Town and gown came together on State Street after 1870 to create Ann Arbor's second shopping district. Grocers, barbers, and tailors served both communities, while billiard parlors, dining halls, bathhouses, and bookstores catered to the growing student population. John Nickels Meat Market, added to the front of his home, was one of the early commercial buildings transforming the neighborhood. After 1890 the streetcar linked Main Street and campus, and several downtown businesses added branches here.
J. J. Quarry opened a drugstore in his new building at State and North University in 1898. It specialized in supplies for nearby University hospitals and the medical and dental schools, as well as the offices of doctors and dentists over neighboring shops. James Foster's House of Art, which opened in 1906 featuring Arts and Crafts gifts, drew an affluent and sophisticated clientele to State Street. In 1915 Tom Nickels replaced his father's meat market with the city's first shopping arcade. The terra-cotta building's bank, luxury shops, and post office branch symbolized State Street's twentieth-century identity as a fashionable shopping destination. That market was challenged in the 1960s by shopping malls, the lifting of UM's ban on cars for undergraduates, and changing tastes of the Vietnam War era. By the end of the century, chain stores, coffeehouses, restaurants, and sportswear shops replaced many older businesses. Books and music remained staples; Tom and Louis Borders opened their first bookstore here in 1971.