Petoskey’s Local Businesses Fight Massive Retail Development

Date: 1 Mar 2001 | posted in: Retail | 0 Facebooktwitterredditmail

Located on Lake Michigan, the small town of Petoskey in northern Michigan draws thousands of visitors every year. They come for the spectacular scenery and for an opportunity to experience what many communities have long since lost: a vibrant downtown.

Renowned for its distinctive character and century-old buildings, downtown Petoskey is more than a quaint destination for tourists. Its a place that serves the everyday needs of residents. There’s a grocery store, hardware dealer, bookshop, florist, and pharmacy. All are locally owned.

A major big box retail development under consideration in a neighboring township, however, has threatened downtown Petoskey’s future. “I fear that this may be the end of the downtown as we know it. We will have more seasonal businesses, and lose Penney’s in the downtown, the hardware store will be stretched, and so will this bookstore,” contends Julie Norcross, owner of McLean & Eakin Booksellers.

Norcross has joined other downtown merchants and residents in an effort to block the 400,000 square foot retail development in nearby Bear Creek Township. The development is slated for 90 acres currently zoned residential and farm-forest. It would include several big boxes, as well as smaller-scale chain stores. Combined, these stores would be larger than the entire downtown. The city and surrounding county are home just 25,000 residents.

An economic impact analysis supplied by the developer contends that the region can support an additional 500,000 square feet of retail space with little or no impact on existing retailers. The developer argues that the new center will serve as a regional shopping destination, attracting shoppers from a wide area and therefore having only a marginal impact on the downtown.

Studies in Iowa and elsewhere, however, indicate that the ability of new superstores to draw regional shoppers is short-lived at best. In tracking Wal-Mart’s impact on Iowa towns, Dr. Kenneth Stone has found that the host community’s overall retail sales do increase initially as a result of attracting shoppers from a larger area.

After a few years, however, sales level off and then begin to decline. One in four of the host towns actually ended up with a smaller retail sales base than they had prior to Wal-Mart’s arrival. In the end, most of Wal-Mart’s sales came, not from regional shoppers, but directly at the expense of existing local retailers, many of which were forced to close.

What may prove to be even more of an economic concern, according to Norcross, is the impact the development will have on tourism. “Why would people travel to see the same place that they have in their own backyard?” she asks.

That’s one of several major issues raised by Gourdie, Fraser & Associates, which was asked by Bear Creek Township to review the developer’s economic analysis. “Changing the retail focus from unique specialty retailers. . . in traditional, walkable shopping areas to national chains in power centers. . . may contribute to eroding the qualities that attract tourism dollars in the first place,” the review notes.

The retail development conflicts with the goals outlined in the comprehensive plans of all three affected communities—Petoskey, Bear Creek, and adjacent Resort Township—as well as the county’s master plan. All discuss the need to control growth and protect the area’s rural nature.

The debate over the development has revealed a strong need for regional cooperation on development issues. Although the impact of the retail complex will be felt in three communities, the region has no mechanism for joint review of large-scale developments. Instead the decision rests entirely with the Bear Creek Township Board, which must re-zone the land before the developer can proceed.

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Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and designs policy to counter concentrated corporate power and strengthen local economies.