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Posted on Sun, Jul 15, 2012 : 5:59 a.m.

Borders closure leaves mark on downtown retail environment one year after bankruptcy

By Lizzy Alfs


It's been one year since bookstore chain Borders announced its plans to liquidate. The flagship store in downtown Ann Arbor closed Sept. 12, 2011.

Melanie Maxwell |

Rocky Mountain Chocolate Factory owner Angela Eddins uses one word to describe business at her East Liberty Street store on Christmas Eve nights: insane.

Customers stroll inside in droves, forming “nonstop lines” to buy candy, drinks and other gifts.

But Eddins said something about 2011 was different — very different.

“It used to be insane because people would always go to Borders (bookstore) and then come over to us,” she said. “Everyone would come to our store with a Borders bag in hand. This year, with Borders not being there, it was much less crowded.”

The Ann Arbor-based bookstore announced its plans to liquidate on July 18, 2011. When the news broke — almost one year ago — Ann Arbor lamented the impending closure of the bookstores.

By the time the company shuttered its 399 remaining stores — including the 40,000-square-foot flagship store on East Liberty Street that closed on Sept. 12 — it meant 10,700 jobs lost in the U.S., including 400 in Ann Arbor.

Some people argue the loss of the downtown store, which was a staple in Ann Arbor since it first opened at 211 S. State St. in 1971, fed into a decline of East Liberty Street over the past year.

Yet as the anniversary of the bankruptcy approaches, there also are signs that the building once occupied by Borders merchandise and staff downtown soon will revive the corridor.

In the past year, many retailers neighboring the former flagship Borders closed their doors and panhandling issues were thrust into the spotlight as people took up residence outside the large vacant storefront.

Eddins said foot traffic on East Liberty has decreased significantly since Borders closed, resulting in declining sales and fewer customers in her store.

“There have been times I walked out of my store (in the last year) and I thought, ‘What town am I in?’ Eddins said. “I’ll never forget one night there were hardly any cars and (panhandlers) were outside Borders’ entrance. It was like a ghost town…it gave me chills.”


A panhandler, pictured in 2011 on East Liberty Street.

Melanie Maxwell |

In the past year, many East Liberty Street businesses neighboring the former Borders store have been a revolving door. Among the changes:

  • Poshh clothing boutique closed after 10 years; This & That candy store closed; Allure boutique closed; and the owner of La Pita Fresh sold his business due to disappointing sales.

  • Farther down East Liberty Street, Organic Bliss and Sole Sisters both closed.

Susan Pollay, executive director of Ann Arbor’s Downtown Development Authority, said losing Borders was “so sad it was like losing a family member.”

She said the closure had a "huge impact" on the downtown area — from bringing fewer people to the neighborhood to the loss of a popular community gathering spot.

“Thousands more people were on our sidewalks when Borders was open,” she said. “It also brought a greater diversity of foot traffic: young and old, campus related and not, townies and visitors.”

She added: “It was an anchor for the neighborhood in that it had book readings and book signings and events of all kinds. Its concerts were absolutely beloved.”

Abraham Hejazi, owner of the former Allure boutique at 615 E. Liberty St., estimated he lost 20 customers a day when Borders closed across the street from his store.

The decrease in sales was too much for him to keep operating Allure, and he shuttered his doors in April.

“I used to have so many customers in the morning, especially moms and kids who had just gone to Borders,” he told in February. “We don’t have this anymore.”

Andrea Graef, owner of former This & That candy store, and Wendy Batiste-Johnson, owner of former Poshh boutique, both cited similar concerns before closing their stores in 2011.

To be sure, retailers don’t point to Borders’ closure as the sole issue facing East Liberty Street: people have also mentioned the economy, rental rates, landlord issues, panhandling and parking.

“I don’t think we can say it’s all Borders,” Eddins said, “but it definitely has a big impact, guaranteed.”

Jim Chaconas, a local commercial real estate broker and longtime Ann Arborite, said when the flagship store closed, it hit already struggling retailers the hardest.

