Between the drawn-out construction of the EglintonCrosstown LRT and the multifaceted damage of Covid, the local businesses of the Upper Village BIA have suffered a great deal.
However, there are other important factors to consider when assessing the vibrancy of the business community in our neighbourhood. Understanding them will help everyone; tenants, landlords, and residents alike, to attract exciting businesses, foster beauty and build a thriving community.
Force #1 - Small Business Cashflow
Protracted LRT construction and COVID have led to a drop in revenues. At the same time, businesses are faced with increasing expenses, such as higher occupancy costs, higher labour costs (and staff shortages), and the rising cost of goods.
A closer look at occupancy costs is warranted. Occupancy costs include rent, property taxes, utilities, insurance, and other costs associated with occupying their store or office. For an average 1,500 square foot storefront on Eglinton, current market base rents are in the mid $30s per square foot (PSF). Add another $20 PSF for taxes, utilities, etc. and you’re at approximately $55.00 PSF or $82,500 per year - in occupancy costs alone. As a benchmark, occupancy costs for a typical small retailer/restaurant should be between 5%-8% of gross revenue. Therefore, a small business on Eglinton would have to generate over $1 million in gross sales to be in the safe zone. I haven’t taken a survey of average revenues in the Upper Village, but with the above-mentioned impact on revenues, I doubt that this threshold is being met. What can we do to help local businesses stay afloat?
Tenants
Firstly, get involved and lean on your local Business Improvement Area (BIA) for support and advice. Also, utilize the available programs and grants that can make a big impact on your cashflow. For example, The CaféTO Property Improvement Program provides incentives to commercial property owners and tenants to improve the appearance and/or functionality of their exterior spaces, which will attract more customers. The Summerlicious/Winterlicious annual food festivals, help restaurants offer an array of lunch and dinner options at a discount, attracting diners during slower times of the year. This year’s Summerlicious offered an easier application process, waived the fees for participating restaurants and gave them more flexibility in setting menu prices. Lastly, Tenants can work with their Landlords to negotiate creative and flexible lease terms to help unload some of the occupancy costs, like applying percentage rent clauses and permitting subleasing or space-sharing arrangements.
Landlords
There is so much more to this than just rent. Landlords must be proactive in applying for and passing down the benefits of any rebates and government programs/subsidies. For example, in November of 2021, Toronto City Council adopted a Small Business PropertyTax Subclass which provides a 15% reduction in the municipal tax rate for eligible small business properties starting in 2022. Typically, tenants cover the landlord’s realty taxes, so any reduction here would help the bottom-line of any business. Other initiatives like energy retrofit and efficiency programs, reduce energy costs for tenants in the long run and help curb their expenses.
Residents
Shop local and try and do so as often as you can. Pre-pay for larger quantities of a local good/service, whether it’s buying a class package at your local gym or pre-paying for 10 pizzas (your typical Sunday night dinner). This extra cash can help smooth out fluctuations in monthly cashflows during slower times. Also, don’t forget the butterfly effect of a positive review or post on social media.
We can all do our part, together as a community, to help small, unique, independent businesses not just to stay here, but to thrive.
Force #2 – The ‘Feel Good’ Factor
Have you ever driven by a busy restaurant with eye-catching lighting, beautiful décor, an inviting patio, and said “wow, that place looks great, we should check it out sometime”? Or maybe you went out of your way to visit a neighbourhood because of its eclectic shopping and safe and pretty streetscape? This is what I mean by the ‘feel good’ factor. You simply feel good being there. I recently felt this way walking around a New York City neighbourhood with blossoming tree-lined streets, warmly lit and uniquely decorated patios, and small public spaces, landscaped with colourful plants and inviting seating. The feel-good factor is a powerful force in attracting new customers and visitors to existing businesses and new desirable businesses to a neighbourhood. What can WE do to create a ‘feel good’ vibe??
Tenants
Dedicate some of your budget to colourful and artistic window displays. Beautiful, well-kept storefronts and patios that are lively during the day and at night will always draw attention and attract patrons to pop in during their commute, or to return. Think about the exponential benefits of social media by installing a creative ‘selfie opp’ on an exterior wall or create a temporary activation in an under utilized space. Think Distillery District, Graffiti Alley, Sugar Beach!
Landlords
Ensure that your storefront façade, including signage, canopy, lighting, is of high quality and properly maintained. A professional sign, exterior lighting, freshly painted and maintained stucco/brick will elevate the look of your building, enhance the tenant’s business and create a great place to be. Programs like The Commercial Façade Improvement Grant Program and the Commercial Space Rehabilitation Grant Program provides funding to commercial property owners and tenants to redesign, renovate or restore facades and undertake interior improvements.
Have a vacancy? No problem. Be proactive and work with the BIA and/or local residents in programming your property with aesthetic hoarding, a temporary interactive window display or a short-term (’pop-up’) tenant. Check out www.thestorefront.com or read about how the Danforth East leased 15 vacant storefronts through their Pop-Up Shop Project. Check out: https://deca.to/pop-up/. This program creates energy and vibrancy in the neighbourhood and helps attract new tenants faster.
Residents
Again, residents need to support local businesses. However, posting a positive review or an amazing photo of a store’s décor or a special dish on social media is a great way to help highlight the neighbourhood, its amenities and service offerings. A polite suggestion or recommendation about how a business can improve is helpful.
Force #3 – Placemaking & Social Purposes
Humans are inherently social, always looking to connect and belong; even more so after COVID. Parks, bike trails, stadiums, restaurants are very busy again. We are drawn to places where people can interact, live, work, and play! How can we capitalize on our existing infrastructure and amenities to create inviting spaces that are well-utilized throughout the week to foster health and well-being.
Tenants
Your local BIA and the City can work in partnership to create a thriving, competitive, and safe business area that attracts clients/shoppers, diners, tourists, and new businesses. Social initiatives like sponsored festivals/markets, community events and interactive public art installations keep the neighbourhood exciting and enhance its social fabric.
Landlords
Property owners need to worry about their own properties by maintaining and maximizing the value of their asset(s). However, your properties do not exist in a vacuum. They are part of a community, and the way you invest in them affects not only the value of your asset, but neighbouring buildings and businesses as well.
Landlords, consider what’s happening around you and the benefits of participating in initiatives that help curate a strategic and diverse mix of retail/services within your commercial district. A busy, vibrant main street offers a healthy mix of desirable retail that generates sales and social interaction throughout the entire day. While residents are away at work and school, businesses can rely on sales from day-time workers, visitors and commuters to keep things bustling. A main street with undesirable services or a saturation of a single offering, such as too many dentists and nail salons etc. squashes the variety that attracts customers.
Residents
Resident or community groups are invested in their neighbourhood. Active and organized associations can help bring the community together through social events and festivals. They can funnel public and private funds back into the community through beautification or capital enhancement projects that draw people to the community and promote social interaction.
It takes a village to preserve unique and eclectic businesses and create safe and vibrant neighbourhoods. Landlords, business owners and residents all can all play a part in creating a vibrant community for everyone to enjoy.
No items found.
