The new Borders in downtown Detroit is apparently a strategy of Borders Incorporated and other major retailers to move into “underserved” urban neighborhoods before they fully gentrify. I see this as an ambiguous trend – it could be part of a pattern of donut development where economic activity in the metropolis is either “downtown” or in the exurbs, or it could play a role in helping re-integrate neighborhoods into the greater economic life of the city. If the entire metropolis “gentrifies” equally, there are no problems, but if the development is highly isolated forcing out existing residents, it can be properly seen as a negative phenomenon. Also, it should not be forgotten that locally owned businesses and corporate chains have fundamentally different economic impacts: the first in general re-invest their profits into the local community, and the second effectively suck out money for the profit of the corporation’s executives and stock holders – who may or may not live nearby, or even in the same country. However, Jane Jacobs would have us not forget that both can contribute to the street-level activity that is key to the economic and social success of an urban neighborhood – by encouraging more businesses, and making the area safer. From the New York Times:

“Borders Books and Music is tapping into one of the retail industry’s few remaining new frontiers – underserved urban neighborhoods – with stores in Detroit and Chicago.

In November, the company, a subsidiary of the Borders Group, opened an 8,000-square-foot store in the heart of downtown Detroit at the Compuware Corporation’s new world headquarters building, the first new office building to be constructed there since the 1970’s.

The company is also the main retail anchor for an ambitious new mixed-use retail and residential complex on the North Side of Chicago.

“There’s no doubt that there’s certain rough spots in these trade areas,” said Alex Lelli, vice president for development of Borders, which is based in Ann Arbor, Mich. “But there’s a lot of change coming.”

Of the two projects, the Detroit store is probably the bigger gamble, if only because of the general absence of retail activity of any kind in the downtown area.

“Retail is lacking in downtown Detroit,” said Charles Maday, the chief executive of Exclusive Realty, a Detroit commercial brokerage firm. “All the retailers left. It’s the only major city that doesn’t have even a hardware store.” …

Three other retail operations – a Hard Rock Cafe, a coffee shop and a credit union office – have opened in the building, and leases have been signed for six others, including a Kinko’s, two restaurants and a clothing store.

The Chicago project, called Uptown Square, is also an attempt to bring retail life to a blighted commercial district. Situated in Uptown, a North Side neighborhood that has resisted gentrification for many years, it consists of three buildings, two of them existing and one new, totaling about 80,000 square feet at the intersection of Broadway Street and Lawrence Avenue.

Both of the older buildings – one, in neo-Classical style, originally housed a bank; the other is a terra cotta department store – date from the early decades of the last century. Both have been vacant for many years. …

Increasingly, retailers are taking notice. “Virtually all retailers that are seeking expansion today are considering underserved urban markets,” said Richard Totaro, president of the corporate services division of the real estate brokerage and services company CB Richard Ellis.

The reasons, he said, include “the high densities you find in many inner-city markets and the fact that there’s typically an extremely diversified income base in these neighborhoods.”

There are also numerous competitive advantages for guessing right and being the first retailer to enter a gentrifying neighborhood. … “

> New York Times: “Book Chain Taps Underserved Neighborhoods”

Author: Rob