Merchant of Somerset

How Sidney Forbes, a native son of Detroit, used on-the-job training to develop one of the nation’s finest collections of luxury shopping malls.

The retail world keeps getting smaller. Huge, publically traded corporations control the vast majority of shopping malls across the nation, breaking into the business is near-impossible, and regional players must be constantly on guard against a hostile takeover.

For decades, Sidney Forbes — who 50 years ago took a tidy parcel of land in Warren and turned it into a multimillion-dollar luxury mall company — has navigated through national and local recessions, retail bankruptcies, and changing demographics. As senior partner of The Somerset Collection in Troy (co-owned with Frankel Associates), along with three upscale shopping malls in Florida, Forbes oversees arguably the most coveted retail properties in the country. In contrast to larger-than-life corporate personalities, Forbes built his empire on quiet diplomacy.

“Sid is a person who places a tremendous value on relationships,” says Bobby Taubman, chairman, president, and CEO of Taubman Centers Inc. in Bloomfield Hills, which is a partner with Forbes in two properties: The Mall at Millenia in Orlando and Waterside Shops in Naples. “And when I say relationships, I mean deep relationships with the top echelon of retailers, local politicians, and the people that work for him.

“He’s been successful in so many ways, and across so much time. That just doesn’t happen. You stumble from time to time, and he’s taken big risks, but he always has been very measured. He doesn’t allow himself to be driven by his emotions; rather, he collects all the facts, and charts the way forward with a team he’s cultivated and nourished.”

When asked to sum up his business philosophy, Forbes, a modest man by nature who would rather underwrite a Broadway musical than perform on stage, recalls a recent conversation he had with legendary golfer Jack Nicklaus.

“I asked him how it felt to be the greatest golfer that ever lived, and he talked about his drive for excellence, his practice regimen, and his humility,” says Forbes, senior partner of The Forbes Co. in Southfield. “That latter trait kept him from getting caught up in all of the things swirling around him. Then (Nicklaus) asked me the same thing about our business, and I said I always wanted to be the best I could be. If I can’t deliver excellence, it’s not worth doing.”

With the Urban Land Institute Michigan District Council recently presenting Forbes, 75, with its Lifetime Achievement Award, the self-taught developer reflected on a life and a career that has had its share of challenges — not the least of which was the death of his father in 1949.

He also shared his vision for the next phase of development at Big Beaver and Coolidge — by all accounts the epicenter of luxury shopping in the state. In addition to Somerset South and Somerset North, Forbes acquired the former Kmart Corp. headquarters at the northwest corner with Stanley Frankel, principal of Frankel Associates, in 2010, and became a partner with Southfield-based Nemer Property Group Inc., which owns Troy Place, a large office complex that includes an Ocean Prime restaurant (ground lease) on the southwest corner.

Kmart’s headquarters won’t be razed anytime soon — Forbes believes a vacant site would only detract from the local skyline — but he says the wrecking ball isn’t far off. Over the next decade, Forbes envisions a signature office building on the site, complemented by a five-star hotel (think Four Seasons), luxury residences, and several elegant shops and eateries.

“You will see a development of some magnitude at the Kmart site, because when you look at the four corners, the Kmart parcel needs to be integrated into the area,” he says. “All of the four corners need to support each other so that you offer a very urbanistic experience as it relates to visitors, pedestrians, and traffic flow. We won’t add a lot of retail because we have Somerset, but it will be a landmark project. It will be something the city and region can be proud of, and something Michigan can be proud of.”

Oakland County Executive L. Brooks Patterson says he never doubted Forbes would demolish the Kmart campus, a labyrinth of circular office pods that is one of the most inefficient corporate headquarters ever constructed.

“If anyone could figure out what to do there, it’s Sid Forbes,” Patterson says. “His name is synonymous with quality. He lays out a plan, he gets to know you, and he does what he says he’s going to do. I call him King Midas.”

The Early Years

Forbes wasn’t born into wealth. His father and uncle ran a business in Detroit that crafted fixtures for retail stores. “When my dad died, my mom worked with my uncle and that’s how the family got through those years,” he recalls. “I was like any kid, eager to grow up and make my mark in the world before it passed me by.”

