The chalets at the Western Market in Muskegon offer a low barrier for retailers to test the market with new concepts or products. The chalets at the Western Market in Muskegon offer a low barrier for retailers to test the market with new concepts or products. COURTESY PHOTO

Smaller spaces, niche products move Muskegon’s retail sector forward

BY Sunday, June 09, 2019 07:00pm

MUSKEGON — Building on the success of the Western Market chalets and other developments, Muskegon officials continue to look for ways to expand retail offerings, support budding entrepreneurs and attract shoppers.

Most startup retailers need a low cost of entry, a smaller space and high visibility with steady foot traffic. As such, it’s important to be intentional with development and focus on incremental growth that can support the market and withstand a changing retail landscape, said City Manager Frank Peterson.

“What we have is sustainable,” he said. “We’re trying to fill lots of small spaces rather than lots of big spaces, and it’s much easier to do.”

As more residents move downtown, it will help drive more retail offerings, he said. Officials are focused on creating an experience with unique products and services and a healthy mix of businesses for locals and visitors alike.

“We want to make Western Market and shopping in downtown Muskegon as much about the experience as it is about the retail,” Peterson said.

Now in its third season, Western Market had a busy opening weekend over Memorial Day and continues to attract a diverse array of retailers and shoppers. A variety of other businesses have opened or are slated to open this summer in downtown, including Boom Town Market, a small grocery store on the first floor of the Highpoint Flats apartment building at 285 W. Western Ave.

Four businesses also have filled first-floor units at the Heritage Square Commons development: Skye Blu Boutique, a women’s clothing boutique; Drip Drop Drink Café; The Crue barbershop; and a law firm. 

Skye Blu and Drip Drop Drink also are two examples of businesses that moved into their own space after starting small in the Century Club Retail Center and Russell Block building, respectively.

Besides waiting and watching as more residential and mixed-use developments start and finish construction, city officials are keeping a close eye on national retail trends. Malls across the country continue to close and lose anchor tenants because of the rise in online shopping and delivery options.

“If we went ahead and opened up 45 retail stores downtown, they wouldn’t do very well,” Peterson said. “After we have incubated the residents and the entertainment and restaurants, the retail comes after those things.”

Once the former Ameribank building is sold and redeveloped, the city would like to see the first floor become a retail incubator, Peterson said. That could take one to three years because the building is a gutted shell and needs to be totally redone. 

Peterson envisions 10 to 15 retail spaces ranging from 150 to 300 square feet, similar to the smaller, open retail spaces inside the Century Club building. It could become a spin-off of the Western Market chalets or a permanent location for those tenants since the parcel where the chalets sit currently is listed for sale. The space could serve the same or similar tenants and provide a year-round market experience.

A number of Western Market tenants have expressed interest in permanent space if the city had a location, Peterson said.

“We’re going to encourage it,” he said of creating a market-type atmosphere on the first floor of the Ameribank building. “We can put them all around three sides and really fill in the space.”

Clearing hurdles

Muskegon implemented a form-based code five years ago, which requires every building in the downtown core to accommodate retail and promote walkability. The city has worked hard to push for residential density to support current and future retail, Peterson said.

However, many developers have trouble finding tenants to fill a 2,000-square-foot storefront because startups don’t need that much space or they cannot afford the rent. It’s a challenge in cities across the country, said Dave Alexander, executive director of Downtown Muskegon Now.

“The biggest hurdle is to fill the commercial retail space on the ground floor,” he said. “It is the most difficult and usually the last one to fill.”

In Muskegon, developers are “sharpening their pencils on rates,” Alexander said. In the future, he foresees more incentive programs that may allow a retailer to start out with a lower rent that increases over a period of time.

That is one reason the Western Market chalets have been so successful. The micro-retail size serves startups more effectively, plus they are “just cute,” Alexander said. It was a small investment that made a huge impact.

“The chalets have been phenomenally successful as being a best practice,” he said. “They have added such vibrancy to our downtown experience.”

The city-owned chalets have transformed a once-vacant downtown block and appeal to both visitors and residents. Western Market also expanded foot traffic between the Muskegon Farmers Market and shops and restaurants in the blocks beyond Second Street.

Favoring startups

The seasonal chalets have a low cost of entry for hobbyists, startups or retailers looking to open a physical store or a second location. Rent varies from $1,325 to $2,125 for a season, which runs from late May to mid-December.

Entrepreneur and graphic designer Jacque Edwards wanted a retail space for her Clean Ocean Clothing LLC merchandise, which she also sells online. Edwards moved to the area with her fiancé from Washington, D.C. Her business this year became a new tenant of the chalets, whose affordable rent made the store possible. She’s also received advice from Grand Valley State University’s Muskegon Innovation Hub.

“We decided to move here instead of Grand Rapids because of opportunities like this,” she said. “We had a really great opening weekend, and I’ve gotten good feedback from people because I have sort of a niche product. … I think it’s a cool program. I hope it sticks around.”

At the Western Market chalets, shoppers can explore 17 specialty vendors selling everything from gelato, caramel corn and fresh-baked sweet treats to clothing, handcrafted jewelry and rustic wood furniture. 

Skee’s Tees by Y-Knot Embroidery LLC returned for a third season and sells a variety of Michigan-themed clothing and merchandise. Owner Tammy Whynot owns a permanent location at 878 Jefferson St. in Muskegon and does embroidery and screen printing for area schools.

Whynot’s friend Renea Smith works at the chalet and said it remains busy in the summer. The traffic from cruise ships, various festivals and events has helped.

“I think it’s been a great thing because we really didn’t have a lot of places to go shopping,” she said. “It’s brought people down here and helped the economy. Everybody has something a little bit different. You’re not just walking into the same stores.”

Experience matters

Alexander said both the Western Market chalets and the Century Club Retail Center, a project of private developer Gary Post, have been good retail incubators. Alexander, meanwhile, will assume his new role with the Downtown Development Authority in July and continue helping startup businesses find the best space for their needs and budget. He worked with The Crue owner Emily Prow for two years to find the right space. 

“We know where the spaces are, the most desirable locations and what lease rates are off Western,” he said. “We’re out trying to do match-making all of the time.”

The DDA has $100,000 in its budget starting July 1 with which it wants to consider incentives for downtown development, Alexander said. Some of that could be used for retail incentives, especially as the DDA ramps up its efforts in coming years.

Alexander also plans to recommend the DDA conduct a retail market study and explore potential niches that need to be filled. He would like to see more destination shops and independent specialty retailers, citing the success of The Cheese Lady LLC, which started in Muskegon and now has franchises across the state.

“There are those are of us who are willing to spend $50 on a little bag of cheese; people will drive and go to find them,” he said. “We need to find retailers that are comparable to that, that bring their own group of customers and customer base to their store.”

The chalets fill a niche the digital world of Amazon can’t, and Alexander sees that as the key to any downtown’s retail success.

“People still want to touch and feel their retail experience,” he said. “It’s going to be independent, locally owned businesses and they are going to sell destination products.”

At the end of the day, retail is only one portion of the downtown system, Peterson said. 

“The best thing we can do for retail is to build a strong entrainment/cultural market downtown to attract year-round residents and visitors,” he said. “Retail is becoming less of a destination for some people, so we need to find other ways to get them here aside from simply coming to shop.” 

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