You won't find a Tiedtke's, Lion, or Lasalle's department store downtown anymore, but commercial real estate experts and local merchants agree that in several categories, retail in downtown Toledo is becoming resurgent.

"As a community, people are warming up to downtown and are coming back downtown and supporting the businesses there," said Pete Shawaker, a commercial Realtor with CBRE Reichle/Klein in Toledo.

In its annual Toledo Retail MarketView report issued last week, CBRE pegged the downtown retail vacancy rate at 20.5 percent for 2011. While that is above the overall Toledo-area rate of 14.7 percent, it is down from 37.6 percent in 2002, and below the five-year average of 21.5 percent since 2007.

Harlan Reichle, senior managing director of CBRE, said the real estate firm always wrestles with identifying properties to include as leasable retail space in its report, making downtown retail vacancy rates more difficult to calculate than suburban retail, where a building's purpose is more clear. But there's no doubt downtown retail is active and growing, he said.

"There's been leasing activity. There's been a lot of blowouts and failures too, but afterwards there's a lot of reloading of those properties," Mr. Reichle said.

Mr. Shawaker breaks downtown retail into three categories -- retail in building lobbies, destination retailers, and entertainment.

Lobby retail fluctuates, depending on how full the building is in which it is located, while destination retail is steady, Mr. Shawaker said.

Entertainment, though, is flourishing, thanks to the addition of Fifth Third Field and Huntington Center, experts agree.

Downtown retail has "transitioned from true retail to entertainment retail," said Germano Bressan, a retail specialist with the Toledo office of Signature Associates. "It's changing, evolving, growing. Now there's a choice of six or 10 [entertainment] places you can go to instead of three."

After projects such as Portside Festival Marketplace, the SeaGate Convention Centre, and the restored Valentine Theatre failed to bring large amounts of people downtown, the growth in entertainment retail has become the carrot that is attracting suburbanites back downtown, Mr. Bressan said. "I think people are driving downtown for the restaurants," he said.

According to the Downtown Toledo Improvement District, there are 75 dining establishments in the downtown retail district, with new establishments such as jazz bar and restaurant 151 on the Water and nightclub-restaurant The 329 opening in just the last few months.

"What drives this is the demand. You have places like Table Forty-4 that's serving people after work, but I also think people will drive downtown for these restaurants," Mr. Bressan said.

Fierce competition

Competition is fierce too, Mr. Bressan said. "You have others popping up when one folds," he added.

As an example, Quizno's subs on Madison Avenue recently ceased operations, but in the space next door signs recently went up indicating the arrival soon of a new coffee house, Bleak House Coffee.

The synergy of downtown entertainment retail was enough to convince Marco's Pizza chain founder Pat Giammarco, who owns all 20 Toledo-area Marco's Pizza restaurants, to last year buy a building at 611 Monroe St. near Fifth Third Field. Mr. Giammarco is rehabbing the 135-year-old building to convert it into an Italian restaurant he plans to open this year.

"It'll be pasta, pizza, and specialty pizzas, burgers, salads -- kind of like fun, ballpark entertainment food," he said.

A few years ago Mr. Giammarco would not have invested in downtown retail, but now the timing is right, he said. "I think downtown has got a lot of growth, a lot of possibilities," he added.

"We've got plenty of food places and bars and entertainment. Now what we needs are some laundromats, flower shops, drug stores, and grocery stores downtown," he said.

Basic services

But it may be a long time, if ever, before basic products and services retailers return to the downtown in a meaningful way.

Downtown Toledo has three convenience stores, with the Madison Market at 901 Madison Ave. opening in 2008, but the last grocery store, located in the Lasalle Building, closed three years ago.

Dry cleaner Lasalle Cleaners still operates downtown, but other typical suburban strip mall retail, such as card shops, flower shops, book shops, shoe stores, or drug stores are not downtown.

Mr. Shawaker said that retailers of products and services, known as soft goods, don't operate downtown because not enough people live in the area to keep such retailers profitable.

"Residential is continuing to grow. You have new projects, like the Standart Lofts, and more projects to come. Those people will increase demand," Mr. Shawaker said. "But it's still a question mark of whether we'll ever get enough critical mass to justify demand."

Retail florist Frank Viviano, owner of Bartz Viviano Flowers, agreed.

