Insurance man pushes for elusive downtown grocery store
Everybody thinks it would be “awesome” but it never happens. A grocery store in downtown Lansing is a humble dream compared to a casino or a performing arts center, but it has proven just as elusive.
Paul Rathbun thinks the time is right. Cows are not kept here, and neither are coolers, but this man wants his milk.
Last summer, Rathbun, a partner in the Rathbun insurance agency, bought the for- mer Rum Runners, at 601 E. Michigan Ave., at the northeast corner of Michigan and Cedar Street, across from the ballpark. He has the building nearly cleared out, listed the property last week, and he’s pushing for a downtown grocery store as firstfloor tenant.
The cleintele, Rathbun said, would come from the new apartments going up downtown and an established coterie of loft dwellers, including himself, who don’t want to get into the car to pick up the day’s needs.
Rathbun said he’s willing to “cut a deal” with a tenant who commits to starting a grocery store. He plans to live in the 2200-square-foot space above the store and rent the lower level.
“Good luck with that,” commented Shirley Decker Prescott, co-owner of Okemos-based Mert’s Meats.
Prescott offered a painfully recent cautionary tale. Two weeks ago, Mert’s closed its Lansing store, at1629 E. Michigan, several blocks east of downtown, after three years. The Lansing store specialized in meat, but it also had a modest variety of groceries.
Prescott said the Lansing store got “great support” from downtown workers and Sparrow Hospital employees, but none from the surrounding neighborhood. Business was good for the first two years, she said, but plunged sharply in the third year.
Prescott said an associate of Rathbun approached her about moving Mert’s to the old Rum Runners spot, but she declined.
“I wish him well, but that’s a terrible location and there’s no parking,” she said. “And there’s no neighborhood either.”
But many variables skew the calculus of the grocery business, and it’s hard to compare one situation with another.
Rathbun contends that his spot is closer to downtown and further from the temptation to go to Kroger or Meijer.
He admitted parking is scanty, but he hopes the store will rely on foot traffic anyway. There are a few metered spaces along Michigan Avenue in front of his space, and he plans to get permits for a few spaces in the ballpark lot across Cedar Street.
As for Prescott’s “no neighborhood” remark, Rathbun disagrees.
“I agree that there’s not the numbers for a full grocery store,” he said, “but with the right mix of stuff, I have no doubt they would make money, because I live in that neighborhood and people are clamoring for it.”
Rathbun said he pays $1,600 a month for 800 square feet in his current loft, a block east from the Rum Runners spot.
“They’re not the cheapest place to rent,” he said. “The people that live in my building are professional people, they are doing a residency at Sparrow. They walk there, and some of them don’t even have a car. They want to live in a cool building downtown, and they want the whole downtown experience.”
Bob Trezise, director of the Lansing Area Economic Partnership, said it would be “great” to get a grocery store downtown, but it’s hard to tell if the demographics support it.
“Whether we are at the tipping point or not, it’s impossible to say,” he said.
The Lansing City Market, only two blocks away from Rathbone’s building, offers another cautionary lesson. After a long life as a traditional city market, the city tore it down and tried several combinations of fresh produce, dry goods and specialty stores in a new building along the riverfront. None of them stuck. Food emporiums of all stripes failed so often there that city officials started to spin it as a “small business incubator.”
Trezise said there are incentives for a grocery downtown, such as the Obsolete Property Rehabilitation Act, or OPRA, which freezes taxes on a new investment in an obsolete property. The state’s Community Revitalization Program, a tool for mixeduse buildings in urban areas, might help with infrastructure such as a loading dock.
“I’m certain this kind of project could qualify for a CRP,” Trezise said. “If they put a grocery store in that building, it’s reasonable to think that the MEDC and us would be engaged with incentives to make a good go of it.”
Last year, state Rep. Andy Schor, a candidate for mayor of Lansing, sponsored a bill that would direct at least 5 percent of community revitalization money in Michigan toward helping develop grocery stores in Michigan urban areas. The bill has passed committee and awaits consideration by the House.
Schor said it would be “awesome” to have a grocery store in the spot Rathbun is proposing.
“Grocery stores make it work in other cities,” Schor said. “This is an amenity that people want and must patronize in order for them to be successful.”
Mindy Biladeau, director of Downtown Lansing Inc., said a market study of the downtown area, which balloons in population by 1500 percent during the day, will be ready by December.
But Biladeau agreed that even with solid numbers, when it comes to retail, a lot of variables cloud the crystal ball. There is no “magic number” that would give a green light to a greengrocer, she said.
“It depends on the mix of products, the location and a lot of other things,” she said.
“The trends are going in the right direction downtown, but whether we’re there or not, who knows?” Rathbun’s would-be grocery is on a prime corner. The building had a long run as the Schetzer (later Schetzer & Sons) menswear store from 1916 to 1971 and did brief turns as an antique shop and furniture store before becoming Rum Runners in 1997. The notoriously rowdy bar with the black walls and dueling pianos upstairs closed in 2013.
This summer, Rathbun’s team soda-blasted the lurid paint off the walls, stripping the interior down to classic urban-loft boards and brick — with one major exception. In a few days, a crew from Volunteers of America will arrive to take custody of a hulking pizza oven still sitting on the first floor. Rathbun donated the oven, the tables and chairs and the other equipment Rum Runners left behind.
The oven is so big the window on the Michigan Avenue side will have to be removed to get it out.
“They took one look at it and said, ‘We can cook 30 turkeys in it,’” Rathbun said.
Now all they need are the turkeys.