Being a business owner in East Lansing isn't easy.

If a business can't appeal to a wide range of people and take a unique approach to marketing its product, chances are, it won't survive.

"You've seen businesses that have struggled and gone out of East Lansing," said Trisha Riley, one of the owners of Harper's Restaurant & Brewpub, 131 Albert Ave. "You have to have a bit of a creative flair that appeals to the surrounding neighborhoods, including Michigan State."

Although turnover is normal, about one-third of the downtown's businesses are under-performing, said Tim Dempsey, the city's community and economic development administrator.

"People talk about turnover as being a problem; the reality is if you look at any retail area, turnover is a fairly natural process," Dempsey said. "More than half of all small businesses fail within the first five years.

"That's the reality of the American economy."

Fight for survival

When students moved away the Northern Tier and Lansing, they stopped shopping downtown. This hasn't boded well for the city's economy.

"The overall trend of students moving farther away from the downtown has certainly had an impact, especially in terms of the amount of students we see downtown," Dempsey said. "If you go down closer to Holt … I'm sure you will see students down in that area. DTN (Management Co.) built a lot of apartments down in the Holt area."

Gearing a business to suit the needs of permanent residents, in addition to students, can save it from going under, especially during the summer months, Riley said.

"We don't have any difficulty with our business or sales at Harper's," she said. "It's not just geared toward students. It's got a wider spectrum, and our sales have increased every year."

Stores that are open for a few years often cause most of their own problems, said Howard Ballein, owner of the Student Book Store, 421 E. Grand River Ave.

"Most of those stores defeat themselves," he said. "Either they don't have the right product, or they don't have the right idea for how to do business here. There are a lot of places where people can buy things.

"They don't have to come here to the Student Book Store to spend their money. We don't have a locked-up deal here (with students), and people need to understand that."

New kids on the block

Newer businesses on Grand River Avenue are drawing people back into the downtown. The "fast casual" restaurants, such as Big Ten Burrito, cater to what students want, Dempsey said.

"We've seen our parking rates in the adjacent facilities go up," he said. "We've seen the foot traffic from campus increase, too."

Running Big Ten Burrito, 403 E. Grand River Ave., which opened in August 2005, is challenging, owner Luke Bostic said. The restaurant did well during the school year, but there are still some rough patches ahead — the exodus of students for the summer hasn't been good for business.

"Big Ten Burrito had been really successful in Ann Arbor," he said. "We've only seen some of that success here. We added the delivery service, and that really has been helping us out."

American Apparel, 115 E. Grand River Ave., is doing fairly well, said Chelsea Burns, the store's manager. Students have flocked to the store since it opened in early April and like having a clothing store close to campus, she added.

"We started out pretty strong, but now that the students are gone, it's a little slow," the 22-year-old said. "Stores like this made the students feel like they are in a city that's bigger than East Lansing."

Feeding off of the positive response some new businesses have had, city officials now have a better idea of what they want to see developed in the downtown.

"In terms of retail, there are a couple things we would like to see more of," Dempsey said. "We would like to see more clothing retailers — we would like to see more upscale restaurants. The market really drives that."

Looking ahead

The city is trying to ensure it's not dependent on the student dollar. By placing permanent residents in the downtown, officials believe that businesses will have a built-in client base.

Broadening the types of people who live near the downtown is an easy solution, since past retail and housing projects were targeted at students, Dempsey said.

"We have a large student market here already," he said. "We don't have a more permanent population that lives in or near the downtown. Permanent residents (spend money) 12 months out of the year."

Past developments, such as the City Center Project, have been successful in creating a neighborhood in the heart of the downtown, Dempsey said. The City Center Project was designed to bring in 39 condominiums primarily occupied by permanent residents.

Plans are in the works to construct City Center II at the corner of Abbott Road and Grand River Avenue.

"We are trying to create a social fabric for the community," Dempsey said. "A lot of times students are moving to different houses or apartments, and there is not a long-lasting social fabric. That's one of the things we hear has worked well in City Center. They are like a self-contained neighborhood."

Kris Turner can be reached at turne112@msu.edu.