Vacancies on Bank Street in the Glebe: the BIA perspective

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The vacancy rate on Bank Street is 5 to 7 per cent, which, according to Glebe BIA executive director Andrew Peck, is “both normal and less than that experienced by nearby commercial areas deemed to be similar or competitive in nature.” Photo: Liz McKeen

by Andrew Peck

Recently I had the opportunity to speak about the commercial health and well-being of the Glebe to members of the Glebe Community Association at its annual general meeting. Much of this article is based on that presentation.

Business vacancies are a legitimate concern. No other issue is raised as often by members of the community. Vacancies represent loss and missed opportunity; they are holes in our landscape. The visibility and concentration of empty spaces in the area and the turnover seen since the reconstruction of Bank Street have caused some alarm bells to go off. It is something we all take seriously and for this reason, much of our work has been focused on improving conditions that will support our businesses and attract new ones. The good news is that many of the challenges our businesses face are not unique to the Glebe; the bad news is that there are many challenges that face businesses in general and they ultimately affect the commercial well-being of our neighbourhood. There’s no two ways about it.

IMG_7079When a business closes its doors, the relationships we have built with its owners and staff over time ends. With this comes a feeling of loss. Notwithstanding the reasons behind the closure – personal choice, a move to a more suitable location, a consolidation of the business, the bankruptcy of a larger company, changing market conditions, poor management or even tragedy (the fire in April 2016) – ultimately it is a loss and the vacancy itself takes away from the on-street experience and the area’s full potential.

That said, ongoing turnover is something that all commercial areas deal with and a short drive around town will confirm this reality. While we do have a dozen or so empty storefronts in the Glebe, our vacancy rate of 5 to 7 per cent is both normal and less than that experienced in nearby commercial areas deemed to be similar or competitive in nature. We have also seen many new businesses open in the Glebe. The openings outnumber closures over the same period and are many more than elsewhere in Ottawa.

Ultimately, we want to see every available location occupied, but recognize that “fit” is of the utmost importance. For a business to be feasible and viable, it must be the right business concept in the right space, and this takes time. For property owners, they may need to be considerate of surrounding tenants, the needs of the community and the track record of the potential new operator. These are long-term relationships that need to work for everyone to be successful.

Rents

A common refrain is that leasing rates are ultimately to blame for business closures and vacancies. However, the problem is far more complex. Major urban centres including Ottawa are becoming more expensive across the board for residents and businesses alike. Everything is going up. Consultations in recent months with brokers and agents who work in areas throughout the city, as well as business owners who run multiple operations in different neighbourhoods, have all indicated that leasing rates are relatively consistent in comparable areas. Here in the Glebe, these rates have remained rather stable and in some cases have even started coming down. A survey we conducted in 2016 asking our local businesses what they pay for retail space verified the net per square foot cost we’ve been quoted by various sources. There are always exceptions, but for those businesses that aren’t fortunate enough to own their property, the real issue at hand is the operating costs over and above the net rate being charged for a location. Add to this a countless number of other costs that affect the bottom line and profitability becomes increasingly elusive. Now throw in changing trends or ongoing challenges that reduce demand or market share: large discount retailers, online shopping, economic uncertainty, a change in the cost of labour and even weather can change the day. Things quickly go from a nickel and dime affair to a penny-counting exercise.

 Many of the major challenges facing businesses are not specific to the Glebe. Outfits throughout Ottawa, the province and across Canada are confronted with similar threats. And while we believe that there are real concerns that need to be addressed and managed, there are tremendous opportunities and unrealized potential here at home. Relatively speaking, the Glebe is a strong area with tremendous assets.

IMG_7067What’s great about the Glebe

The Glebe is as retail-ready as any neighbourhood. We have a great location and setting as well as a loyal and captive customer base. It’s safe, attractive and interesting. There exists a healthy mix of businesses that cater to a variety of important audinces. Events throughout the year are a constant draw for all kinds of people and our proximity to the heart of the city brings added convenience. Challenges aside, the research shows that we’re well positioned in the marketplace and that patrons enjoy being here; the Glebe offers an experience. And where there are customers, there are businesses.