“People went to Borders a lot, but we didn’t see the same devastating effect as when Jacobson’s closed,” he said. “Grand Traverse Pie Co. is performing well, 7-Eleven is breaking records, Sava’s restaurant is cranking.”

Leif Elias, owner of the 26-year-old Orchid Lane clothing store at 419 E. Liberty St., said she hasn't noticed a big impact on sales at her store since Borders closed, but said the panhandlers have become more of a problem downtown.

"We have been in Ann Arbor since 1986 so we kind of have our own pull of customers," she said. "We are also a block down (from the former Borders) and at a crosswalk by the parking structure."

Other business owners saw opportunity on East Liberty Street, even after Borders closed.

Said Namari and Fayez Khalil took over La Pita Fresh at 529 E. Liberty St. in April, despite the previous owner’s concerns about sales decreases and loss in foot traffic.


The new owners of La Pita Fresh saw an opportunity when the East Liberty Street restaurant planned to close.

Melanie Maxwell |

“Even though Borders closed, (Namari) saw a good prospect here,” Khalil said. “Of course, we always look forward to having Borders — or any other vacant building — fill up, but we’ve held our own in the slow months.”

Chaconas said retail changes in Ann Arbor are cyclical: “Jacobson’s closed. Borders closed. More stores will close. That’s how I look at it: How many more years do we really have for bookstores? Five? 10?”

The real question, he said: "How do we keep what's here and get it growing again?"

And although Borders’ closure was felt by neighboring retailers — and resulted in 400 jobs lost in the Ann Arbor area — it hasn’t taken long for former Borders retail sites to be snatched up by new tenants.

According to real estate brokerage Colliers International, a recent survey of 205 closed Borders stores showed that two-thirds have new leases, although many are at lower rental rates than what Borders paid.

In Washtenaw County, Borders' three retail sites have seen activity:

  • Beauty superstore Ulta and five below, a discount retailer that targets teens and pre-teens, recently leased the former Borders site in Ann Arbor’s Arborland.

  • Big Lots, a retail chain that specializes in closeout and overstock merchandise, leased the location on Lohr Road in Pittsfield Township.

  • Ron Hughes, a southeast Michigan real estate investor, signed a long-term lease for the downtown store — which was entangled in a complicated web of ownership before Malcolm Properties LLC, a family trust managed by John Fingerle of Fingerle Lumber, took sole ownership.

Hughes plans to redevelop the building, although he hasn’t yet revealed the details of his plans.

At the same time, the rear portion of the downtown building, which was once used as Borders headquarters before the company moved to Phoenix Drive, will soon transform into a technology hub when network security firm Barracuda Networks moves its Ann Arbor office there.

The company signed a lease for 45,000 square feet of office space, which is located on Maynard Street partly underneath the public parking garage, and plans to immediately bring 180 employees to the space with plans to hire hundreds more.

Business owners agree: the prospect of having hundreds of permanent employees in the downtown building could be extremely beneficial for the retail environment.

“I think this is very exciting,” Eddins said. “This is 100 percent what our area needs: permanent employees that are down there. We need employees here who will walk out, get the cup of coffee, piece of chocolate or cup of yogurt.”

Paul Krutko, CEO of Ann Arbor SPARK, told last month that the Barracuda deal could act as a catalyst for creating more retail opportunities along East Liberty Street.

“For somebody interested in opening retail, to have a growing workforce here is an attraction," he said.

Pollay of the DDA, who said downtown Ann Arbor is analogous to a forest, agreed: “These are young, technology savvy and smart people that are very much going to be involved in the area.”

She said losing Borders was like losing a Sequoia tree, but a new forest is already taking shape in its place.

“Just like forests, a downtown thrives because of diversity," she said. "Trees are dying and being born at the same time. Downtown, we need the big, we need the national, and we need the local. That is what’s happening here: a regeneration.”

Lizzy Alfs is a business reporter for Reach her at 734-623-2584 or email her at Follow her on Twitter at


Todd X

Mon, Jul 16, 2012 : 11:46 p.m.

