Grand Rapids has been invaded by something from Outer Space , but there's no need to be alarmed.
It comes in peace and has a lot of knowledge to share -- for free -- with humans who want to launch a store, restaurant or other commercial venture in metro Grand Rapids.
Anyone who has access to the Internet can now call up data in the newly launched Outer Space website on 11 commercial districts surrounding the core city that gives targeted demographics that a business person normally would pay for in a marketing study.
The website breaks down information by specific neighbhorhoods on area residents such as number of households, population density, median income, age bracket, and education.
Making Informed Decisions
Outer Space aims to give reliable market data to entrepreneurs so they can make informed decisions on whether neighborhood commercial districts such as East Hills, Midtown, Stockbridge and Madison Heights can support a restaurant, computer repair center, speciality store or other consumer-oriented business, says Tom Pfister, program manager for Local Initiative Support Corporation (LISC) Grand Rapids.
Founded in 1979 by the Ford Foundation, New York City-based LISC leverages corporate, government and philathropanic funds to help community residents transform distressed areas into vibrant neighborhoods. Three years ago, LISC establishes a new commercial markets advisory service to spur neighborhood retail and commercial activity. LISC has served more than 2,800 community development corporations (CDCs) nationwide.
LISC named its Grand Rapids website "Outer Space" because it emphasizes commercial districts outside of the downtown area, Pfister says, with the goal to revitalize neighborhoods by strengthening the vitality of their shopping districts.
This summer LISC worked with consultants based in Chicago and New York, researchers at Grand Valley State University and a local task force to develop the Outer Space database that was launched last week.
LISC hopes the data will also prove useful for property management and development companies, nonprofit organizations, government officials, private foundations, and construction contractors.
A Look at Market F
For instance, take the Market F district, bounded by Logan, Plymouth, Alger and Division streets. The area encompasses the neighborhoods of Madison Square, Southtown, South East, Garfield Park, Wealthy-Jefferson, Alger Heights, Seymour Square, Boston Square, Franklin/Eastern. Market F contains more than 13,400 households with a population density of 6,753 residents per square mile. Median income in this market is $51,500, and 30 percent of the population is between 23 and 44 years of age.
Reseachers say that Market F has about $41.8 million in concentrated buying power, measured in after-tax dollars per square mile.
"For anyone who says the area cannot support additional retail, the data clearly states otherwise," says Dave de Velder, director of real estate development and management for Inner City Christian Federation (ICCF). De Velder was one of the 18 volunteers who participated in the Neighborhood Commercial Profiles Task Force that provided local context to the study.
ICCF, known for its role in providing housing counseling services for low income residents in Grand Rapids, will use the data to learn about resident trends and demographics. "This data breaks down stereotypes about these areas and can open up new investment opportunities for neighborhood business districts, de Velder says. "It's very exciting to see."
What Neighborhoods Need
Outer Space or LISC doesn't give recommendations on whether a neighborhood can support the opening of a flower shop or dry cleaning store, says Jake Cowan, business manager for LISC MetroEdge of Chicago and facilitator for the study.
But LISC is providing quantitative data compiled by the nationally recognized firm Nielsen Claritas and other sources to allow an entrepreneur to make better decisions as to what a neighborhood may need.
For Market F, the Community Research Institute of Grand Valley State University developed data on average home prices of the area and the volume and value of commercial and residential building permits. Other information includes the number of parks, retail opportunities, accessibility of walkways, upkeep of streetscapes and average daily traffic counts for major intersections. "Combined, the data begins to paint a revealing picture of the economic strength of this business district," Cowan says.
"Neighborhoods that are underserved with retail services actually have a lot of spending power," Cowan says. A neighborhood's buying power isn't solely tied to median income, but also income density. A densely populated, mixed income neighborhood will have a high concentration of resources available for purchasing goods and services from area shops, Cowan says.
Lawns Don't Shop
"Why does concentrated buying power matter? Lawns don't shop, people do," says consultant Larisa Ortiz Pu-Folkes in her workshop materials on local commercial districts and how to apply the Outer Space data. She gave a presentation to the Grand Rapids group in August, and her 75-page PowerPoint presentation is provided on the website as a primer on using the data.
A principal in her Jackson Heights, N.Y.-based firm , Ortiz Pu-Folkes says the Outer Space data helps to answer some basic questions: What is the district's identity? Who shops in the district and where do they live? What might they need and want? What might the district support?
To help make those distinctions, Ortiz Pu-Folkes sets up three major categories for consumer-oriented businesses: convenience, specialty or destination. A local drugstore, beauty salon or dry cleaner can be defined as a convenience business, taking the consumer perhaps 5 to 10 minutes in travel time. A specialty business could be a women's boutique or restaurant with more exotic fare. A destination business could be a big-box home improvement center, high-end department store or entertainment district in a city.
She encourages entrepreneurs to use the Outer Space data as a easy-to-obtain starting point, but then conduct boots-on-the-ground work that may include consumer surveys or a roundtable and a visual survey of what businesses are doing well in an area. Other reconnaissance can include shopping a competitive commerical district.
Ortiz Pu-Folkes says that a retail operation conducting business strictly on the Internet can can improve its chance of success by offering a bricks-and-mortar location and a catalogue presence.
"Consider this...the average shopper who buys from a retailer whose goods are only available on-line will spend $157 annually," she writes in her blog. "But if that same retailer also has a bricks-and-mortar location, annual spending by that same shopper jumps to $485. This is good news for our commercial districts - they will continue to be relavent as these consumer buying shifts take place."
Tom Mulligan is a freelance writer in Grand Rapids, and a board of the Grand Rapids Community Media Center. He can be reached at
[email protected]. Matthew Gryczan is the managing editor of Rapid Growth.