Vectorform Secures Support for Move into Barnes & Noble Space

It's very clear that Barnes & Noble's days are numbered, according to Royal Oak's director of planning.

City Commissioners green-lighted a parking deal Monday night for Royal Oak-based Vectorform with the intention of keeping the superstar tech company within the city's limits.

Vectorform is hoping to move into the second floor space of 500 S. Main, which is currently home to Barnes & Noble.

If Kurt Steckling, co-president of Vectorform had his way the company would be settled in by March, but it seems more likely to happen in the summer of 2014, he said.

Vectorform was extended a cash grant offer of $375,000 from the Michigan Economic Development Corporation (MEDC) in an effort to maintain the company and its employees in Michigan. One of the grant's requirements is that there be local government participation. 

For its show of support, the city approved the sale of 15 parking permits to Vectorform in the desirable P-3 parking lot, which is directly west of the Barnes & Noble site. The city also agreed to provide 75 free parking spaces in lots P-7 and P-8 for one year. Both lots are off Main Street and south of Sixth Street. The parking spaces are valued at $22,500.

Commissioners also approved the installation of two electric vehicle (EV) charging stations for the company. The city and Vectorform are exploring ways to get assistance to pay for the EV stations.

Jason Vazzano, co-president of Vectorform, said the company has been searching for a new space with more than 15,000 square feet for approximately six months.

The space at 500 S. Main is desirable for many reasons, including its proximity to restaurants and shops and the fact that the space has an open floor plan. The company plans to invest $2.4 million into fitting out the space so that it can attract top talent to Royal Oak.

The company, whose clients include Microsoft, Walt Disney, New York Times, Estee Lauder, American Express and Nike to name just a few, currently has 125 employees in its five offices. Seattle, New York, Munich and Hyderabad India are the other four locations.

Currently there are 70 employees squeezed into 8,000 square feet of space at 3905 Rochester Rd., the global company's current headquarters. The Barnes & Noble space has 19,500 square feet, enough to double the number of employees in the next three years, according to Vazzano.

Vectorform plans to hold on to its Rochester Road building, which it owns.

Tim Thwing, Royal Oak's director of planning, said 500 S. Main's owner, Tim Blum, has been actively shopping for another tenant for some time.

"It's very clear, from Mr. Blums's standpoint, Barnes & Noble's time is numbered," Thwing said.

Thwing said he's not heard of any plans for the first level at this time.

Steckling and Vazzano said Blum indicated that he would "most likely exercise an early exit" option to remove the bookseller. January, February and March — the months when all the returns come in —  are typically the worst months for retail, Vazzano said.

Here's what commissioners had to say

Peggy Goodwin: "I don't feel comfortable giving (the Barnes & Noble's) space to you. You want to move in now. You want to get going now and I don't blame you for that . . . But this, in my mind, is pushing out our anchor retailer." 

Mike Fournier: "For me this seems like an opportunity that can help bridge an inevitable store closing."

Kyle DuBuc: "I think it's a complete misconception that we are somehow forcing out Barnes & Noble. . . Consumers are forcing out Barnes & Noble. . . But's that's not even what we are discussing. We're discussing a MEDC grant helping this company leverage a $375,000 grant to build a state-of-the-art (facility) and bring a cutting-edge tech company with a vibrant 150 employee workforce to our city and at a very reasonable cost to us. At the end of the day, we are going to reap much more benefit than we are putting in it."

Sharlan Douglas: "High wage, high tech jobs in the knowledge industry is like the number one priority for Michigan or for any state in terms of economic development . . . And to have them coming to our city and generating that kind of revenue for our city . . . for 75 parking spaces is a no-brainer."

Mike Fournier: "The $2.4 million dollar investment into the property really makes the $22,500 (of free parking worth it.) . . . With that additional $400K coming in, the $2.4 million, we'll make that up real quick. Hopefully in months, not in years, with the increased value of the property." 

Jeremy Marhle: "The $22,500 is money we lose in one year but we double in three years. That's money that we're making back...It's very much a net gain for our city."

Dave Poulton: "It's doesn't happen quite often that the state is here, as well as the county, telling us what a good project this is going to be for the region. And I'm here to say this is a good project for the city."