He closed his last downtown store in 2007 and shortly after he departed, two other downtown florists left.

"We didn't see any growth in downtown and we found that a lot of our customers at our downtown store were buying as frequently at our suburban locations as they were downtown," he said.

"My theory on downtown and the reason you're not seeing basic services downtown is it all relates to the population living downtown," Mr. Viviano said. "If you don't have enough people residing downtown you won't have enough of the customer base to support services downtown.

"If you can't even support a grocery store, then the rest of [basic] retail can't make it," he said. "I have hopes for the Marina District, and if the Marina District comes to fruition and generates enough housing for people with disposable income, maybe there would be enough to support regular retail. But it's hard to make that case now."

The Marina District is across the Maumee River in East Toledo.

Downtown's rebirth

Bill Thomas, executive director of the downtown improvement district, said people always talk about the lack of a downtown grocery store, but it's not a good barometer of urban retail. "There are ways for people to get their groceries. It's not an impediment to living downtown or being downtown," he said. "At some time, the demographics will be good enough to put a small grocery store downtown, and even now the convenience stores have changed their business model and are now providing produce and other grocery items."

For now, Mr. Thomas said it's more important to celebrate the rebirth of downtown retail and help it grow.

"In the services sectors, you have 45 places and 18 [different types of] retail activity. There isn't a bank in town that's not represented downtown, and you have barber shops, nice salons, a car rental place, an interior design place, and two dry cleaner locations," Mr. Thomas said.

Many other bricks and mortar retailers, like music, movies, and books have gone online, making them unnecessary downtown, he added. "When you look you can get most everything downtown. There's even a pawn shop where you can buy appliances," he said. "Something we won't get is a big box store downtown. Downtown is going to be mainly unique boutique retail."

Boutiques thriving

Many "boutique" retailers, such as Michael David Ltd., Sophia Lustig Shop, Sophie's Sister, Roth Furs, the Paula Brown shop, and Swan Creek Candle Co., are thriving, Mr. Thomas said.

Michael Brinker, 60, owner of Michael David, which sells high-end men's clothing, said he has waited 28 years for a retail revival downtown and is glad he is around to see it.

"The pieces are filling in little by little, and all of a sudden you're getting an idea of what things are going to look like in the future," he said.

But he agrees with Mr. Thomas that the heyday of department stores downtown is long dead. "Downtown will remain boutique-y and small. If someone is waiting for a department store, they'd better talk to their grandparents about what it was like because they're not going to get a department store downtown," he said.

To survive, stores like Michael David and others have had to become "destination" retailers -- businesses so well known that customers come to them.

Mr. Brinker said the majority of his customers come from Maumee, Perrysburg, and Sylvania.

Ann Albright, owner of the Swan Creek Candle Co. store downtown, pulls in customers from all over Lucas and Wood Counties.

"This is a wonderful location for us because of the Mud Hens and the convention center and the Huntington Center. We get tremendous exposure," she said.

Customer base

While Swan Creek Candle might do well in a mall setting, its corporate identity is tied to occupying historic buildings. Because the historic buildings are downtown, that is where the company felt it had to be.

"We attract a certain customer that likes that, that's tired of the malls. You've got to be willing to build a customer base and offer something they can't get at the local mall or strip center," Ms. Albright said.

While it would be nice to have soft goods retailers nearby, she said its apparent that there aren't enough residents living downtown to build a base for a soft-goods retailer. "We're open seven days a week. We are busy on Sundays because that's when our customers in the surrounding Toledo area can come downtown and shop. But it took two or three years to build that customer base and get people to find us," she said.

Julie Hartten, former owner of Swank Gifts downtown, never could establish that customer base. She sold her store to Kathy Steingraber, the former executive director of the Warehouse District, in November after struggling to generate enough sales to make ends meet.

"You really have to have deep pockets to keep it going when the economy is slow. I didn't," she said.

Ms. Hartten said she underestimated what it would take to keep a downtown business going. Also, she was trying to operate two online business while running Swank Gifts. "I really extended myself too much. Had I focused on just retail or just my online businesses I could have sustained it, I think. But it became all too difficult," she said.

Ms. Hartten said there are many positive things happening downtown and many young and affluent people moving downtown. "But there's not enough critical mass yet," she added. "You work twice as hard to get people to come in," she said.

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.

First Published January 22, 2012, 5:15 a.m.