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Special section: Canadian trade
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PAGE 23 ~ Testers
shake, bake, freeze products PAGE 26
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Developer's Royal Oak projects total $27 million PAGE 4
WEEK OF DEC. 16 - 22,1985 VOLUME 1 0 NO. 46
Retail chain may shrink to one store
Ann Arbor office space shows signs of doubling BY MARY SOLOMON SMYKA CRAIN'S DETROIT BUSINESS
Between last April and the end of 1986, prime multitenant office space in Ann Arbor will have nearly doubled - from an early 1985 total of 1.5 million square feet to about 2.8 million square feet. Developers are betting that companies will be moving into Ann Arbor to help fill the new buildings. And a heating up of demand in 1985 indicates that their bets may payoff. The 1.3 million feet include 1.1 million square feet of new office space and 200,000 square feet of rehabilitated office space, said Ann Arbor commercial real estate broker John Swisher III. The new projects come while some recent projects remain wholly or partially unoccupied. Still vacant is 555 Briarwood Circle, an 81,000-square-foot office building completed in July at State Road and Eisenhower Parkway. A tentative agreement with a major tenant was reached last week. And the Atrium, a 60,000square-foot complex at 1-94 and State Road, completed almost a year ago, is about half leased. Swisher, president of Swisher Realty Co. in Ann Arbor, said the market will not absorb the doubling of Ann Arbor's office space without an infusion of out-oftowners.
BY KATHY JACKSON CRAIN'S DETROIT BUSINESS
GLENN TRIEST
Daniel Dolsen, marketing director for Turner Development Co.'s 555 Briarwood Circle project in Ann Arbor, says leasing activity has accelerated dramatically during the past six weeks. That would be a departure from recent history, during which new space has been occupied chiefly because of the growth of local companies, Swisher said. He said he sees signs that out-oftowners are moving into Ann Arbor office space.
"I'm more optimistic about the situation today than I was six months ago, when we were seeing a lot of space built but not getting a lot of pressure to lease it," Swisher said. "Usually, the market has died See OFFICE, PAGE 30 ~
Party store glut irks Council
The granddaddy of appliance store chains in Detroit may be down to a single downtown store by midwinter. Good Housekeeping Shops is hanging on by a thread in its business of selling refrigerators, stoves, washers and televisions on credit to poor, inner-city residents. Company management concedes it failed to change with the times. Born in 1919, the Detroit-based Good Housekeeping chain boasted 25 stores and nearly 500 employees as recently as 1980, when the company was at its peak. Today, it has just three stores and fewer than 100 employees. And two of those stores probably will close this winter. "We are so far gone that we have to call up the distributors" to remind them that the chain exists, said A.H. Tuscani, the company's 70-year-old president. Tuscani said the stores on East Eight Mile Road in Detroit and on Joseph Campau in Hamtramck probably would be closed when the company's fiscal year ends in February. That would leave Good Housekeeping with a lone outlet at 1250 Library St., in an almost deserted
area of downtown Detroit behind the old J.L. Hudson department store building. "Right now, we're in the deadest part of the whole town," Tuscani admitted. Tuscani said 60 percent of the chain's sales come from the downtown store. If the company is to collect the approximately $3 million it is owed in receivables, it must keep at least one store open, he said. Since most of the customers are unemployed, it would be very difficult to collect from them in court if the company were to go out of business, Tuscani said. "If you have receivables, you can't just walk away from them," Tuscani said. He declined to divulge sales figures. Good Housekeeping's troubles began in the early 1980s when interest rates shot up to 20 percent. About 85 percent of the company's customers buy on credit, and Good Housekeeping does all of its own financing. The company borrows money from banks, and then gives credit to its customers at the going interest rate. Currently, its customers pay 12 percent on unpaid balances. The high interest rates in the early 1980s made money both more See CHAIN, PAGE 30
Gray days bring cheer to some businesses
BY AMY BODWIN
BY KATIE LANE-WILKE
CRAIN'S DETROIT BUSINESS
CRAIN'S DETROIT BUSINESS
The Trade Winds party store on Livernois Avenue enjoys an advantage that a lot of Detroit party stores don't. One of the largest party stores on Detroit's north side, the Trade Winds is a half-mile from its closest competitor. To the west on Seven Mile Road, four party stores are cl ustered together, their brightly-colored signs proclaiming "beer and wine," "liquor" and "party store" just a
Those thick, gray clouds that have blocked out the sun for the past month have a silver lining for some Detroitarea businesses. It's true. While the weatherman is looking for a bodyguard, certain businesses are basking in the sales rolling in with the clouds. Travel agents and the owners of pizza and doughnut shops don't seem to mind that, in the first half of December, the sun has shone for a total of only 3 1/2 hours, or 3 percent of the daylight
JOHN SOBCZAK
Party store owner Joe Sarafa says the market is overcrowded. part-owner of Trade Winds at few storefronts apart. "In the last five years, in 17521 Livernois. "When a new this one-mile stretch, maybe a one opens, it hurts others." half a dozen party stores have See PARTY, PAGE 29 ~ come in," said Frank Kory,
hours. Last December, the sun was out about a third of the time, roughly normal for December. And November tied the 1972 record for the grayest November on record. "Whenever I wake up and it's a lousy day, I say 'Oh, what a beautiful morning,' " said Al Porada, who owns three doughnut shops in Dearborn. "When everything else looks dismal outside, people come in out of the misery for coffee and doughnuts." A former Dearborn policeman and 20year veteran of the doughnut business, Porada owns The Donut Mill and Mister See GRAY, PAGE 30
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