Note: Mayor Jim Ellison was recused, indicating his wife has a professional relationship with Blum. The final vote was 5-1. Goodwin was the lone no.

Pbrzez December 17, 2013 at 09:09 AM
I'm sorry to see Barnes and Noble doors close but its a wonderful opportunity to see this high tech co. move into our downtown. Wouldn't it be a nice gesture on the property owner part to keep the main floor rent low. B&N could down size and stay there. As I understand it (correct me if I'm wrong) the property owner has many investments in the downtown area. Wouldn't this be giving back to the community which has supported him?
Ray December 17, 2013 at 09:14 AM
You're going to see a lot more than Barnes and Noble close in Royal Oak. If the city approves landlords raising rents that even national chains like Barnes and Noble and Peet's Coffee can't afford, how do you expect to maintain a downtown with stores?
Andy S. December 17, 2013 at 09:57 AM
This plan is fantastic... I've spent my fair share of time and money in Barnes & Nobel... It's a great store with an unsustainable business model... Let it go and welcome the young, vibrant tech company and pray that we can attract 10 more just like it.
Ron Arnold December 17, 2013 at 10:35 AM
As much sense as this seems to make, I still can't see people from other communities want to come to Royal Oak to see an office building. It's key to keep some sensible retail operation on the ground floor. What does our master plan say about putting a potential 150 people and their cars into a downtown business setting? Where is the traffic impact study? What is the plan for AB&E - remember that it will essentially shut down their operations for a week or more? I just don't want the $$-eyed commissioners to rush into something that doesn't make sense for the WHOLE community.
Mike Ripinski December 17, 2013 at 10:43 AM
I will hate to see B & N go but they cannot survive in the large space that they currently occupy because they can't generate the retail dollars per square foot needed to make a profit. It is not a good business plan for them or the landlord. It is a free market and he has the right to obtain the rent dollars that are determined by market demand. ( within city laws and regulations ) The big question will be - What happens to the main floor? Stay tuned.
The Duke of Royal Oak December 17, 2013 at 11:10 AM
Call Barnes & Noble and they say that they are not closing. Mr. Blum first presented a restaurant at this location, then retracted that plan before a meeting with the city. The city has said that Barnes & Noble's rent was reduced by Mr. Blum. Whatever the issues are between Mr. Blum and Barnes and Noble, the fact that there is no lease agreement between Mr. Blum and Vectorform, the city council should not have voted on this issue. Any speculations by city officials as to what business's have their "time numbered" or will survive nationally is inappropriate. The city spends needless time micro managing business's and needs to step back and let the free market work as intended.
Wm. Allen December 17, 2013 at 11:11 AM
Last night’s Commission meeting regarding such an important decision as the fate of our key anchor store, Barnes & Noble, felt a bit rushed to me. A big question is what will happen to the first floor of the building currently occupied by Barnes & Noble. The Commission should have had some idea of the intended use of the first floor before passing out incentives. The Commission should have been even more cautious about giving incentives, since we just had a tax increase to maintain needed city services. For years Barnes & Noble rents were sufficient, but now it seems like soon only a Bar/Restaurant will be able to afford the Main Street rents. There was a time, when Bar/Restaurants filled otherwise empty store fronts, but it seems now they are creating empty store fronts, at least until the landlords can get the City Commission to approve yet another Bar/Restaurant. I’m in favor of Bar/Restaurants; but not at the expense of existing retail stores. And for those who said the Commission’s decision was not about Barnes & Nobles, well think back to the last time someone walked up to you and said they didn’t want to offend you. I heard about market place determination at the meeting, well the $370,000 state grant and City incentives doesn’t sound like the work of a free market. As for attracting people to downtown Royal Oak, I suspect Barnes & Noble brings many people to downtown Royal Oak. As for job creation, I don’t recalling hearing much about the people who are currently working in the Barnes & Noble store. Sure, our Barnes & Noble store may be doomed, but do we need our City Commission to jump at the chance to pay for the nails that will be driven into the store’s coffin. As for the Royal Oak residents that spoke on behalf of Barnes & Nobles, they were just the tip of the iceberg. I’m ashamed to say I did not go out on a dark, cold night to also have my voice ignored by the City Commission, excluding Commission Goodwin; who suggested the Commission not rush to judgment. With that said, I am sure everyone on the Commission did what they thought best and I appreciate their volunteering (they are paid practically nothing) to serve the City. I also do not expected to agree with all their decisions. I don’t know if the Commission was right or wrong, time will tell. But I know the commission paid a lot more attention to non-Royal Oak residents than it did to the people who live in this city.
