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Wednesday, November 20,2013

Goodrich-dammerung

‘Cutting edge organic market’ ready to replace iconic store in Trowbridge Plaza, developer says

by Lawrence Cosentino and Andy Balaskovitz
A “cutting edge, organic market” is waiting in the wings to succeed Goodrich’s Shop-Rite in Trowbridge Plaza, developer Kevin McGraw said Tuesday.

McGraw said the store, which he declined to name, “will be here long term and is very well financed.”

He said it would pay from $12 to $15 dollars a square foot, the going rate for most East Lansing retail.

That grocery, McGraw said, wants developers to invest “several million” for a new fa'ade, roof, new plumbing and electrical, and a “complete gutting” of the inside. He offered Goodrich’s “first swing” at the same deal.

He added that the organic market would also require that high-rise housing be completed that is being planned as part of the major development of the shopping center at Trowbridge and Harrison roads.

A plan to put student housing along Trowbridge and on the former Oodles of Noodles restaurant site will trigger soil remediation and other expenses, McGraw said, who made it clear he is willing to undertake the expense.

The organic store also wants a “substantial” fund from the developer for making improvements inside beyond what Mc- Graw has proposed.

McGraw declined to say any more about the organic market.

Whole Foods is already scheduled to come to East Lansing next year, but on Grand River Avenue. Another major national organic chain is Trader Joes, which has six locations in Michigan.

Sprouts Farmers Market, a chain of specialty stores based in Arizona, is also growing quickly with more than 150 U.S. locations since it was founded in 2001.

Two large regional chains are Earth Fare and MOM’s Organic Market. Earth Fare is an Asheville, N.C.-based grocer with locations in nine states, including Indiana, Ohio and Tennessee. MOM’s Organic Market has 10 locations in Maryland and Virginia.

As for 76-year-old Shop-Rite, which has been in the location for 47 years, Mc- Graw said:

“The lease expires in August. It’s just unsustainable. Unless Goodrich’s can pay market rent, they’re closing, regardless of whether this center is developed. That’s the most important point. Goodrich’s is closing no matter what happens.”

McGraw wants to put up a mixed-use development, with student housing, offices and retail, but he said that’s not the cause of Goodrich’s potential demise.

McGraw said Goodrich’s “sweetheart” lease, signed 25 years ago, set the rent at 600 percent less than market value and is “unsustainable” for the property owners, the dry-cleaning Baryames family.

Steve Scheffel, one of four owners of Shop-Rite, admitted that the lease was favorable, mainly because Goodrich’s had recently borrowed $1 million to put into renovations, but 600 percent is “inaccurate.”

He expected the 2014 renewal to be more expensive, but said McGraw’s proposal amounted to an “eviction notice.”

Scheffel declined to say what Shop-Rite pays in rent.

“We can’t match those terms,” Scheffel said. “Not only does the lease go up dramatically, but we’d have to close the store for six to eight months, strip it to the walls, lay off the entire staff and put $1 million to $2 million worth of improvements into the place, per the new developers’ specifications.”

McGraw admitted that the Goodrich’s Shop-Rite building is “structurally OK.”

McGraw said the new grocery also wanted residential customers on site.

“Not only are we not evicting Goodrich’s, like everybody is saying, but we’re willing to invest millions of dollars to attract a grocer that is sustainable,” McGraw said, referring in part to the housing component.

Developer Gene Townsend served for a few months on the East Lansing Planning Department advisory committee that took a preliminary look at McGraw’s project.

Townsend said there’s good reason to upgrade “underutilized” Goodrich Plaza, especially after the recently completed Trowbridge Road extension and gateway to MSU and a new $10.5 million Amtrak transportation center set to go in across Trowbridge Road in 2015.

But Townsend added that Goodrich’s is “almost like a public service,” with its specialty groceries for international students and passionate following in the neighborhood and wider area.

“Without seeing [McGraw’s] budget, you can’t fairly say he has the opportunity to offer Goodrich’s a lower rent than other people,” Townsend said. The project is being negotiated under a confidentiality agreement. “He certainly could earn good will with public funding sources if he did announce that.”

Townsend said it’s unlikely McGraw will be able to finish the project without public funds. If McGraw seeks public funds, Townsend said the city of East Lansing should scrutinize the project budget carefully.

Goodrich’s was almost pushed out of business once before, when I-496 gouged its way through the middle of Lansing in 1966. Nearly five decades later, Scheffel didn’t rule out moving again, but at 66, the prospect made him look more worldweary than usual.

“Anything’s an option,” he said. “Closing the doors and clipping coupons on the beach is an option.”

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