BATTLE CREEK — Over the last year, the Cereal City has experienced its share of bad headlines.
Despite the exodus of chain retailers like Macy’s, MC Sports and Wendy’s — as well as layoffs at legacy food processing companies like Kellogg Co., Post Holdings Inc. and TreeHouse Foods Inc. — some developers believe they’ve found a diamond in the rough in Battle Creek.
One of those stakeholders is 180Urban Development and Management LLC, which has acquired four properties in the downtown area for mixed-use projects. The Battle Creek-based developer plans to renovate two of the abandoned buildings and demolish the others that are beyond repair, said President and COO David Sciacca.
“Our plan is to do a comprehensive redevelopment that will be mixed-use with residential and commercial space focused on breweries, restaurant, a market with a real butcher, bakery and deli,” Sciacca said. “It needs to be an experience to come down here because that’s what will attract people to come downtown. It starts with food, beverages and social interaction and then you can go after the retail.
“We’re not looking for chains. We’re looking for more unique and regional offerings.”
That’s a strategy embraced by Joe Sobieralski, the president and CEO of Battle Creek Unlimited, the local economic development agency.
“These are national chains and they have to evaluate which stores they’re going to close,” Sobieralski said of the recent retail closures. “There’s really nothing we can do about that.”
Normally, a streak of bad news would pose its share of complications in selling the region to prospective companies. But in the present tight labor market, companies and site selectors pay attention to areas that have layoffs and company closures, said Jill Bland, managing partner at Southwest Michigan First, a regional economic development organization based in Kalamazoo.
Bland was meeting with site selectors at a conference in January on the day after Kellogg announced it was laying off 250 people, mostly at its headquarters in Battle Creek.
“They were very interested to learn what were the skill sets of the people,” Bland said. “We spent a lot of time talking about that. If you have a company with a downsizing, it’s an opportunity for you as a community because you’ve got talent, which others don’t.”
For Sobieralski at BCU, that means the troubles at Kellogg, Post and TreeHouse could open other opportunities in the “volatile” food processing industry.
“If you’re a food processing company and you’re seeing layoffs in a tight labor market, you might see Battle Creek as an attractive place to open a business,” he said.
According to City Manager Rebecca Fleury, the same may hold true for retail announcements.
Fleury’s office had an influx of local and national retailers interested in exploring opportunities to enter the Battle Creek market immediately after the retail closures were announced, too.
“A lot of older, urban core communities struggle with negative perceptions,” Fleury said. “It’s so much easier to carry on negative perceptions. But we’re committed to success even though we had some tough announcements in 2016.”
SEEKING CRITICAL MASS
Battle Creek’s corporate struggles aside, community stakeholders continue to wrestle with whether it makes sense to develop a critical mass of downtown residents and then go after retail or take the opposite approach. Sciacca at 180Urban said he’s convinced that working both angles simultaneously will pay off.
No single development on its own will be enough to change the city’s business climate, but Sciacca said he’s optimistic that the synergistic approach now being taken will have a major positive impact for his company, which he runs with CEO Alexa Smolinski, his wife who also works as a scientist at Kellogg.
“Alexa and I really agreed that we need to take on these properties and do a comprehensive redevelopment of downtown,” he said. “We wanted to see change happen quickly.”
BCU’s Sobieralski agrees that a key element in breathing life back into the downtown district is making it a destination that people want to live in and frequent. He said it’s no secret that when businesses in Fort Custer Industrial Park or other large corporations bring in job candidates, they often steer them to surrounding communities like Mattawan, Portage or Richland.
“We definitely import more workers into Battle Creek than we export,” he said. “If we were able to capture the revenue and disposable income they would generate as residents, it would be a real boost to the local economy and the city’s reputation as a good place to live and work.”
John Hart, Battle Creek’s downtown development director, said he receives frequent calls from millennials seeking an urban living experience. These individuals work at places such as the Federal Center, the hospitals or at Kellogg. Other calls come from empty-nesters or retired people who have a permanent residence in Florida, but want to maintain a presence in Battle Creek.
As evidence of the need for urban housing, Hart points to the persistent waiting list for one of the 23 units at the Battle Creek Towers. The list currently stands at 17 people, he said.
“If 100 new units were built each year for five years in the city’s downtown, they would be fully occupied,” Hart said.
ANTICIPATING DEMAND
That level of interest in downtown living could portend future demand for 180Urban’s projects.
The developer plans to begin construction this spring on the building at 15 Carlyle Street, which will house 20 market-rate loft apartments. Next up is the 64 West Michigan Ave. property, where Sciacca plans to have a restaurant and brewery on the first floor with lofts on the second floor.
Both projects are expected to cost about $3 million each.
Additionally, city officials hope to see work start soon on the Heritage Tower project that Grand Rapids-based 616 Lofts LLC acquired in 2013. The company wants to add as many as 87 market-rate apartments, a hotel and other commercial space, as well as underground parking, according to a city document.
“This is a deal that’s been playing out for almost three years,” Fleury said. “The building is so large and there are issues that have come along with that. It’s not only the condition of the building, it’s also the legal entanglements. Now we’re getting to the meat of the project. I’m hoping that by fall there’s a crane down there.”
However, work won’t commence until 616 secures financing and tax credits to finalize construction plans for the 85-year-old art deco building, which has been an iconic part of the downtown landscape.
The project is expected to cost 616 Lofts about $29 million, including the acquisition of the property, the resolution of three lawsuits tied to the building’s previous ownership group and site improvements. The interior of the building also contains asbestos and mold that will need to be removed, its mechanical and electrical systems will have to be replaced and the roof needs repairs.
“When you’re dealing with an older, urban core, it takes time,” Fleury said.
In January, the Battle Creek City Commission approved a $570,000 loan to assist the company with cleanup efforts at the 19-story Heritage Tower at 25 West Michigan Ave.
Development efforts also are focused on the McCamly Plaza Hotel, which will become a Hilton hotel property. An atrium area at McCamly Place, which houses the hotel, will include retail and commercial space.
The developments are taking shape at a time when groups in Battle Creek are trying to figure out how to help improve the local business climate for the city’s companies and its 52,000 residents, said Sobieralski at BCU.
“We have a lot of work to do,” he said. “One organization can’t solve the issues we’re dealing with on its own. It’s going to take collaboration between all stakeholders in this community.”
