JC Reindl

Detroit Free Press

Like an order of organic grass-fed beef, it wasn't particularly cheap five years ago to lure Whole Foods Market to open a store in Midtown Detroit.

But landing another national retailer such as Target could now come easier and require fewer million-dollar deal sweeteners.

A small-format Target store could be a potential anchor tenant for a proposed retail, commercial and residential development across from the Whole Foods store in Detroit's Midtown at the southeast corner of Woodward and Mack a few yards before it becomes Martin Luther King Jr. Boulevard.

The Whole Foods deal involved nearly $6 million in economic development subsidies for the $12.9-million store, including state and local grants and the sale of tax credits, according to press reports. The subsidies went to the developer to entice the grocer through lower rent.

Five years later, with hundreds of new market-rate apartments newly open or under construction and a nearby hockey arena district rising up on the horizon, selling Midtown Detroit to a Whole Foods or Target-level national retailer could be much more a free market business decision.

The value of the site is expected to increase further next spring when the new QLINE street car system begins running up and down Woodward.

"Woodward is the street that everybody wants to be on," said Jim Bieri, a Detroit-based retail consultant with Stokas Bieri Real Estate.

Development experts say that landing a big development deal at Woodward and Mack would likely still require some degree of subsidy and creative financing, but not the heavy subsidies and lobbying efforts that went to luring Whole Foods.

"Whole Foods came together through a lot of things that were not traditional market forces," said Ken Nisch, a retail design and branding expert at Southfield-based JGA. "Whereas I think the Target thing is much more the function of market forces than people pulling strings."

The new Target store — or whichever retailer might end up at the site — would be shoehorned into the 25,000-square-foot ground floor of a future three-story building constructed where there is currently an American Red Cross parking lot and a vacant muffler shop. The proposed building would contain another 20,000 square feet or so of retail or restaurant space and have office tenants on its second and third floors, according to a preliminary site plan obtained by the Free Press at a development conference.

Development insiders say that Target has yet to sign any deal to go into Detroit. But if Target were to anchor the Woodward and Mack development, the store might open as a TargetExpress, an urban format typically around 21,000 square feet. A suburban big-box Target is about 130,000 square feet and a midsize CityTarget format is 60,000 to 100,000 square feet.

Nine of the 15 stores that Target opened last year were smaller format stores. The retailer views these stores as a way to attract urban customers who don't usually shop at Target. The stores also double as "urban fulfillment centers" for picking up merchandise bought online.

"We have a huge opportunity of untapped markets we can reach with these new stores, bringing Target to new guests and new guests to Target," said Target's Chief Financial Officer Catherine Smith in shareholder conference call this year.

"Each store is made to order with a unique assortment, tailored to its neighborhood," she said. "For instance, in our downtown San Francisco store, they've added more healthy grab-and-go snacks and more party supplies in response to guests in nearby office buildings."

A quick survey of Detroiters walking past the potential Target site on a recent afternoon found a strong desire to go shopping there -- if such a store ever opens.

"If Detroit was ready for a Whole Foods, then it is definitely ready for a Target," said Mack Hendricks, 41, who lives in Midtown. "If this Whole Foods is always busy, I'm sure this Target will be just as busy or busier."

The site of the proposed retail, commercial and residential development was all once owned by the Red Cross, whose southeast Michigan chapter maintains its campus and headquarters on the same block.

The Red Cross sold parcels of the land in 2009 and last December to corporations controlled by a father and son, George Nyman and Adam Nyman, whose Birmingham-based Professional Property Management is the project's developer.

Adam Nyman has said it is too early to publicly discuss the Midtown project and the Red Cross did not respond to numerous messages.

A grocery coup

The Whole Foods, which opened in June 2013, on the eve of the city's bankruptcy, was considered an economic development coup for Detroit. The 21,500-square-foot store has since proven a big financial success and draws shoppers from a variety of income levels with its diverse selection of goods and price points. A common gripe is the store is too small and too busy without enough ground-level parking. The store is also across from a bustling Starbucks.

Yet a Detroit location was considered a risk for Whole Foods when the high-end grocer made its plans back in 2011, before the current revitalization boom occurring across the city's greater downtown.

Opening in Detroit was viewed almost as a philanthropic act when most economic news out of Detroit then was gloomy. “It’s one of those developments that you do for reasons beyond pure economics," site developer Peter Cummings said at the time.

Contact JC Reindl: 313-222-6631 or jcreindl@freepress.com. Follow him on Twitter@JCReindl.