Tuesday, May 5, 2020

Rebuilding Escanaba's/Gladstone's Downtown by Marketing Commercial Real Estate to Entrepreneurs

Dilapidated and empty downtown store fronts are an eyesore that detracts from the rest of the community. When store fronts are fully utilized and have thriving businesses bustling with activity the community gains tangible value in terms of property tax, sales tax, employment and long-term investment. The problem many communities like Escanaba and Gladstone face is that they are not sure how to draw new business investment and families into the area. Strategies can be murky and predicting markets elusive at best. Thus, the development of a plan that utilizes local strengths such as real estate, tourism, infrastructure (ports, rail, etc..), natural resources and manufacturing trends is a must for a community that wants to do more than slowly sink into the bog of poor industrial era small cities. In this article the primary objective is to look at potential downtown real estates as an opportunity for the development of tourism, condos, and micro manufacturing in a way that leads to greater potential growth.

There are a number of factors that interrelate such as investment grants, spill over value of full buildings, ordinances, zoning, etc... Only a few will be covered in this section.

Buy and Live-In Strategy:

Escanaba and Gladstone have old fashion building infrastructure that typically hosts retail on the first level and condos(apartments)/offices on the top. Many small towns are able to turn these nostalgic buildings into assets that attract businesses, investments and talent to the area. Allowing living quarters in the same local as a business with mixed usage can create a business-living arrangement that encourages entrepreneurs to move into the area and live and develop their businesses in the downtown area.

Key Point: Attractive nostalgic downtowns can attract tourists and investment with their "small town" historical feel. 

Condos and business mixed usage is more efficient allocation of time and resources for would be small business owners. Business-living arrangements can encourage robust business districts as enthusiastic small business owners improve their neighborhoods and create pockets of entrepreneurial activity that enhance local business attraction. Entrepreneurs create a community of like minded people that have the time and resources to improve their surroundings for both their personal pleasure and the overall attractiveness to customers.

Key Point: Encouraging entrepreneurs to live and develop in the same area leads to cluster growth and expanding businesses.

The buy and live-in strategy requires a concerted effort to be successful in actively draws new business and business owners to the area. To be effective realtors would need to expand their selling opportunities to larger metro areas and focus on attracting people who want to invest locally. That is typically not something they have done in the past as their target market was closer to home. Few would think that someone from Chicago, Denver or New York would want to come in start a business in their small town.

Key Point: Escanaba and Gladstone must offer something unique to investors that allows them to "get out of the city" and start new businesses. 


Most of the downtown allows for E-Commercial use (Chapter 10) with retail front and office space upstairs. In addition, it appears that some micro-manufacturing (i.e. creameries, dyeing, etc...) are currently allowed. Non-conforming living space that is grandfathered (around 50%) allow for residential apartments/condos above buildings. However, the City of Escanaba (and Gladstone) are very flexible and may accept special land use permits when needed if proper justification is offered (Section 205). Furthermore, the City of Escanaba is looking at different options as it pertains to commercial activity, housing and mixed use properties.

As new businesses arrive and purchase buildings there will need to be some flexibility on zoning. That doesn't mean "anything goes" but it does mean that being open to new ideas that include tourism districts such as businesses, micromanufacturing and seasonal/full-time condos can have great potential. As long as it conforms to aesthetic and structural appeal of the area exceptions should be allowed when they are warranted.

You may be interested in the commercial aspects of Escanaba Downtown. If you have questions contacting the Planning and Zoning Department is helpful. Furthermore additional information can be found in Downtown Development Plan  and Escanaba Zoning.

Key Point: Zoning should match the needs of future market changes and be flexible in its approach.

Mixed Use Attraction (Live-Work-Play): 

Starting and owning a business is tough work. People often think of the term "marriage" when it comes to starting a business. The live-work-play mentality fits better with mixed used downtowns. Younger entrepreneurs are often attracted to , "compact, diverse, mixed-use, and walkable places that improve economic, environmental, fiscal, public health, and social outcomes," that complement their generation's needs (Hipler, 2007).

Much of what they want and need should be in the same locality so it logical for such individuals to purchase the buildings, live upstairs and work on their businesses (not to mention seasonal condos). That allows them to work day and night to get things going without the necessity of commuting and travel. We are putting them in places where they can truly focus on the outcomes of their business. That can have benefits for the town as beautification, property value, and jobs (They also create a busier downtown that buy products such as coffee and lunch in these localities).

Key Point: Live-work-play functions well in mixed used commercial areas and attracts younger investor demographics.

Downtown Real Estate Prices/Vendors:

A simple counting of empty store fronts on Ludington (Main) Street found approximately 20 empty buildings. There is likely around 30 ish in the adjacent downtown blocks. Most of these properties under 100K (80K) and need a little work that may amount to around 20 K. Thus the investment for a descent storefront with upstairs accommodations/condos hovers around 100K. That doesn't include any grants or other incentives that could be made available.

Key Point: For approximately 200K people can purchase a business, living arrangement and have start-up capital. 

Key Point: Small business low interest loans can enhance initial investment money to encourage more entrepreneurs to start businesses. 

Target Marketing of Commercial Real Estate:

We won't be able to bring back our downtowns to full health unless we draw talent and resources from outside the area. That doesn't mean that there is no talent to be groomed in the area but that outside talent and resources further enhance local talent in a somewhat isolated community. According to a study in Journal of Urbanism: International Research on Placemaking and Urban Sustainability, promotion and marketing of commercial assets of the city to realize business potential is a key strategy in small town revitalization ( Malizia & Song, 2016).

Where such business properties should be marketed will take some time to research but I can say it would likely be in places where innovation is already in existence such as cities with large universities (MSU, UoM, Wayne State, University of Illinois, etc...). Furthermore we can include larger regional cities (i.e. Ann Arbor, Milwaukee, Chicago, etc...), with places that have an abundance of younger entrepreneurs that enjoy an active outdoor lifestyle.

Focusing on people who have $200K to invest and also have some interest in an outdoor lifestyle and tourism micro-manufacturing is a good place to start. See Neuroscience and Marketing in Delta County. SME and larger manufacturing are more suited to outside downtown where land and larger facilities are available. Thus, where and how to market these properties requires a little thought.

It is not enough to passively list commercial property. If Delta County wants to get serious about selling these properties and drawing new capital into the area it will need to take these listings and market them in a way that raises their stature on the domestic and global market. A more robust strategy mixed with coordination among local/national stakeholders and an investor packet (to be discussed at another point) can go a long long way!

A few cross comparison ideas/places to consider raising awareness of local building and business opportunities. A little more research might consider the effectiveness of each category but this is a good start.

1. Regional Cities
2. Cities with Universities
3. Places with Existing Innovative Clusters
4. Cities with Young Entrepreneurs (25-40).
5. Cities with Higher Incomes and Investments.
6. Places and Media outlets that have an outdoor orientation.
7. Large investment funds and institutions that may be willing to buy multiple buildings and fund new ventures.
8. Immigration Authorities
9. International Investment Forums/Sites

Key Point: Commercial property should be marketed using channels that attract entrepreneurs with investment capital and business "know how". 

Hipler, H. (2007). Economic redevelopment of small-city downtowns: options and considerations for the practitioner. Bar Journal, 81 (2).

Malizia, E. & Song, Y. (2015). Does downtown office property perform better in live–work–play centers? Journal of Urbanism: International Research on Placemaking and Urban Sustainability, 9, (4). Retrieved https://doi.org/10.1080/17549175.2015.1056212

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