Downtown businesses going bust
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East Lansing business owner Richard Hall has seen many businesses come and go during his 30 years in town. Lately, he’s seen a few more going than coming along Grand River Avenue. Hall, a co-owner of Campus Barbers Inc., 621 E. Grand River Ave., said he doesn’t believe the vacancies are caused purely by poor economic conditions.
“There are a number of businesses in transition and a few that just didn’t have the best of luck,” Hall said. “Either way, empty storefronts don’t help business.”
Within the past month, Flats Grill, 551 E. Grand River Ave., and Johnny’s Lunch, 101 E. Grand River Ave., both have closed their doors. And since last summer, East Lansing has seen California Juice Company, 549 E. Grand River Ave.; Memo’s, 321 E. Grand River Ave.; BTB Burrito, 403 E. Grand River Ave.; and E.L. Moe’s Firehouse Grill, 565 E. Grand River Ave., shut down.
The closings since summer have contributed to the more than a dozen retail vacancies along the stretch of Grand River Avenue between Abbot and Hagadorn roads.
Grand River Avenue typically sees some turnover of businesses. The difference this year is that successful businesses are going under, said Tim Dempsey, a community and economic development administrator for East Lansing.
“There are always businesses that come and go. A lot of them going under has to do with the marketing and products and being undercapitalized,” Dempsey said. “But in this economic state, we’ve seen some businesses that we’re a little more surprised by, like Flats.”
College town cushion
While the economy is putting strain on businesses across the country, downtown East Lansing is doing well compared to other local areas, Dempsey said.
College towns are in a position to support many successful businesses, said Douglas Cron, managing partner of Cron Management. But to be successful, businesses must find a niche.
“You have 40-some thousand students, and if you’ve got the right product, you’ll make it,” Cron said. “A place like Neiman Marcus just wouldn’t work here. It doesn’t fit the student population.”
Still, with the number of restaurants closing, traffic to established retail stores takes a hit, said Paul Pickell, manager of Moosejaw Mountaineering, 555 E. Grand River Ave.
With the East Lansing community buffered from the severe effects of the economy, empty storefronts are continually filled, said David S. Ledebuhr, president of Musselman Realty.
Musselman owns the building formerly inhabited by E.L. Moe’s, between Division and Bailey streets. The building has remained vacant since Oct. 3, when E.L. Moe’s closed. However, Ledebuhr said he doesn’t believe Musselman will struggle to fill the space.
“Even with the few empty spots, we have several businesses looking at picking up the leases,” he said.
Cron said developers are trying to make downtown as appealing to small businesses as possible.
“Would I like to see everything full? Yes,” he said. “You’re going to have turnover, people are going to try different businesses, some work and some don’t.”
Smaller struggles
Small businesses face unique challenges in marketing and creating name recognition, a problem often magnified in locations with a transient population, said Michael Rogers, vice president of communications for the Small Business Association of Michigan.
Despite the challenges of marketing, funding out-of-pocket and lacking the protection of an umbrella company, small businesses hold several advantages over national corporations, he said.
“They can be nimble on their feet, and make changes immediately without having to go through executives,” Rogers said. “If they can take advantage of this, the entrepreneurial ideas can help sustain the small businesses now.”
Still, small businesses need some help in the form of federal and state government assistance, he said.
Rogers said the government previously has put up barriers against small businesses, but is working toward easing restrictions.
Gov. Jennifer Granholm signed legislation last week that protects small businesses from $43 million in taxes by providing a two-year waiver on interest from borrowed funds. President Barack Obama also announced Monday his decision to provide $15 billion dollars in aid for struggling business owners.
Dempsey said East Lansing is doing its best to work with local developers to make the area marketable and keep small businesses open.
“We’re always continuing to try and help businesses come up with innovative ways to support the market and existing businesses,” he said.
“We just have to be patient and East Lansing will be on a recovery soon.”
Commentary
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No Surprise
(03/18/09 7:40am)Report
Why the hell does East Lansing have to make this East Village place or whatever it is called in Cedar Village – knocking down full apartments to build more stores that are just going to end up being vacant like the ones all up and down Grand River Ave.
i agree
(03/18/09 8:12am)Report
Because the government is always right and therefore they can take whatever they want from whoever they want as long as it is for the common good…….in their eyes
i don't
(03/18/09 9:02am)Report
I’m sure glad you two understand what you’re talking about.
jacob
(03/18/09 11:49am)Report
This all started when the city starting driving the students further away from the downtown by limiting the number of occupants in a rental home. Now a huge porting of the student population lives in complexes like chandlers crossings, these students mostly shop at the mall. Those places are nice, but they are killing the college town atmosphere. If the city encouraged more students to live near downtown, more businesses would succeed.
common sense
(03/18/09 12:10pm)Report
Students are already going keep crappy places like Taco Bell in business, but the small portion of them cultured enough to go to the Flat’s, India Palaces and Sidestreet Delis of the world are diluted more by pushing them up to Chandler’s and Okemos.
