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Sterling Wood and Dawn Partridge-Wood are closing their home decor business, About The House, 634 Yates St., at the end of this month. The couple say a stagnant economic outlook and high overhead costs forced them to make the practical decision. “It was a labour of love,” Partridge-Wood says. “It’s sad.”
Downtown Victoria’s commercial district appears years away from healthy recovery
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awn Partridge-Wood was full of optimism in the days before opening her dream business in the heart of downtown
Victoria. She and her partner, Sterling Wood, had just finalized their business plan and were eager to fill their new storefront window with delicate metal sculptures, antique shelving and unique home decor accents. “When we were starting the business and we talked to the bank, they more or less were saying, ‘We’re at the bottom now. There’s Daniel Palmer nowhere to go but up,’” Reporting Sterling-Wood says. “That’s what other retailers were saying, too,” adds Wood. “And it never went up.” Those happy days three years ago are now just a fading memory, as About The House becomes yet another small business in the downtown core to fall victim to a stagnant economic recovery. The easy answers are that the couple
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simply chose the wrong location, opening an interior design shop on a worn-out strip in the 600-block of Yates St., and that consumers haven’t yet returned to spending over saving. The Woods’ story is all too familiar across downtown, as many retailers are faced with either renewing their lease at rising rates or packing it in. At the end of 2012, retail vacancy rates in the downtown core sat at 7.1 per cent, a far cry from the 2.9-percent rate seen in 2008. About one in 12 downtown office spaces are also empty, leaving a multitude of “For Lease” signs to collect dust on brick facades and in prominent shop windows. “I don’t know how they afford to let so many properties stay vacant,” Sterling-Wood says. “The thing we don’t know about the rent is whether it’s just greed on behalf of the landlords or whether the
(property) taxes are just grossly higher to explain why the rent is sticking so high,” Wood says. City of Victoria property tax rates are about three times higher for commercial properties than for residential properties of the same size, a disproportionate balance that comes down to a philosophical argument debated around council tables for decades, says Coun. Geoff Young, an economist by trade. “There are some councils that have blithely increased the rates on commercial property in order to keep residential rates down, and really harmed the future in order to prevent immediate pain,” he says. Slick new retail space outside Victoria isn’t something council can control, but Young believes the city can help by improving rapid transit and continuing to “chip away” at property tax rates.
“My private business occupies rental space in the downtown and we pay taxes as a component of rent. It’s a very significant part of total occupancy cost. So that is one of the main factors that we’re conscious of and are trying to affect by keeping our rate of budget growth down.” Commercial spaces tend to sit empty for months because landlords are justifiably cautious about who they’re allowing to use the space, Young says. “It’s not quite like the residential rental market in the sense that people are prepared to move in for short periods of time and with short notice. With retail tenants and restaurants, it’s very expensive to move in and you want someone who’s going to be there for a long time.”
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