A friend recently posted online about a new store opening in Sapperton and was a bit dismayed it is going to be “another pharmacy”.
I share her concern to a degree, because I’ve watched excellent businesses in Sapperton shutter their shops due to a lack of walk-by traffic. Almost all businesses on the sleepy east end of E. Columbia Street are destination businesses such as vacuum repair, a karate dojo, specialized veterinarian surgery, home brewing supplies. There are few reasons to stroll this section with a retail mind now. Recently, the Bloom Bloom Room has rejigged her business to operate out of a warehouse rather than a more expensive retail space, and Cadeaux closed entirely, its signature pink building sold to a team of dermatologists who are, for the time being, holding it. I do frequent quite a few of the businesses in the neighbourhood, but that’s because I would be a customer of theirs no matter where they went. For example, I learn karate at the Hawkes Martial Arts dojo, I buy my home brewing supplies from Curtis at Barley’s Homebrewing.
A few of the people who commented on my friend’s post suggested the City should make rules about what sorts of business can rent empty store fronts, but the truth is, aside from a few regulated types of businesses like gun shops, cannabis dispensaries, childcare spaces, breweries, and apparently arcades that serve alcohol, the City has little jurisdiction over who gets to rent spaces. The main decider is the property owner and they are governed mostly by zoning.
“The extent of the City’s control over types of businesses locating here is via land use regulations and zoning,” said Blair Fryer, Director of Economic Development for the City of New Westminster when I reached out for clarification.
“The business referred to in the Facebook conversation is consistent with the zoning on this street,” he continues. “It is actually not a pharmacy per say but a ‘health service centre’ which, given the significant expansion underway at Royal Columbian Hospital, is not out of place in this area of the City.” For further info on C-3 zoning, including a list of the variety of businesses that could locate in this stretch of E Columbia, check out the City’s website (C-3 zoning info starts on page 16).
Show Me the Money
I also regularly hear that leasing costs are simply too high. But are they? Jolene Foreman, a commercial real estate agent and owner of CPS Realty says the rates are what the market will bear. “Commercial rents are calculated based on several different factors including, but not limited to: local and surrounding market rents, BC Assessment rates, location and use of units. Depending on how the current market is going [currently very HOT], landlords may wish to hold on to units. Thus keeping them vacant, offering to lease at above market rates or offering for short term leases only. This gives the landlords more flexibility and reduces lost opportunity costs should the market continue to rise. For landlords it’s an investment business. In some situations, there may be a cost savings to keep a unit vacant while waiting for the market to rise.”
The Economic Development office at the City agrees. “We hear this too and if we went by the anecdotes rents are ‘too high’ everywhere,” says Fryer. “In fact, New West’s retail lease rates are competitive in the region (see Street Front Lease Rates on page 2 of this Cushman Wakefield report fromQ4 2016). Also, lease rates are set by property owners and while property values across Metro Vancouver are increasing, there are mechanisms in place that municipalities use to ensure business property taxes aren’t increased at a similar rate.”
BC Assessment (BCA) is responsible for determining a property’s assessed value which is used along with the City’s property tax rate for Business Class property to calculate the tax levy for 2017. Each year when the City sets property tax rates, they are restricted to having one tax rate for each property classification – there are nine classifications set by BCA. As part of their annual tax setting process, the City reviews the average market shift in each property class and then adjusts the tax rates to eliminate market changes.
“All municipalities do the same in order to ensure property tax revenues are stable and not subject to market swings,” says Fryer. “It provide a little more certainty for property owners regarding their annual property tax bill. So for 2017, the City reduced its business property tax rate in order to eliminate the average market shift of 12.1%.”
Great Business Ideas That Don’t Happen
One of the businesses I’d like to see in sleepy little Sapperton is a produce store, something like Langley Farmers Market on Kingsway just into Burnaby, or like a Kin’s where the focus is on produce but where you can also grab other essentials like eggs, milk, or tofu. There was a produce place, once, in what is now Royal City Physio (if you’ve ever wondered why their door looks like one of those automatic doors, that’s why!) but again, it comes back to this: there was not enough support to keep that business open. People choose to buy their produce at Save-On, Safeway, Superstore, or Walmart or even through delivery services like Spud.ca. Despite having free parking and decent prices, that produce shop shuttered its doors and a barbeque restaurant/organic shop gave it a go for a few months before the space was converted to the physiotherapy office.
The types of businesses in this neighbourhood aren’t necessarily for me (I haven’t needed physio for years, fortunately, and my pets haven’t needed eye surgery, thank goodness) but these are important parts of the local economy that shouldn’t be overlooked. We’ve all heard the lament of the bridal district in downtown New Westminster, right? All types of business are important in New Westminster, even if you never see yourself patronizing that business. I am never going to buy another wedding dress, but I see the bridal shop value to downtown New West in terms of economic spinoff, for example.
“A dynamic local economy includes a variety of businesses and services that create employment opportunities, provide services and create economic spin-off,” says Fryer.
Kendra Johnston from the Downtown New Westminster Business Improvement Association echoes Fryer’s comments. “We understand how the bridal shops and other destination shopping businesses don’t necessarily serve local community, they do however create plenty of spinoff that supports other businesses locals find more appealing. The destination shopping of Downtown New West’s bridal shops have kept many other businesses going over the years and have been an overall positive in terms of economic development growth for our business community. As the population here grows and demand for other businesses increases, we will see different shops and restaurants open, those that will likely be more appealing to local residents.”
Business *Is* Booming in New West, but Change is Hard
In 2016, there were 609 active home based business licenses and a total of 2701 business licenses attached to a New Westminster street address (i.e. physically located in New West). If you subtract 609 from 2701 that leaves 2092 licensed “brick and mortar businesses” with New Westminster addresses. In a city with a population sitting at around 70,000 with only 15 square kilometres, these numbers seem robust to me. (Thank you to the Economic Development office for providing me the numbers.) They may not be all the businesses I want them to be, but frankly, they’re pretty good and increasing year over year.
So, how can residents advocate for the types of businesses they want to open? One really simple way is to reach out to the businesses you love in other communities (LOOKING AT YOU, SOLLY’S BAGELS) and tell them New West is great and welcoming and needs them. Remind them a few times. Send emails and suggestions to their social media. Talk favourably about them to everyone you know. Encourage others to do the same.
Another way is to join committees. The Economic Development Advisory Committee is a standing committee at the City of New West. Take action and apply to be a member. Join your local residents’ association as well and talk about businesses in the area you live in. Get people talking about it.
“This is a popular topic of discussion at business roundtables we attended with the New Westminster Chamber of Commerce recently,” said Fryer. “New Westminster is a great place to invest and start a business. It’s important that business owners help spread that message to their peers and, in areas that aren’t served by a formal business improvement association, consider organizing together to help shape the future of their business district. As for getting a business started, the economic development section of the city website is good resource. We are constantly updating and adding new information that can provide assistance to entrepreneurs on decisions around where to locate along with local economic trends.”