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Sweetwaters Coffee & Tea, a 20-year-old local coffee shop, plans to open a new store in downtown Ann Arbor.

(Patrick Record | The Ann Arbor News)

Sweetwaters Coffee & Tea, a 20-year-old local coffee shop, plans to open a new store in downtown Ann Arbor.

A franchisee signed a lease to open a 2,020-square-foot Sweetwaters store in the former flagship Borders building at 604 E. Liberty St.

Sweetwaters general managers Julie Depowski pours steamed milk into a hot chocolate during the grand opening of a location at 735 W. Cross St. in Ypsilanti.

"We're just super excited to be on campus," said Sweetwaters Coffee & Tea owner Lisa Bee. "We have a lot of students who are customers, but the main concern is we're far from campus. We're very happy to bring Sweetwaters to them."

Lisa and her husband, Wei, founded Sweetwaters Coffee & Tea in 1993. The coffee shop has three existing locations in Ann Arbor: one on East Washington Street downtown, one in Kerrytown and one on Plymouth Road. The Kerrytown and Plymouth Road stores are franchises.

Bakery items are on display at the Sweetwaters Coffee & Tea store in Ypsilanti.

A Sweetwaters store opened on Ypsilanti's Cross Street in March.

"We've been very happy with that store," Lisa Bee said. "Ypsilanti has been a great city to work with."

Sweetwaters is the fourth confirmed tenant planning to open in the former Borders building downtown, joining Knight’s Steakhouse, Slurping Turtle noodle house and Huntington National Bank. The building, situated on the corner of East Liberty and Maynard streets, is being redeveloped and subdivided into five retail spaces by Ron Hughes of Oakland County-based Hughes Properties.

The University of Michigan School of Information and PRIME Research signed deals to occupy the second floor of the building.

“Sweetwaters Coffee will add a strong local retail aspect to the tenant mix,” says a news release from Colliers International Ann Arbor, the company marketing the former Borders building for lease.

Joe Palms of Swisher Commercial represented the franchise owners, Sheila Qin Li and Roy Xu, in the deal.

Bee said the goal is to open the new Sweetwaters store in spring 2014. She said she will be "very involved" in helping the franchise owners open the store, including helping with design, build-out and staff training.

Although downtown Ann Arbor has its fair share of coffee shops, especially on the blocks surrounding the University of Michigan's campus, Bee said she's not worried about the competition.

"Every single one of our competitors are there. I think it just brings more people into the culture of drinking coffee," she said.

Lizzy Alfs is a business reporter for The Ann Arbor News. Reach her at 734-623-2584, email her lizzyalfs@mlive.com or follow her on Twitter.