Real Estate: BID will recruit retailers for downtown

One of the most common complaints about downtown Milwaukee, from residents and workers alike, is that the area’s retail selections are too limited.

The Downtown Milwaukee Business Improvement District (BID) wants to do something about that.

The BID, formed in 1998, has worked to promote downtown, improve the area’s image, and attract and retain businesses downtown. BID officials believe they have made significant progress toward those goals and the downtown area has improved significantly during the last decade.

The next step in the evolution of downtown’s revitalization is to attract more retailers, BID officials say. They have identified the lack of stores downtown as one of the area’s most significant weaknesses.

The BID hired the Washington, D.C.-based consulting firm Downtown Works to develop a retail strategy for downtown Milwaukee.

The central component of the strategy is the addition of a retail recruiter for downtown Milwaukee. The recruiter will act as a matchmaker, connecting retailers that would be a good fit downtown with building owners and their brokers.

The BID hired Deanna Inniss, the founder and owner of Freckle Face, a children’s clothing boutique located at 244 N. Broadway in the Historic Third Ward, to be its retail recruiter. Inniss works about 28 hours a week for the downtown BID in her capacity as the downtown retail recruiter.

Prior to opening her store in the Third Ward, Inniss was the manager of children’s product development for Menomonee Falls-based Kohl’s Corp. She previously worked in several different positions in New York for The Gap Inc.

“I love retail, and I’m extremely passionate about Milwaukee,” Inniss said. “We have awesome arts and culture here. We have great restaurants. We have everything set up for retail (downtown). I want to be part of the change. I know it will be a challenge, but I’m excited to take that challenge on.”

Downtown Works conducted a detailed analysis of the downtown Milwaukee retail market, identifying the area’s assets, its current retail lineup and what the key streets are for retail space downtown.

Inniss will use that information to target and recruit retailers. Much of her time will be spent cold-calling retailers to sell them on downtown Milwaukee.

The goal is to attract a mix of national retail chains and local independent retailers, Inniss said. The local independent retailers are more likely to take a chance on under-retailed downtown Milwaukee, especially as many national chains are pulling back during the recession. If enough independent retailers demonstrate that downtown Milwaukee is a good place for stores to do business, then more national chains will come, she said.

The Third Ward is a good example. Anthropologie and Design Within Reach opened stores there after independent retailers demonstrated that the neighborhood was a good place for retailers, Inniss said. While not part of the downtown BID area, the Third Ward complements the downtown and demonstrates that urban storefront retail can succeed in Milwaukee, Downtown Works says.

Will it work?

Some retail brokers in Milwaukee say the downtown needs more people living, working and visiting the area to attract more stores.

“You need a major night and weekend traffic generator (downtown),” said Peter Glaser, a retail broker with CB Richard Ellis. “You need more of them (to bring more people and then stores downtown).”

“For the national retailers, the population and the sales aren’t there to justify them investing in a downtown Milwaukee location,” said Cory Sovine, assistant vice president of Siegel-Gallagher.

However, Downtown Works principals Scott Schuler and Margaret McCauley say their analysis of downtown Milwaukee shows the area can support more retail stores than it currently has.

“Of course you can use more of everything downtown,” McCauley said. “But that shouldn’t keep you from having some retail downtown.”

Downtown Milwaukee has about 16,000 residents and 78,000 employees (including 54,000 white collar workers and 24,000 blue collar workers). The downtown is accessible to most of the metro area, which means the region’s 1.4 million residents and 1.5 million annual visitors could easily come downtown to shop if they wanted to, according to Downtown Works.

Based on those demographics, the downtown area should be able to support about 1.5 million square feet of retail space, Schuler said. Currently the downtown area has about 1.1 million square feet of street level retail space, which is what the Downtown Works study focused on. In addition, the Shops of Grand Avenue have some interior retail space off the street and the Third Ward provides additional retail space to serve the downtown market.

The downtown area has a high retail space vacancy rate with about 148,000 square feet of vacant retail space and about 229,000 square feet of street level space that is not being used as retail space, but should be converted, Downtown Works says.

The Downtown Works study only focused on the street level portion of the Shops of Grand Avenue. The 450,000-square-foot mall is 71-percent occupied, said Ralph Peterman, regional vice president of operations for the mall. The mall had an occupancy rate of about 85 percent before the Linens ‘n Things store closed, he said. The mall is in talks with a “regional retailer” that may fill that space, Peterman said.

“Financially, we’re doing OK,” he said. “You can pretty much count the national retailers out as far as expanding downtown. We have to go after the local and regional retailers.”

The Downtown BID’s focus should be on attracting retailers to fill existing space, not to build new retail space, Schuler said.

The right mix

In addition, the downtown area needs an appropriate mix of retailers to maximize the downtown retail market’s potential, Downtown Works says.

Currently the downtown does not have an oversupply of any retail category, McCauley said. Full-service restaurants are well represented and there are enough fast food and quick service restaurants. However, downtown is underserved for apparel and fashion accessories retailers, she said. Only 9 percent of downtown retailers sell apparel and fashion accessories. Downtown is also lacking in home furnishings retailers, McCauley said.

The Downtown BID will not recruit restaurants, drug stores, convenience stores, banks or chain stores that are already located in the suburbs.

To be a successful retail area, downtown Milwaukee cannot rely on downtown residents and workers alone and needs to attract suburbanites to shop downtown, Schuler and McCauley said. To do that, the area must provide independent retailers and chains that suburbanites cannot find in the malls near their own homes, they said.

Therefore the BID has no plans to recruit and the city should not provide incentives for big-box stores such as Target, Kohl’s, Best Buy and Home Depot, which are all commonly found in the suburbs, McCauley said. If those stores want to be located downtown, they should be welcomed, but the city should not provide incentives for those types of stores, because they will not bring shoppers from the suburbs to downtown, she said.

An urban entertainment district, such as the failed PabstCity project or the proposed Catalyst development by Charlotte, N.C.-based Ghazi Co., would not help downtown retail, McCauley said. “We have found few (downtown entertainment districts) to be successful,” she said.

There is a common public perception that there is a lack of parking for people shopping downtown, but that does not jibe with reality, McCauley said. “If you had a great retail mix down here, people wouldn’t complain about paying a few dollars to park,” she said.

Clusters needed

One of the biggest challenges for the downtown retail environment is that there are too many gaps created by surface parking lots and parking structures between retail spaces, McCauley said. Retail recruitment efforts should focus on clustering stores together to create synergies with each other and establish an attractive shopping destination, she said.

The work to improve the downtown Milwaukee retail environment will take some time, McCauley said.

“This is a long-term commitment,” she said. “This is not something that is going to happen overnight.”

One of the important steps will be to get building owners to buy into the Downtown BID’s new retail vision.

“We’re going to sell them on a vision of what downtown can be,” McCauley said.

Skeptics that doubt downtown’s ability to attract quality retail stores will be proven wrong, just as people a decade ago who doubted that anyone would want to buy a condo downtown were proven wrong, said Beth Nicols, executive director of the Downtown BID.

“To all the naysayers out there, we say, ‘Watch us, we will succeed,'” Nicols said. 

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