Feb 11, 2009

Detroit retail fund createdBy Louis AguilarDetNews.com

With the economic downturn killing downtown Detroit retailers at a brutal pace, a $5 million loan program is being launched to create more storefront businesses from the New Center area to the Eastern Market to Corktown.

The Detroit Urban Retail Loan Fund was announced Monday by the private Detroit Investment Fund and the state’s Michigan Economic Development Corp. Each entity will contribute more than $2 million, organizers said. The loans, carrying interest rates from 4 percent to 9 percent, will go toward establishing new small and mid-sized retail storefronts in the Midtown, Eastern Market, Corktown, downtown and riverfront neighborhoods.

Loans will range from $50,000 to $500,000, with the “sweet spot” of loans in the $150,000 to $300,000 range, said David Blaszkiewicz president of the investment fund, which will oversee the program.

“We’re looking at 20 to 30 investments over the next three to five years,” Blaszkiewicz said. “We’re looking at viable business plans, start-up facilities and businesses looking to open up a new location or expand.”

Attracting retail has been a decades-long challenge, even when the city’s core was rebounding and attracting new residents in the past few years. The severe downturn threatens the progress.

On Monday, the gourmet grocer Zaccaro’s Market in Midtown announced it was closing because it was overwhelmed by debt. The store opened in April. In Corktown, the Mercury Coffee Bar, the stylish café in Corktown, also abruptly closed its doors — though owners plan to re-open Friday after some re-tooling and management changes.

Last week, two other upscale businesses went under — Sweet Georgia Browns restaurant in Greektown and the Woodward near Campus Martius. Last month, Borders Group Inc. announced it was closing its Campus Martius bookstore.

“Imagine if we didn’t step in and help?” Blaszkiewicz said. “We need to improve the chance of success and provide services to the communities and spark more opportunities.”

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