).
People are going to feel attacked when it comes to the Straw Man portion of the screed. There was no malicious intent. We’ve run out of arguments for and against development at Water Street. The arguments are silly at this point.
Ypsilanti has a lot of restaurants, bars, coffee shops, and the like. Those are not high-paying, high-tech jobs. The Sidetrack recently announced plans for a big expansion. Those 30 new jobs that are being created aren’t going to be high-tech jobs, but that hardly means Linda French shouldn’t expand. Hopefully no one is going to try and run out the new tea shop slated for downtown or the hippie-ish culture shop in Depot Town because they aren’t a Google spin-off.
Also, has anyone ever been to a dollar store? THIS is the weekly flyer. It has soda, chips, coffee, cleaning supplies, ice cream, paper towels, small appliances, and toiletries. That stuff is somehow evil for our community? Those are the products corporate America uses to prey upon low-income and / or minority families? Yeah, yeah. Chips and soda aren’t the best, but you can buy them at the Food Co-Op too.
I realize we have places you can already purchase those products, but my argument about restaurants shouldn’t be dismissed. I can get a really good hamburger in more than ten places within walking distance of my house. Does that mean if a new bar / restaurant opened up tomorrow, we should shun it if sold hamburgers?
This town has always had a problem with competition. I’ve actually heard real, local business people complain if a new art gallery, shoe repair shop, clothier, or [ blank ] was moving in because we already have an art gallery, shoe repair shop, clothier, or [ blank ] and we don’t need the competition.
If Family Dollar really does come here and that upsets your delicate sensibilities, don’t shop there. I’m the worst consumer in the world, but somehow the businesses of Ypsilanti manage without me.
I also liked my jab at the proposed east side recreation center. A lot of the very same arguments against Family Dollar apply to the rec center. The rec center won’t bring tax revenue, foot traffic, or high-paying high-tech jobs either, but it’s still a fabulous project and an incredible opportunity. Family Dollar is neither fabulous nor incredible, but if you are out there protesting Family Dollar, your sign better have NO ON REC CENTER on the back.
I’m not claiming that bringing a Family Dollar to Water Street will mean a grocery store will follow. I’m just poking fun at the notion that dollar stores are the dregs of the world and would discourage other entities from locating to Water Street. There are dollar stores right next to grocery stores in Wayne, Canton, Dearborn, Dearborn Heights, Taylor, and Westland (among others).
The West Dearborn comment was obtuse and incomplete. The only entities that are going to be able to afford rent in brand-new Water Street construction are most likely going to be chain stores. Maybe we would be so lucky to be battling over a Potbelly or Panera opening up shop at Water Street one day.
Finally, there is a very bizarre, very subliminal undertone that flows through every Water Street discussion. There are racial implications to gentrification that should not be ignored. All of this talk about “tone” should make us a little uncomfortable.
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November 18, 2012 @ 2:28 pm
You are just such a douche.
November 18, 2012 @ 4:09 pm
Thank you for this writing. I see how we are thinking differently on this subject.
I believe that carefully deciding upon how the high visibility Water Street property develops would ultimately improve tax revenues and home values by improving quality of life and pride in Ypsilanti.
The Rec Center will build and improve Ypsilanti,as well as increasing exposure to downtown businesses because of the traffic moving eastward. Family Dollar is a very poor companion business to the REC Center.
I speak for many people who are calling for careful crafting of the downtown area. In my opinion, settling for a sub-standard business like Family Dollar, will entrench and perpetuate a low-income, broken down, poverty stereotype of this city which is not true.
You write, “If Family Dollar really does come here and that upsets your delicate sensibilities, don’t shop there.I’m the worst consumer in the world, but somehow the businesses of Ypsilanti manage without me”.
Yes, if you were a consumer you would realize that the business climate and development of retail and restaurants in downtown Ypsilanti, Cross Street and Depot Town is improving.
You also might realize that holding out for an independent business that offers what the constituents (that you’re “joking”) are asking for would increase business throughout Ypsilanti. A thriving, vibrant downtown is good for business.
You also write, “This town has always had a problem with competition. I’ve actually heard real, local business people complain if a new art gallery, shoe repair shop, clothier, or [ blank ] was moving in because we already have an art gallery, shoe repair shop, clothier, or [ blank ] and we don’t need the competition”.
Hmmmmm. I don’t know a lot of the business owners on Cross Street or in Depot Town, but I have never met a more cooperative group of business owners then in Downtown Ypsilanti. Your statement is untrue for us. Downtown Merchants welcome and encourage new businesses. In fact right now we could use more clothiers, expecially children’s and men’s, a bookstore, a deli/market, home goods
We carefully note the lack of visits to our shops and restaurant by the City Hall that represents us. We don’t care if you buy anythng but this is especially directed to the DDA…leave your offices, walk the city, find out how we’re doing once in a while. We don’t want to tell you how to do your job, but we do want you to hear our voices. Draw from our expertise as retailers and restaurateurs.
We follow the decisions made by this council and the DDA in regards to the development of the 3 downtown areas. In the downtown area at least, the consensus is that there is little effort to get to know us.
Ahhhh, people being people. All we can do is listen to one another openly, get all the facts, and try to do what’s best for the city.
My question- Exactly what has the effort been to entice, introduce, inspire businesses to develop on the Water Street property? Is there anything that the retail/restaurant community can do to help? Isn’t there someone with a lot of money out there who loves Ypsilanti and is willing to try something creative and sustainable. Sounds like you get a great deal on the land.
November 18, 2012 @ 10:45 pm
Not sure what “tone” this post sets for our community, but, otherwise, Councilman Robb, pretty spot on.
November 19, 2012 @ 11:59 am
Regarding “tone” and subliminal undertones, you might enjoy: