Certain kinds of businesses do well in times of great economic uncertainty. Chief among them are so-called “variety stores” and “dollar stores.” As Howard Levine, the CEO of Family Dollar, one of America’s leading chains operating in this sector recently said to the press, “In today’s uncertain economic environment, value continues to resonate… Our strategy continues to attract not only our core low-income customer, but also middle-income customers with increased frequency.” And, with that in mind, Family Dollar continues to grow. Earlier this year, in fact, the Charlotte, North Carolina-based chain announced plans to open 500 new stores. And, as of yesterday, we learned that the company was interested in putting one of these 500 stores in downtown Ypsilanti, on Water Street. Here’s a clip from AnnArbor.com.
…Ypsilanti received a letter of intent from Core Resources, Inc. to purchase 1.25 acres of the 38-acre site.The property is currently owned by the city and Core, on behalf of its client Family Dollar Stores of Michigan, will pay $210,000 to purchase the land.
Core Resources, Inc. and Family Dollar have negotiated the initial terms including a concept site plan for the property and related building elevations for the potential development based on draft zoning for the Water Street Development…
The purchase of the property will be at market rate and will not require any special incentives from the city. The Ypsilanti City Council will consider approving the letter of intent at its Tuesday meeting, said Mayor Paul Schreiber. If council approves the letter of intent, Core is requesting that the city remove that portion of the Water Street area from the market.
The letter of intent is a non-binding agreement between the city and Core to work for a term of no more than three months on a development agreement…
Ypsilanti’s Mayor, Paul Schreiber, according to the article, is enthusiastic. “I’m in support of it because, first off the building they’re proposing conforms with a lot of the guidelines the planning commission came up with for the Water Street property,” Schreiber told them. “I think that store will bring a lot of foot traffic in the area. I think those two things are major considerations. We have to get started somewhere.”
Unfortunately, many of our downtown business owners don’t share his optimism. Paul Balcom, the owner of Ypsilanti’s beloved Rocket has gone on the record asking Council to consider the proposal carefully before moving forward. “I strongly recommend city officials investigate where Family Dollars locate and how they benefit those neighborhoods,” said Balcom. “This is detrimental to those who are working so hard to create a ‘go to’ downtown… and to those that frequent these local, unique businesses.” Leslie Leland of Mix said simply, “HORRIBLE IDEA! HORRIBLE! NO!”
And, I, somewhat uncharacteristically, took to Facebook to rant upon hearing the news.
In the interest of fairness, some people appear to support our Mayor, sharing his opinion that it would, all things considered, be a positive for Ypsilanti. Here, for instance, is a comment left on AnnArbor.com by a fellow named Chase Ingersoll.
Family Dollar is a precise fit for the socio-economic class that inhabits the adjacent neighborhoods. You minority of Ypsi’s who would prefer and can afford a health center, juice bar or a Whole Foods, can just move to Ann Arbor and stop trying to force your bourgeois tastes upon Ypsi’s proletariat.
Maybe he has a point. Maybe this is the best that Ypsi can hope for. One of his fellow AnnArbor.com readers certainly seems to think so. “If we can get rid of the human garbage that pollutes Ypsi,” he says, “maybe it could be a civilized town, where people want to come and invest.” Until then, I guess we should just accept they fact that we’ll never be able to do better than plasma centers and dollar stores.
And that was sarcasm, by the way. (For what it’s worth, I happen to think that most “human garbage” is online in Ann Arbor these days, and not on the street in Ypsi.)
Before we get into the specifics of Water Street, I think it’s worth noting two things. First, there are already two Family Dollar stores in Ypsilanti. (One is at 1001 Emerick Street, and the other is at 1821 East Michigan Avenue.) And, second, from what I can tell, they pay their sales associates about $7.44 an hour on average, which, in Michigan, is a whopping $.04 an hour above minimum wage.
It’s also worth mentioning, I think, that several communities around the United States are pushing back against the Family Dollar juggernaut, making the case that their presence in a neighborhood brings down property values, and makes real, sustainable economic development less likely. Among these communities are the Cascade area of southwest Atlanta and Tampa, Florida. The following comes from a site called NoFamilyDollar.com.
…Family Dollar has a bad reputation, not only for their workers, but also for their prices. Family Dollar has been found guilty of violating federal overtime laws, settling for over $35 million dollars for their illegal practices (Source – USA TODAY), by forcing employees to work without overtime pay, and has been accused of discrimanatory practices. Additionally their business model is set up around offering discounts on anchor items (such as Dish Soap) and then marking up all other items, so that a misled consumer actually spends more than at the competition.
…All Family Dollar’s net profits are taken out of the community. All profits are taken to the company’s headquarters in North Carolina. The net impact of this business being here to the benefit of the community on a local level is in the negative…
At this point, I should add that I can see why members of City Council and our Planning Department might be inclined to entertain this offer. They desperately want for something to happen on Water Street that jumpstarts the long-stalled, and much-criticized 38-acre, downtown redevelopment project. This, to my knowledge, is the first serious bid that we’ve received in the past two years, since we refused to sell one acre to a Burger King franchisee. While I don’t think they’re thrilled about the idea of having a dollar store on the property, I think they like the fact that that the building being proposed will at least conform to their design specifications. (Burger King, as I understand it, hadn’t been willing to consider that.) I could be wrong about this, but my sense is that folks are thinking that, at the very least, this will allow us to start building out the infrastructure on the site (roads, electricity, sewer, street lights, etc.) and give us a building which could be repurposed at a later date, after Family Dollar moves on. The idea has merit, but my sense is that Family Dollar puts as little money as possible into its buildings, and, as such, we’ll be lucky if the structure is still standing in 20 years.
The thing that’s most frustrating for me is that we only have one chance to do this correctly. We have something no other Michigan city has. We have a 38-acre parcel of downtown real estate with river frontage, and easy access to the highway, and it’s just about 15 minutes from the airport. This should be desirable property. And, if the economy begins to pick up, it will be. But, once we start building dollar stores, I think that possibility is dead. I don’t know that the Water Street gamble was a good one, but it’s too late to turn back now. We’ve purchased the land and torn down the dilapidated buildings that once stood there. And, after twice being jilted by developers, we’ve sat on it for the better part of a decade, waiting for people to start building in Michigan again. My advice… and I know it won’t be popular, as huge bond bills are coming due, and the promise of $210,000, and a little bit of tax revenue, is better than nothing… is to pass on Family Dollar. Taking this deal, in my opinion, it just too big of a risk. I know turning them down won’t be easy, but we’ve come this far, and I, for one, am willing to wait a bit longer, and not just jump at this out of desperation.
And it’s not as though we don’t have cause to be hopeful. Let’s remember that, assuming all goes well, we could be breaking ground on an incredibly beautiful and inspiring new Water Street recreation center in the near future. And, it seems to me that this could very well bring with it the kind of opportunities that are more inline with the aspirations and potential of our community. With that in mind, I’m inclined to say that we try to renegotiate our bonds, buy ourselves a little more time, and wait for the economic recovery to take hold.
Or, we could take the $210,000, and the promise of a handful of jobs that pay ¢4 over minimum wage, and accept this vision of Ypsilanti as a place that is undeserving of anything better than fast food and chain stores that take our money in exchange for cheap crap, and siphon the profits out-of-state, to the bank account of a wealthy family in North Carolina.
[note: For those who are interested, I've written a lot over the years about how we could better market Water Street, and what we could possibly see there... from a temporary shipping container arts community to southeast Michigan's first urban cohousing development. I don't know that it was one of my best ideas, but this one is still my favorite: "The best thing we could do at this point," I said a few years ago, "is give a small, select number of parcels away to individuals who we feel confident would use them in some compelling way that would, perhaps, set the tone for future development. Toward that end, (I think that we should) give half-acre lots to each of a half dozen builders and architects, with the stipulation that they construct inspired, aggressively green housing units." I still think that would have been incredible.]
update: Whether you agree with me or not, I’d encourage you to contact your representative on City Council and let them know how you feel. You’ll find their contact information here.
update: As some have pointed out in the comments section, Family Dollar, which sells primarily overstock, closeout and seasonal merchandise purchased from other retailers and distributors, is not a true “dollar store” in the strict sense, as they offer several products at higher price points. According to Wikipedia, “while there are many items available for $1, there are other price points as well. However, approximately 90% of the products cost less than $10. With most locations set up like a typical supermarket, the chain deals in food items, clothing and assorted household products.”