"Pull of customers"?


Mon, Jul 16, 2012 : 4:09 p.m.

Sky high rents will not encourage businesses to locate at the State and Liberty area, nor will the city's unwillingness to do anything about panhandling. As long as panhandling is legal, it will deter shoppers and street traffic. Greed and a "PC" attitude toward panhandling are what is ruining the State and Liberty retail area. Main Street as well, with it's constant turnover of high profit enterprises and aggressive panhandling, is going downhill.


Mon, Jul 16, 2012 : 4:05 p.m.

State and Liberty is very different since Borders has been gone, more transients, more panhandlers and more vacancies. Borders brought in a lot of street traffic and nothing like it has moved into that area. State Street has plenty of other vacancies and chains, unfortunately. Regardless of what spin the DDA or the AA real estate cartel put on the retail environment in AA, it's in a downhill spiral.


Mon, Jul 16, 2012 : 2:12 a.m.

The closing of Borders left a big gap, and we have avoided the area except for a few movies or visiting a couple of restaurants. There are solutions though: fill the building with a bookstore, move out the panhandlers (major issue), and put police boots on the ground in the area.


Mon, Jul 16, 2012 : 1:20 a.m.

are we still talking about Borders closing? time to move on....whats next, how do you feel your access to Briarwood mall has changed since Silver's closed in 1993? Do you resent having to use the main entrance now?

Wolf's Bane

Sun, Jul 15, 2012 : 9:53 p.m.

I totally disagree that the closure of one silly bookstore should trigger a commerce earthquake and send people running to the hills! For example, during TOP, Art Fair, and other minor events, the streets are always crowded. Students, having long abandoned traditional books, didn't really spend that much at Border's nor did the public at large (hence its demise). Time to look forward and stop the silly lamenting. Get over it.


Sun, Jul 15, 2012 : 5:21 p.m.

Move Barnes & Noble here plz. We need some space for books, music and coffee in downtown.


Mon, Jul 16, 2012 : 10:03 a.m.

Nope! Too many vagrants and panhandlers.


Sun, Jul 15, 2012 : 11:39 p.m.

Seriously. They can move from the asteroid belt of big-box-land. Nobody would miss them out in car driving Suburbaworld.

Madeleine Borthwick

Sun, Jul 15, 2012 : 8:33 p.m.

YESSSS! excellent suggestion!


Sun, Jul 15, 2012 : 4:50 p.m., do you feel there's no real news to be had from investigating exactly what SPARK does? I keep getting little bits and pieces of how much money they're getting, how they OPINE on things but haven't really shown any solid evidence of some kind of return on investment. As a reporter, I think it would be, at the very least, INTERESTING to approach some of those people with questions about how much money they receive, how it's allocated in the books, and how a profit and/or benefit is the result. Do they have any actual deliverable that shows their Mission being accomplished? Look, maybe there's nothing of great interest, but I mean, you often have stories about things that are much less impactful. Have any of the recent store openings made us of SPARK, or did they open as a result of SPARK assistance? Was SPARK involved in that Barracuda deal? You're always looking for things to report on in terms of economic goings-on; is there nothing reportable about SPARK?


Sun, Jul 15, 2012 : 11:37 p.m.

Number one rule of Fight Club: Don't talk about SPARK in anything but glowing terms..


Sun, Jul 15, 2012 : 3:36 p.m.

Big mistake... Jacobsons is the store that originally occupied that spot, I know because I shopped there. They did not leave the building and move until between 1991 and 1994 (Briarwood says 1994, Jacobsons says 1992). They could not have moved out to Briarwood in 1971 because the mall was not even built until until 1973.. It was a store of true old world elegance like nothing we have remaining today. The store was loved by many Ann Arbor natives who shopped there up until and long after the mall was built. So please do not take 20 years off the life of an elegant institution to tack up a bookstore. These facts are easily found online. I'm a bibliophile so loved Borders, but feel that something very special that began in 19138 was just trivialized to make Borders sound bigger and better.

