Downtown Residential Population

Earlier this month developer David Matthews was given approval by the South Bend Common Council to build a 6-story apartment/condo building in the East Bank Village of downtown South Bend.  The issue before the council was to give variance to allow Matthews to exceed the 5-story building limit for that area.  At 6-stories, the East Race Flats will be the tallest structure in the village and will attract attention at the corner of Niles Ave and Jefferson Blvd.

Regardless of the height of the building, the development will bring more residents and activity to the area.  The development is planned to have 42 residential units, 9,000sf of office space and 8,000sf of restaurant space.  Rents for the apartments will start at $800, a number which is significantly below some of the recent multifamily developments in Granger and near Notre Dame (SB Tribune July 15, 2014).  Matthews has recently finished 2 other condominium units in the village, the River Race Townhomes (10 units) and the East Bank Townhomes (6 units).

There were many mixed reactions to the development proposal, mostly centered on the height of the building and fears it would change the feel of the small river side village of downtown South Bend.  Some questioned the economic feasibility of the project and the ability to secure tenants.  In its modern history, downtown South Bend has struggled to see and maintain its commercial growth.  The downtown office market has about 2 million square feet and is consistently hovering around 80% occupancy.  There have been a couple redevelopment projects in recent years, turning class B space into class A space, though overall market rents have remained stagnant at $14-19 per sq ft for the past 10 years+.  The restaurant and entertainment district of South Bend has also struggled to maintain velocity.  New restaurants like Café Navarre, Starbucks, Ciao’s, Studabakers and The Exchange have all opened in the past few years but we have also seen the demise of The Vine and Trio’s Jazz Club.

What is it that South Bend needs to gain some momentum to its downtown?  Corporate offices are often mentioned as what is needed for downtown.  While more office dwellers would be great, what really will that do to add life to the CBD?  History and studies have shown that increasing workers in urban areas will cause an increase in sandwich and coffee shops, but these office dwellers typically scurry away to their homes after 5pm.  South Bend does have its coffee and sandwich shops and a couple of good watering holes for after work.  Lunch traffic at the local café’s is busy as there are an estimated 20,000 workers in the CBD.  Night time, when restaurants increase their profitability with higher check averages and alcohol sales, is a different story.  With a multitude of dining choices along the main street corridor of north Mishawaka, many suburban dwellers save the 15 minute drive downtown and frequent the restaurants and bars closer to home.

For a vibrant and sustainable urban environment, downtowns need residents first and foremost.  Residents spend the majority of their time downtown, most importantly evenings and weekends when the daytime population has left.  Some urban economists suggest that a downtown needs 10% of its population living in the area.  South Bend currently has an estimated 9,000 people living in its downtown area, about 5% of its twin city population.  As we are still very much a commuter market, South Bend could succeed with a smaller percentage.  New residential developments like those of Matthews will definitely add to the population density little by little and incrementally increase the average household income.  These factors are what drive new business creation.  Most vibrant downtowns need various bars and restaurants, transportation, parks, a grocery store, a department store and a hardware store.  South Bend has a few of these, though the Bamber’s grocery and the hardware store are just out of the CBD and the department stores are further out.  Successful downtown grocers find ways to increase sales by attracting the local employees with lunch options but also require parking and visibility.  Downtown parks need to bring children and families and give the residents in multifamily housing a place for recreation.  This is where South Bend falls a bit short.  Howard Park is scenic and a great place to walk, run or bike, but where do families take their children.

Matthews’ East Race Flats

Many downtowns have built splash pads to attract children during the summer months.  The parking lot at the former College Football Hall of Fame would provide an excellent location for a splash pad as it is adjacent to South Bend Chocolate Café and the Healthworks Children’s Museum.  Another option is the fountain in front of the Morris Performing Arts.  As the city makes improvements to the walkability of downtown with 2-way street design, the timing is right to invest in a splash pad.  As South Bend attempts to improve its downtown, it must compete with the midtown neighborhoods like the Eddy Street Commons area and with the suburbs to the northeast.  South Bend must focus on what makes it different, improve upon it, and take advantage of the millennial generation and their desire for an urban live/work lifestyle.  Add the residents and the restaurants, bars and markets will come and succeed.

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Cupcake Bubble??

The South Bend/Mishawaka market received its first gourmet specialty cupcake shop in late 2013 with Gigi’s cupcakes on Cleveland Rd. Mid 2014 saw the opening of Yummy Cupcakes in downtown South Bend. These local store openings are following a gourmet cupcake craze that started in early 2000.
The Cupcake craze is said to have began in 2000 when in an episode of Sex in the City, characters ate a cupcake from Magnolia’s Bakery’s West Village location. Fan’s and tourist began to flock to the bakery and the craze was born. One of the first to capitalize on the cupcake craze was Crumbs Bake Shop, which opened in 2003 on the upper west side of Manhattan. Crumbs made and sold a variety of pastries, but created the Crumbs Signature size cupcakes. Customers lined up for the $4.50 cupcakes and the bakery sold out daily. Crumbs began an aggressive expansion and had opened hundreds of stores by 2011 and went public in June of 2011.
Other small shops and franchises began to open up. The Yummy Cupcake business started in 2003, opening its first store in 2004 in Burbank California. A relatively small organization, Yummy has 4 California Locations, one in Istanbul, Turkey, recently Bloomfield, MI and now South Bend, IN (interesting location list). Gigi’s Cupcakes began by another entrepreneur in Nashville TN and has expanded to 84 stores in 23 states.
Numerous other cupcake stores cropped up in the past decade and many analysts warned of a cupcake bubble. Sure enough in 2011 after going public, Crumbs sales began to decline. By 2013, Crumbs reported $15.3 million in losses and started closing stores. Even at $4.50 a cupcake, Crumbs would need to sell millions of additional cupcakes just to break even. The rapid expansion by the company and the increased competition are cited as reasons for the business struggles. Crumbs plans to continue to close stores and diversify its menu in order to become profitable, but meanwhile original owners have moved on to start other business ventures.
The idea of consuming a large or gourmet cupcakes is a unique and fun thought. I am more than willing to indulge in such an activity, but how frequently?? Certainly not daily, not weekly and unlikely monthly. When Starbucks first brought the gourmet coffee shop and the $4 coffee to the United States, many said Americans would not spend that amount of money on a coffee that was previously under a dollar. Now Starbucks and the like are a culture and one of the more ubiquitous icons in the country. Neither Gigi’s or Yummy’s websites list the calories or fat content of their confections, and probably with good reason. Even with the gluten free, sugar free and vegan cupcake options how many cupcakes can one expect to eat in a year. For the health of an already obese country, let’s hope there is not a cupcake culture brewing. I love the idea of ordering cupcakes for birthdays and special occasions. No cutting and serving necessary, just set out the box and let guests make their choices. So has the cupcake bubble already burst? It appears it has but the hope is with limited shops in our Michiana market, the uniqueness and profitability of our local stores will remain and these businesses will remain.

Business Insider, June 5, 2014
Gigiscupcakesusa.com
Yummycupcakes.com