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Positive Effects on the Downtown <br />The SBCC and SBDC believe the highest and best use of the former Osco building will be to <br />blend the odd and new into a major downtown and regional amenity. The key to this project and <br />its positive ripple effects will be the positive architectural changes made, the creative reuse of <br />both front and back of the building, the correct tenant mix, creative parking options and <br />continued downtown improvements by DTSB and the City. <br />Obstacles to the Project <br />There are several areas of concern surrounding this development. One, risk. The downtown _ <br />retail market is better than in the past but is still very risky. This block particularly only has <br />- three retailers on it. Two, high costs of development, acquisition, tax uncertainty, etc. Three, - <br />retail rent rates in downtown are at $10.50 or less and city effectively sets base retail rates. Four, <br />project is only partially tenant driven. This is a tenant driven market. Five, complexity and . <br />- ~ expense of urban developments. Six, parking problems. Seven, chance of real returns lies iri <br />success of ripple effect. Can downtown South Bend ever become the hot place to be? Or a hot <br />retail/office/ commercial market? Eight, overall costs of project. <br />Incentives to the Project <br />There are several potential incentives. One, Chocolate Cafe and restaurant appear to need more <br />space. Two, positive public relations boost for South Bend Chocolate. The company appears to <br />be selling South Bend as much as its chocolate products. Three, past success rate of SBCC and <br />SBDC. Four, the city may have a plan for the block which would provide additional incentives <br />and help. Five, DTSB has facade grants, many which may be available. Six, DTSB and City <br />(despite setbacks) appear to be making headway into the complex issues surrounding downtown <br />South Bend and its future. <br />Recommendations <br />We advise to open up discussion with Redevelopment about the Michigan Street Shoppes <br />project. Areas of concern and focus by SBCC and SBDC should be cost/benefit analysis, risk <br />factors, and instability of downtown market in general. Though both companies have experience <br />in this market, nothing should be taken as given. Also note that the SBCC and SBDC's current <br />developments are tenant driven and more stable office/retail markets that would be entered into. <br />FiI~J Ift ~~.°`~.'K (~~Ice <br />iJl HY ~ _ r.r .^ <br />JCc{iJ ~/OOROE <br />