Wolf's Bane

Sun, Jul 15, 2012 : 9:54 p.m.

19138? You are from the future?


Sun, Jul 15, 2012 : 3:52 p.m.

Error - It should have read 1938. The article seems to be unclear and imply the Borders Flagship was there as the downtown anchor since 1971. Not the two-room shop above the State theater where it all began in 1971. There was an anchor before Borders that older generations are loyal to.


Sun, Jul 15, 2012 : 1:24 p.m.

This is why the City Council and the Mayor (who appoints the DDA) need to be more "PRO-BUSINESS"! They need to create an environment that helps businesses get started and grow! What does Ann Arbor do? Raise parking rates, makes it more difficult for developers to get a building permit, create more regulations etc etc!

Ron Granger

Sun, Jul 15, 2012 : 4:26 p.m.

My tax dollars are not to support your business. Ann Arbor is the entrepreneureal hub of Michigan. Tremendous resources are available here. Building permits are fact in any city. Parking rates? Have you heard of supply and demand? Parking rates are set based on demand.


Sun, Jul 15, 2012 : 12:53 p.m.

The city honestly needs to do more to clean up the burgeoning vagrancy scene on Liberty. Liberty Plaza has practically become "Camp Take Notice," pushing out average folks and families with unfriendly glaring overt social hostility. What business would want to move into that corridor? Ann Arbor: Make Liberty Street a place worth doing business at. Do something about the homeless invasion, please.


Sun, Jul 15, 2012 : 4:56 p.m.

I tried to eat a sandwich there once and was accosted by a panhandler, and when I ignored him, he went over to the table of other panhandlers and loudly cursed me, then returned over to me with one of his fellow panhandlers, and they started instigating. Things like "hey, HEY, I'm TALKING to you!." Of course, it's also nice to watch them leer at every female that walks by, loudly spewing sexually charged language amongst themselves and others. Wonderful outdoor public family environment. This is why I don't see why they think a park on top of the library lot would be so great. It's just an expansion of Liberty plaza. What, the grass will make it different?

Ron Granger

Sun, Jul 15, 2012 : 2:11 p.m.

The city should pass a law against glaring? Vagrancy..... You want the cops to stop and check how much money each person has in their wallet? If someone commits a crime, call a cop. Liberty Plaza has always been a small, concrete park, with little shade. It's still an okay place to eat a sandwich. It's a fine place for the Thursday concerts.


Sun, Jul 15, 2012 : 12:53 p.m.

...glaring *and* overt social hostility.


Sun, Jul 15, 2012 : 12:15 p.m.

I see the author of this piece has entered a contest: How many times can we use the word "flagship"? Really, so many of these articles, this one being a prime example, are atrociously written - disjointed, repetitive, lacking substance. At least they are generally brief, and thus less trying than they might otherwise be.


Mon, Jul 16, 2012 : 4:06 p.m.

Maybe they are hiring PB? You should submit a resume

say it plain

Sun, Jul 15, 2012 : 7:52 p.m.

I agree lol...this one is particularly terrible, oh my! They are at least generally brief, but the added rambling nature of this one made it impossible to get through. If there was a point here (the title isn't promising in that regard), I had to stop looking for it. I've seen much better essays from undergrads who weren't even majoring in communications-related fields.


Sun, Jul 15, 2012 : 11:56 a.m.

Since we moved here in 1988, the library and Borders were the primary reasons our family went downtown. We would shop before and after. Now we go to Nicola's Books and use the branch libraries where we don't have to search and pay for parking.


Sun, Jul 15, 2012 : 11:19 a.m.

My wife and I would regularly go to the borders store on Liberty. While we were in the area we would walk around and look in the shops. It was a pleasant way to spend an afternoon. Since the Borders closing we haven't gone to that part of town. We also don't visit Main St. anymore. Between the aggressive panhandlers, the ugly graffiti, the cost of parking and the lack of any interesting shops, it's just not worth the trouble to go there. As far as we are concerned Kerrytown is the only bright spot in Ann Arbor that's worth visiting.