1 in 5 downtown businesses says it’s bad enough to leave: DVBA report

A report on the status of businesses in the downtown core suggests serious challenges—from parking to crime—could prompt some businesses to leave.

“There is a myriad of indicators that downtown Victoria’s economy is healthy,” the Downtown Victoria Business Association (DVBA) annual report said, citing thriving tourism, marine, and tech sectors, and more housing development anticipated. However, almost one in five (19%) business respondents to the membership survey said they were unhappy with what they see downtown.

“It continues to be sort of a tale of two downtowns,” Jeff Bray, DVBA executive director, tells Capital Daily. “There's lots of good stuff happening economically. Notwithstanding that, 20% of businesses gave it a failing grade to do business—that should be alarming.”

When asked to grade the downtown core as a place of business, 28% of business owners gave it a B+; 53% said B, C+, or C; and 19% went with a D or F.

According to the report, the failing grade was fuelled by small- and medium-sized businesses' reliance on locals as customers, a perception that downtown Victoria is becoming a little dodgy—maybe even dull—and an old nemesis: finding parking. The report said two-thirds of downtown business customers come from within the CRD and if those customers don’t want to go downtown, those businesses will feel the pinch.

“Victorians’ belief that downtown is unclean, unsafe, boring, or otherwise not worth visiting, impacts downtown businesses,” the report said. “Additionally, we need people from Sooke to Sidney to be able to easily get into downtown (including by car) and find parking.”

For the third successive survey, downtown businesses ranked drivability as the second-biggest factor affecting their business, with 41% favouring an increase in the number of short-term spots to attract more customers. There are 1,900 on-street parking spaces downtown and an almost equal amount (1,850) slots in city-owned parkades. The average cost to park for an hour was $3.50 last year. In comparison, it was $2.65 in Regina, $2.80 in Kamloops, $5.13 in Vancouver, and $13.30 in Toronto.

But back to the dodginess

Two-thirds (65.9%) of survey respondents said they saw “some” or “significant” increase in the impact street crime is having on their business.

“There's a sense that there's just no consequence for bad behaviors anymore,” Bray tells Capital Daily. “And businesses and their staff are left to deal with it, and they're saying it's not worth it anymore—I don't want my staff placed in jeopardy.”

Bray said the onus is on the province to tighten laws and make more inroads on the homeless, mental health, and addiction issues that comprise a significant chunk of the issue. “I don't want to run a restaurant where I'm at risk of getting a sting operation from provincial liquor licensing because I sold a beer to an 18-year-old kid, while the inspector had to step over two 18-year-olds smoking meth outside my business,” he said. “I mean, that's where the province really has to say ‘this is not working for so many people, we need changes.’”

Bray said there are a host of factors why businesses close, but it doesn’t make any closure less concerning. Just last month, Baggins Shoes announced it would shut its Johnson storefront in October due to “the increasingly challenging landscape faced by retail businesses, coupled with a decline in downtown foot traffic by an estimated 30-50% in recent years” moving most of its business online.

‍ “ Also, you know, who's going to come in and fill that spot?” Bray asks. “And is it going to be another unique, you know, entrepreneurial, creative business person, or is it going to be a Tim Hortons?”

‍ Overall, downtown businesses are doing well

The report said overall, the downtown business core remains healthy, thriving on the diversity of its businesses and beauty. The report said office vacancy increased slightly last year, growing 0.9% over 2022 to 6.9% and that for “the first time in years,” the street front and retail vacancy rate decreased—although also slightly, by 1%—to 9.2%.

The DVBA downplayed the change, because of a modification in the methodology used to tabulate the statistics and the fact the newly renovated Customs House has leased 85% of its vacant retail space. It should be noted retail vacancy was 3.1% and office vacancy was 4.7% before the pandemic

The report said six rental and two condo projects are under construction downtown and it’s anticipated that a record number of units will be completed next year, which would increase the pool of downtown consumers. Last year, 262 condos and 405 rental units were added downtown, along with 15K+ square feet of both office and retail space. However, the report noted that “rental rates continue to rise

further affecting affordability for low-income earners,” which also means even those finding places to live may not have extra cash to spend at local businesses.

Fewer businesses reupped licences

Seventeen per cent fewer businesses did not renew their licences last year compared with 2022, a statistic Bray again downplayed because it covers businesses citywide. Five per cent more new licences were issued, said the DVBA, which represents 1,500 downtown businesses.

When it announced it would be closing most of its brick-and-mortar operations a couple of weeks back, Baggins co-owner Tara Savrtka told CHEK News that although new development has increased the number of downtown residents, her tracking indicates “that isn’t necessarily equating to more people in stores on the ground level.”

Last week, BOHO Tribe, which has sold crystals and gems for more than eight years and has hosted monthly moon circles and spiritual workshops, announced it was shuttering, although why was not immediately made clear.

The Duchess & Duke on Government, West Coast Refill on Store, and Folk casualwear in the Market Square on Pandora are some of the latest independent shops to recently shut down, although a connection to the association's social concerns cannot be clearly made.