After graduating from Central High School in 1954, Forbes worked for a contractor and took classes at Wayne State University. At the time, America was booming, and Forbes was eager to learn a trade and be a part of the excitement. “I was anxious to get into the real estate business, so in 1962 I managed to tie up an 80-acre parcel of land at 12 Mile and Dequindre (the former Universal Mall in Warren),” he says.

After several months, Forbes received approval to rezone the land and subsequently built a typical project by industry standards — a line of nearly 80 small shops and restaurants with a department store anchored at either end — Montgomery Ward and Federals.  “It was on-the-job training for me,” Forbes says of the center that debuted in 1965. In the late 1980s, Forbes sold the center.

In the ensuing years, Forbes developed similar projects, roughly 500,000 square feet of combined space, in Lansing, Grand Rapids, Kalamazoo, Jackson, and Battle Creek. Reflecting changing times and trends, the anchor store names offer a historical review of how the retail industry has changed: Montgomery Ward (the chain closed in 2001), Hudson’s (later Marshall Field’s and now Macy’s), and Sears (merged with Kmart), among others.

Despite the success of the centers, Forbes wasn’t content. He had aspirations of developing a luxury mall, and in the early 1980s he set his eyes on Florida. At the time, Michigan had a population of 10 million people, while Florida had nine million people (19 million today).

During family vacations to northern Palm Beach County, Forbes became aware of a parcel of land that the MacArthur Foundation wanted to sell, ostensibly for a shopping mall. Given the land was located in an area of relative wealth, Forbes competed against several larger developers for the project.

Following more than a year of intense negotiations, Forbes won the competition, purchased the land, and lined up some of the most notable retailers in the industry — Saks Fifth Avenue, Bloomingdale’s, Macy’s, Berdines (since replaced by Nordstrom), and Sears. The project, The Gardens Mall in Palm Beach Gardens, was an immediate hit when it opened in 1988.

“It’s interesting, you look back to the 1960s when I was coming up in the industry, and Kmart and Sears were the absolute kings nationally,” Forbes says. “In Detroit, we had Hudson’s, and they were arguably the first to build a suburban mall (Northland Mall in Southfield) in response to people who were moving away from the cities. And that’s all I knew back then. But in the next 20 years, the entire industry changed, and I had to change with it.”

Diamond Mine

Looking back, Kmart and Sears lost touch with their core customers. Rather than serving two masters — operating large strip centers and luxury malls, and thereby running the risk of cutting himself thin — Forbes sold his Michigan portfolio to General Growth in the late 1980s. Repurposed, he searched for another opportunity in the luxury arena and approached Sam Frankel, co-owner with his son, Stanley Frankel, of Somerset Mall (now Somerset South), about an expansion.

Following a partnership agreement, Forbes embarked on what he considers his toughest project: adding a second level to Somerset Mall, which opened in 1967, without closing the center.

“It was crazy,” he recalls. “We had the construction crews come at night, and they would literally drop (steel) columns through the roof and into the walls of the stores, plus set the foundations. The parking lot was constantly dirty, so we gave everyone free car washes. It took a tremendous amount of planning and cooperation, and in the midst of it Bonwit Teller went bankrupt so we brought in Neiman Marcus.”

After the expansion opened in 1992, Forbes immediately launched into his next challenge: Somerset North. He signed a flagship Hudson’s store early on, and worked with Nordstrom for three years to convince the company to open its first store in Michigan. With the two anchors established, Forbes and his team — his two sons are active in the business; Nate serves as managing partner, while David is the leasing partner — turned their focus on attracting unique interior stores, roughly 30 percent of which were new to the state.

“What I set out to do early in my career was provide a shopping experience that was as inviting as the nicest living room,” says Forbes, whose early partner was Maurice Cohen. A signature stable was an open and inviting atmosphere free of kiosks, carts, and vending machines (clutter, in retail parlance). Well-known architect Jim Ryan set the tone with a modern, contemporary exterior that continued inside with the generous use of marble and hard wood surfaces, along with elaborate landscaping features, fountains, and skylights.

