Retail revitalization in downtown Kitchener? Give it another 2 years, city says

Kitchener's downtown is dealing with a high commercial vacancy rate, and any significant changes in the retail landscape could still be years off. 

In the last four years, Legacy Greens founder Jordan Dolson said her grocery store has gone from a small pop-up shop to a steady business supplying fruits and veggies to people in the downtown core.

"I'm really happy with being here," said Dolson.

Dolson's store is a success story amid the empty storefronts that still dot downtown Kitchener.

Right now, the commercial vacancy rate in downtown Kitchener is just under 10 per cent — lower than it was just a few years ago, but still higher than what's considered a healthy vacancy rate of around three to five per cent.

Cory Bluhm, the city's executive director of economic development, says things will soon change. He expects an increase in downtown condo construction in the years to come will spur development in the retail sector.

"What we're living through right now, in my mind, is the single greatest transformation our downtown has ever experienced," said Bluhm.  

There are currently 10 major high rises under construction and about seven more towers are expected to begin construction in the coming year, Bluhm said.

Five soon-to-be-completed office buildings will also bring more people into the downtown, he said, as will the completion of the Conestoga College Campus at Duke Street and Frederick Street.

"You need to see people living in the core before a lot of retail is supported in the core," said Karl Innanen, managing director for Colliers International in Waterloo region.

Although Innanen had previously predicted the revitalization process would be complete by around 2017, he said the slow pace of construction has meant that it will still be another two years or so before business owners see the benefits of downtown development.

Right now, commercial rent prices in the downtown range from between $12 per square foot to $20 per square foot, Inannen said.

'Destination area' needed

Urban planner Pierre Filion said having employers and condos in the downtown are necessary for retailers to thrive — but that these factors won't create a lively commercial district on their own.

To do that, he said downtown Kitchener needs to become a "destination area."

"It needs to be a place where people from outside of that town will come to carry out some of their activities," said Filion, a professor in the planning school at the University of Waterloo.

"Given the amount of commercial space that there is in downtown Kitchener, there will never be a sufficient number of residents, and there will never be a sufficient number of jobs to to provide business for all the retailing that could fill all that space."

Dolson said many of the spaces currently up for rent in the downtown are too large to be a viable option for many small businesses and that having more small spaces available will help spur the retail sector.

"To sign a lease where it's like 3,000-5,000 square feet? [It's] super intimidating, super expensive and too big of a risk for most small businesses," said Dolson.

"Capital infrastructure improvements to help small businesses I think [are] excellent," she said.

Bluhm said many of the new condo buildings that will soon go up are building mid-size ground floor retail units, and he expects they will draw mid-size businesses in these spaces.

"I think you'll actually see a tendency for more independent businesses in the buildings being built downtown," he said.