The BIA’s role

What can we do as a business improvement area to address things? In simple terms, put feet on the street and strengthen reputation. More pedestrian traffic means more customers and these patrons support our local merchants, attract new businesses and draw even more people. Extensive research done by Environics in 2016 indicated that approximately half our business comes from our primary trade area, a two-km radius around the Glebe. Roughly 40 per cent of our commercial activity can be attributed to the wider city with the remaining 10 per cent coming from visitors to Ottawa. To this end, last year the Glebe BIA launched its largest marketing campaign, which resulted in more than 13 million online impressions. Promoting our Glebe businesses is essential to building a renewed awareness of the area. Showcasing what’s here builds brand awareness, attracts people, encourages more visits and longer stays and promotes increased spending.

What the Environics research also highlighted was our position in the city as a leisure destination. A survey to more than 500 households throughout Ottawa indicated that we are the top-of-mind destination for shopping, dining and entertainment, tied with downtown. Other areas we might normally think of as our closest competitors ranked lower. This fact alone distinguishes us as a desirable location in which to locate and operate a business.

In recent years, The Glebe BIA has created and strengthened a suite of signature programs to enhance the Glebe experience. This includes Marvest, a celebration of local musical talent that turns our local businesses (including vacant spaces) into unconventional venues. After its first year, the event received an Ottawa Tourism award nomination. Snowmania was developed as a tie-in to Winterlude, with the aim of encouraging people to use the Glebe as a launching point for the winter festival. In May, we launched the first edition of Canadian Eats, a food celebration to help build new profile for the eateries and food purveyors in the area. It provided audiences with the opportunity to explore national cuisine and discover Canada on a plate through the eyes and taste buds of our talented local food lovers. Our best-known promotion, the Glebe Spree, continues to grow; 2016 was our most successful ever with more than 19,000 entries.

A new state-of-the-art online presence was designed to showcase the area, capture the Glebe experience and support marketing efforts. If it’s happening here, it’s at www.intheglebe.ca. We continue to generate new content daily that tells the Glebe story and features its many great businesses. The site’s content is self-generating with customizable merchant pages and a promotions section that highlights specials and incentives. We proactively engage people and work hard to keep them connected to the area in meaningful ways.

A business attraction package was developed to make a compelling case for why the Glebe is an ideal commercial location. For those interested in storefront or office space, this tool outlines key pieces of information and research, and lays out the neighbourhood’s many features, advantages and benefits conducive to a successful business operation. The guide is available to property owners, brokers, leasing agents and our local business community to entice potential new enterprises.

Glebe is in good shape

IMG_7072One vacancy is one too many, but we hope that this article has achieved three simple goals. First, to demonstrate that while empty spaces exist, the problem is not an alarming one, and it’s not a Glebe-specific phenomenon. Overall, we’re in pretty good shape. Second, that we are proactively addressing vacancies in a strategic and multi-faceted way, one that makes a case for locating here while attracting the critical mass necessary for sustained success. And third, the Glebe is without question, extremely well positioned in the marketplace with real and tangible opportunity and potential. We know, for example, that traffic is up overall, e.g. Lansdowne alone saw a 40 per cent increase in 2016 from the year before.

Like any traditional downtown main street, we need to constantly adapt and evolve to thrive. But we also need to call upon our governments at all levels to look more closely at how policies can make running a business too risky or unworkable. After all, it’s the small businesses that contribute largely to the wellbeing of our communities. In Canada, 97.9 per cent of businesses are considered small, but they account for 70 per cent of the labour force and more than two-thirds of new jobs. An average of 130,000 new small businesses are created annually, but only 35 per cent survive five years. A little support could go a long way.

Ultimately, what makes the Glebe is the people – those who live here. You are our best customers, our greatest champions and our most valuable asset. It is the local community that gives this place its authentic village feel, its character and its charm, all qualities that go a long way to attracting businesses that will fill those vacant spaces. We depend on your ongoing support and appreciate your feedback and concern. Your input is vital to our success and being a part of such a special community is both rewarding and a joy.

Andrew Peck is executive director of the Glebe BIA (Business Improvement Area).

 

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