The Duke of Royal Oak December 17, 2013 at 11:34 AM
It has become difficult for bars and restaurants to survive in downtown Royal Oak. Is it because of the high rent by landlords? There were 3 established restaurants that requested and received change of plans for their establishments at the city commission meeting 16 December 2013. Commissioner Goodwin was the only commissioner that got this right.
Michael Abdallah December 17, 2013 at 01:18 PM
The RO City Commission should deny office projects when they are proposed in retail spaces! If not, this behavior will drive the foot traffic down to a point that no retailer will be able to survive. Retailers require symbiotic relationships for all to thrive. The RO DDA is not serving those that it levies and collects taxes from well! Downtown RO would have far less of these fights about retail vs. office vs. bars if it had Downtown Business Attraction Manager generating leads for the Downtown. In my opinion it is a conflict of interest, or at least a bad idea for Tim Thwing to be the Executive Director of the RO DDA AND the Director of Planning for the City of RO (and get paid by both the City AND the DDA). If you look on the City of RO website under DDA, they don’t even list Tim Thwing as a member of the DDA… seems clear they feel uncomfortable about it as well. Nothing against Tim, but how could anyone do a good job at both…? Fixing the bad policies and practices of the RO DDA will go a long way in fixing the issues Downtown RO is facing!
Joseph Wisniewski December 17, 2013 at 02:30 PM
I'll start with a disclaimer. I work for Vectorform.But I do not speak for Vectorform. Vectorform has enough people who speak for it already, people who do that sort of thing much better than I do. I speak only for me, Joseph, who has been patronizing Royal Oak businesses for decades. I speak for me, a steady customer of Ariana, Footprints, Nutrifoods, Goldfish Tea, Incognito, and a host of others. I have never set foot in that particular Barnes and Noble, and it's been there an awful lot longer than I've been a Vectorformer. But I've shipped at Chozen Books, one of the independent bookstores that was crushed to death by that Walmart of Words. It pains me to see those folks being painted in such a nostalgic light. Have you all forgotten already, how hard we worked to stop them? I stood with independent bookstore owners like Cary Loren of The Book Beat to get the word out about the chilling effects of conservative corporations and their censorship of writers, small-press publishers, and even mildly controversial classics. Heck, B&N even censored an Andrej Pejic magazine cover because he did not properly represent the gender stereotypes that B&N's conservative agenda promoted. Did you know B&N is their own printer and publisher? Don't worry about it: monopolies are good, they're very "efficient". But I digress... I speak for me, a past customer of so many home-grown businesses that couldn't survive the onslaught of national and international chains with their "prefabricated cool" and big-box tactics. I speak as an old friend of Lew Denison, who owned Royal Camera until the big boxes destroyed the local camera store, and as a friend of Bob Johnson, owner of Flute Specialists, whose building at Main and Eleven was demolished to build those fugly "loft style" condos. I don't speak for these people, again, they speak quite well for themselves, just "as" their friend, to give you an idea of where I'm coming from. Sorry, that was a bit long. I was there, checkbook open, when so many homegrown businesses opened, and I grieve every time one was strangled by these national chains. So many galleries, antique shops, music stores. Remember the Pepper Store at main and fifth? Remember the Carol James gallery? Why is the Best Buy of Books suddenly a cultural icon? I was at meetings when concerned residents were describing that thing in the most derogatory terms permitted on the council floor. Stoping it was a "cause", we were "fighting the good fight". When did it become an "anchor store"? What does a big box anchor? People come, they shop, they go home.
Joseph Wisniewski December 17, 2013 at 02:32 PM
Holy wall of text, batman! This thing ate my paragraph breaks.
Ron Arnold December 17, 2013 at 02:56 PM
