In Focus Today
9:46 am
Thu April 16, 2009

Vacancies impact a busy Lansing commercial strip

(Delta Township, MI) – The recession has hit Michigan hard: from the nation's highest jobless rate to daily fears of bankruptcy for the flagship automobile industry and a high home foreclosure rate. Now, some fear business foreclosures may climb. The recession is having an impact on one of mid-Michigan's busiest commercial strips.

Mark Bashore: Pay a midday visit to west Saginaw Highway in Delta Township and you might think the recession has taken a detour around this densely packed retail area: Here, a half-mile west of Waverly Road, hundreds of cars still whiz by every few minutes.

But from where I'm standing, at least five signs hawking commercial space are also visible. They're a noticeable reminder of the current recession. A survey released last month by East Lansing's CBRE Martin found the commercial strip center vacancy rate in the area west of Lansing was at 21 percent. That's almost double what it was a year ago.

That makes Kelly Figuerido's job tougher. As Delta Township's code compliance officer, it's her job to cite businesses for violations like empty sign frames and grafitti.

At 18,000 square feet, this former carpet store is one of the biggest vacant commercial spaces in Delta Township.

"The sign ordinance requires that signs that are abandoned that they be replaced with a blank panel or painted over, and you can see that I'm going to need to get in touch with them to repaint that sign," Figueriedo says.

Because of the spending slowdown, businesses and lenders are wary of starting something here. Figueriedo says the toughest part of her job is tracking down out-of-state owners, and working with them and banks as commercial foreclosures creep higher. She says the structures are on the public's radar.

"Oh, I get complaints daily," says Figueriedo. "And we'll address them as we get them, and we try to monitor as well with or without complaints as we see them."

All over, the economy has brought new commercial development to a standstill. For years, East Lansing' s Eyde Company has developed properties here and all around Lansing. Mark Clouse is chief financial officer. He says the failure of national chains like Circuit City creates a domino effect that is reconfiguring parts of the West Saginaw strip.

"The less desirable retail locations are probably the ones that are going to suffer first," Clouse says. "Some of those retailers will have to relocate to some of the A' buildings, instead of being in a B' or a C' building, and we may see some consolidation of those things, and perhaps we'll come out stronger in the long end."

The national recession has triggered worries for the future of the strip's biggest business: the Lansing Mall. The mall is owned by Chicago-based General Growth Properties. GGP itself projects its debt will climb to around $7 billion next year. But some analysts respond that the company's properties themselves "aren't broken."

"Conversations with mall representatives have revealed that our mall is still in pretty good shape," says Delta Township planner Mark Graham. "The vacancies are what I call manageable, and again, they're a victim of the national economy, when Old Navy and The Gap and those kind of stores go out and create vacancies."

WKAR scheduled an interview with Lansing Mall officials, but they later cancelled. Out of around 100 mall storefronts, I found 18 vacant. A General Growth spokesman would only say that the mall will remain open, and that the company is focusing on working with lenders to resolve its mammoth debt.

The recession has not derailed the economy on Saginaw Highway. Tens of thousands still drive it daily, many of them customers of businesses that will survive. One shopper expects vacancies to gradually refill.

Margie Lotry says the recession is weeding out businesses like fast food that shouldn't have been here in the first place.

"More people are shopping at Meijer and Wal-Mart and Target and those stores where they can get everything they want in one stop," Lotry says.

That kind of economic Darwinism has been a common topic during this recession. It suggests a leaner, more durable commercial landscape will eventually take root here. Meanwhile, the obsessive wait for signs of a turnaround continues.