Fewer students results in failed business in downtown college town. Shocking revelation EL city council. Keep up the good work.
young working professional
(03/18/09 1:18pm)Report
Yeah the settled residents in East Lansing never seemed to realize that this was a college town from the beginning and will always be one. Why a permanent resident would want to live right next to a college campus is beyond me. Oh well, as everyone above has noted, they will just shot themselves in the foot by pushing all of the college students away. Let them fall on their face and come crawling back.
Mike F
(03/18/09 2:17pm)Report
Rich Hall is the man. He used to cut my hair when I was a student.
SpartanTom
(03/18/09 2:18pm)Report
Cultured people do NOT go to India Palace. They go to Sindhu’s in Hannah Plaza to get their Indian fix.
cultured
(03/18/09 3:42pm)Report
cultured people don’t go to establishments that don’t pay their taxes….
SpartyOn
(03/18/09 3:42pm)Report
Sindhu’s sucks. I only went there once but it was awful, I’ll take India Palace ANYDAY over them. Also its cheaper.
On another note, EL got tired off all the breaking bottles and loud rowdy students at 3am (can you blame them) and decided to disperse the student body all over Lansing/Okemos/EL.
What you don’t realize is…East Lansing will NOT run out of money, they will arrest more students for MIP, pull over more cars on Grand River for going 26/25 and Tax the university more, East Lansing the city, the counsel, will be fine if EVERY STORE on GR went out of business. And I’d say thats a small price to pay to get all the damn rowdy students away…..
Hans Larsen, IV (The Younger)
(03/18/09 5:56pm)Report
QUOTE FROM ARTICLE:
“The difference this year is that successful businesses are going under, said Tim Dempsey, a community and economic development administrator for East Lansing.”
Is anyone shocked East Lansing’s Economic Development Expert is saying that “successful businesses are going under.”???
I am informing him that, by definition, a successful business in NOT one that is going under.
This is the same guy pushing for more rental units for big developers while limiting rentals units for the small guys, while acknowledging that adding more units worsens the oversupply of housing. Here is Dempsey’s quote from last November: http://statenews.com/index.php/article/2008/11/rental_restriction_overlay_practice_questioned
“MSU’s enrollment has remained fairly steady, which means there isn’t really a market for more rental units,” Dempsey said.
“If you add too many [rental units], you’re going to saturate the market, you’re going to see more vacancies, and you’re going to make more problems,” Dempsey said.
Next, Dempsey blames the businesses failures on their own laziness:
“A lot of them going under has to do with the marketing and products and being undercapitalized,” Dempsey said.
Why doesn’t Dempsey stop picking on these small retail entrepreneurs, who pour their blood, sweat, and tears into their businesses?
Dempsey should tell us how CAPITALIZED Strathmore Development is, the anointed developer of City Center II? Why do they need $30 Million Dollars of taxpayer-backed bonds—PUBLIC DEBT—to make CC2 happen?
How CAPITALIZED is Albert Place Condos, if City Council had to urgently give them rental licenses, because they were unwilling to sell the Condos at Market Prices?
How CAPITALIZED is the East Village Project if it requires $250 Million Dollar of taxpayer-backed bonds—PUBLIC DEBT—to make it happen?
Some of these small retailers in downtown EL get short by $10,000 or $20,000 and it becomes a major cash flow problem. The question we have is what are you doing to help THEM—with a combined $100,000 problem—when you are throwing $300 Million Dollars of Taxpayer-Backed money at City Center II and East Village?
The biggest eyesore on the street is where the City Center II development is. The former Citizens Bank building is privately owned, and CITY OF EAST LANSING OFFICIALS caused extensive smoke and fire damage—conducting drills, and, on that basis, determined that the building is functionally obsolete. This is a matter of public record. It was a perfectly good building. Look at the windows on the 2nd and 3rd floors from Grand River; you can see all of the fun the Fire Department had in there; looks like a paintball party. The developer of Strathmore stated in sworn testimony that his company had been pushed “to the point of insolvency.” How CAPITALIZED is Strathmore? How SUCCESSFUL is Strathmore? Is this why Dempsey stated that successful businesses are the ones going under? Is that also a future prediction for City Center II?
Hans Larsen, IV
(The Younger)
DISCLOSURE: I DO NOT OWN RENTAL PROPERTY IN EAST LANSING; I AM A CONCERNED CITIZEN TAXPAYER PERFORMING BY CIVIC DUTIES.