Based on your logic, Joseph, I'd oppose the "giant" Vectorform coming into downtown because, due to their massive size and resources, they will cause smaller RO-based operators to lose business. iWerk, a couple of boutique animators, and post-production houses like Switch and Ron Rose will no doubt be driven out of business by your "big box" approach. In the real world, that won't happen and although B&N could have influenced the outcome of small-book operators like Chozen, it wasn't their death knell. Like it usually is, a combination of factors caused that business to fail, among which were a highly limited pool of customers, a thin selection and finally the move to Ferndale where the business eventually closed. I'm all for keeping small retail, but unless the rents come down, all we'll see in RO will be big businesses. I guess that's the way it goes. By the way, I think that the flute guy is doing great, in his own building (residence on top), on South Main.
nofuture December 17, 2013 at 04:56 PM
Rent is not defined by the City Government. This will generate revenue, not stretch resources and provide customers for other businesses. It is basic mixed use planning. I suspect that real outrage has to do with one less public bathroom. B&N is basically that to most. Otherwise, they'd be able to make rent.
Sherry Lane December 17, 2013 at 04:59 PM
I love the Flute House !!!!!! wonder if Incognito is leaving because of the higher rents... it's a shame !!!!
CDE December 17, 2013 at 11:07 PM
That is silliness Ron Arnold, you are comparing retail shopping to businesses that require no store fronts or face-to-face customer relationships? No logic Ronald. Myself personally, I love this plan and this is great refreshing news to see a non-retail or restaurant bringing a significant number of employees to downtown in what should be a non-retail space. Has anyone here been to Vectorform's website? This is a high caliber company that any city would love to have in their city--especially in their downtown area. Should be interesting to see what happens on the first floor. To be continued...
Matt Turner December 18, 2013 at 09:03 AM
As long as the first floor is kept retail and is not converted to office space I really don't see the issue with giving the upstairs to Vectorform, but aren't there two vacant office buildings in Royal Oak already? The one next to the parking structure behind Charter One and the first floor below Douglas J. Anyways, it would be nice to know the intended use for the space on the first floor. Maybe a forward looking individual will bring some successful national retail chains downtown...
Ron Arnold December 18, 2013 at 09:07 AM
I don't understand the first part of your comment CDE, as I was responding to Joe, but I'm FOR the downsizing of B&N to make way for Vectorform or whomever can afford to pay the $20k a month for that space (as long as it's not a mega-bar.) I'd like smaller scale retail to not be "rented" out of existence downtown. I think that we are agreeing?
Blousy Richards December 19, 2013 at 07:53 AM
So while everyone is saying this or that about the companies, how about the people inside? Those are YOUR people, Royal Oak. They brought money to your city every day, paying for parking (no free passes), eating at your restaurants, shopping in your stores, and I know for a fact that a bunch live right in Royal Oak. Some even recently moved there to be closer to work. This isn't just about a building, a company, or a store. These are lives we are messing with. About 50 or so lives that will be added to the ever-growing unemployment numbers of Michigan. Don't think these good people will be absorbed into the surrounding Barnes & Nobles either. Not going to happen. So, City Planners, how many of these people you are about to displace will you be hiring? Oh, and do they get free parking too?
Angie December 19, 2013 at 04:55 PM
The Flute House is the new building next to Haberman's and is doing well. Robert Johnson of The Flute Specialists was moved from 11 and Main to 13 and Rochester to build the lofts.
Ray December 20, 2013 at 01:51 PM
The Vectorform crew said Barnes and Noble is leaving because the landlord is tired of subsidizing them (for a whole year). What hypocrites! They just got awarded a subsidy from the city of royal oak for one year. Main Street will soon look like some of the most mismanaged downtowns in our state...Pontiac comes to mind. Thank you Commish Goodwin for the no vote. Royal Oak is losing too many top retail stores at once. Something stinks.
Karen Jackson Stillwagon December 20, 2013 at 05:53 PM
I think what stinks is greedy landlords!!! I've lived in Royal Oak since 1948 and I've seen it when NOTHING was happening, almost no retail, and very little of anything else. I'm thrilled the downtown is doing well, but I loved the city when I was a kid and we did ALL OUR SHOPPING IN ROYAL OAK. Ward's, Winkelman's, A.S. Beck shoes, Meyer and Dobies jewelry stores, Sander's, two dimestores, at least two drug stores, Grinnels, and many more. I am sad to see Barnes and Noble leave. I hope they can stay on the ground level retail space and the employees can keep their jobs. Karen Stillwagon


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