“You want the customer to feel as relaxed and comfortable as possible,” Forbes says. “I mean, if I ran a retail store, that’s where I’d want to be, and that’s why we’ve been able to draw great stores like Louis Vuitton, Gucci, Chanel, Coach, Burberry, and Tiffany & Co. It’s very much like the design and tranquility you experience at Cranbrook (in Bloomfield Hills), just an incredible space that lends itself to exploration.”

A few years later, Forbes replicated the “living-room experience” with the opening of The Mall at Millenia in Orlando, located along Interstate 4 and not far from Walt Disney World. The center smartly replicates the Somerset Collection, including the national stores themselves — Macy’s, Neiman Marcus, Bloomingdale’s, Apple, and Gucci, to name a few.

While other developers may have had their fill of expanding an existing center, Forbes and Taubman acquired the Waterside Shops in Naples and set about transforming the development into a shopping mecca. The project offered several new stores, including a Saks Fifth Avenue.

Steve Sadove, chairman and CEO of New York-based Saks Inc., says the company’s stores at the Somerset Collection, The Gardens, and Waterside Shops stand out. “Given our history as a luxury retailer (founded in 1898), we strive to partner with top developers in the country, and I certainly put Sid Forbes and his family on that list,” Sadove says. “Our customers expect quality, and when you walk into a Forbes mall, you immediately are struck by the high level of finishes, the attentive staff, and the atmosphere. That doesn’t happen by accident, and it takes an incredible team to pull it off.”

Somerset in the D

Beyond the next wave of development in Troy, Forbes has taken a keen interest in the ongoing redevelopment of downtown Detroit. In partnership with Dan Gilbert, founder and chairman of Quicken Loans Inc., The Forbes Co. opened CityLoft in two adjoining buildings lining lower Woodward Avenue last summer.

Open the last weekend of the month (Thursday through Saturday), more than 40 Somerset retailers displayed their wares in a loft-like setting, complete with new urban touches that shed light on what makes Forbes a successful mall operator — luxury vehicles displayed on the sidewalk, well-dressed greeters, mood lighting, and creative displays.

The only regret is that the store can’t sustain itself year-round until more people are living and working in the area, although CityLoft will return this summer. “Sid is not only an outstanding real estate visionary, but he is also a detail guy,” says Gilbert, who is redeveloping several downtown historic structures. “That’s a rare combination when it comes to most business ventures. When you combine that kind of skill and experience with the highest standards of integrity and character, you can clearly understand why Sid and The Forbes Co. has been so successful.”

As a prelude to CityLoft, The Forbes Co. opened The Detroit Shoppe on the second level of Somerset North in 2010. The store, which donates 100 percent of its proceeds to local charities, provides a museum-like setting that calls to mind Detroit’s glory days and features products from Faygo, Better Made, Vernor’s, and Sanders, and merchandise from the Detroit Institute of Arts, the Detroit Historical Museum, Eastern Market, Pewabic Pottery, The Parade Co., and The Henry Ford.

“Our marketing director, Linda McIntosh, spearheaded everything, and while it was meant to be a temporary store, the demand proved to be deep enough that we kept it going,” Forbes says. “We closed it for a little while to improve the displays and interior design (a second store was opened at Cobo Center), and we developed synergies with historic tours in Detroit and shuttles to CityLoft. Operations-wise, CityLoft is a challenge, given the logistics, but it’s a lot of fun and people really embraced it.”

Jim Bieri, principal of Stokas Bieri Real Estate in downtown Detroit, which represents several dozen retail tenants around the country, says few people other than Forbes and Gilbert would have taken the time and invested the money to explore the depth and reach of luxury shopping in Detroit’s central business district.

“No one is going to build a shopping mall in Detroit anytime soon because the traffic isn’t there,” Bieri says. “But having said that, you’re beginning to see companies and individuals gravitate downtown. Thousands of workers have been moved in, and younger workers want to live downtown or close by. Forbes and Gilbert, like they always have been, are early in the game. Will it work? Time will tell, but I wouldn’t bet against them.” db

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