Royal Bank the latest retailer to leave 'Richmond Low'

Another big-name retail tenant has left the area near Dundas and Richmond in London's downtown core.

Last week, people lined up during lunch hour to use the bank machines at Royal Bank's branch at 383 Richmond St. By Monday, those machines were removed, with sheets of plywood in their place. 

The bank's move was announced last fall, with the opening of a new branch at Talbot Centre at 142 Fullarton St.  

It follows last month's announcement that McDonald's is leaving Market Tower and last year's departure of Rexall pharmacy from the northeast corner of Dundas and Richmond. 

Is this just part of the regular retail turnover that downtowns go through, or does it point to a larger problem? 

"Everybody's pulling out," said Peter Young, who owns Organic Traveller. The retail store sells marijuana pipes, rolling papers and other products. He's been doing business on Richmond, south of Dundas, for the past 25 years. 

"If McDonald's can't make it in downtown London, we know something is wrong," he said. 

Young calls the stretch of Richmond south of Queens "Richmond Low" — a place he says struggles compared to Richmond Row further north.

"It's kind of a ghost town now," he said. "They're spending all this money on Dundas Street ... and these stores are still pulling out." 

He's referring, of course, to the ongoing project to turn Dundas Street into Dundas Place. 

The city is in the second stage of a $15.6-million, two-year project to transform Dundas into a flex street. The bulk of the work will upgrade decades-old infrastructure below the ground but the revamp will also bring enhancements to beautify the streetscape and make it possible to pedestrianize it for special events. 

Many retailers have told CBC News the Dundas Place project is pinching their bottom line, with the street closed to car traffic for months while metal fencing surrounds the storefronts.

The first stage of the project wrapped up late last year. This spring, crowds came to the now-completed section of Dundas Street west of Richmond to watch two Toronto Raptors playoff games on the the big screen. 

The second and final stage of the project — between Richmond and Wellington — isn't scheduled to be finished until late fall. 

Gerald Gallacher, board chair for Downtown London, agrees that construction has hurt some retailers but says businesses move for a host of reasons. 

"There's not one big silver bullet that's cause all of this," he said. "It's a lot of little things that have compounded. Even some of the malls are struggling to keep retailers with the costs of rent."

The State of Downtown report released last year pointed to a recent decrease in retail vacancies for the downtown core. Between 2000 and 2007 the vacancy rate was between 11 and 18 per cent. In 2016 and 2017, it was 7.2 per cent and 7.0 per cent, respectively. The same report says a "healthy" vacancy rate is considered to be between five and nine per cent. 

All three of the now-departed tenants — Rexall, RBC and McDonald's — operated out of buildings owned by Shmuel Farhi, who owns numerous downtown properties. Calls placed to his downtown office for comment were not returned on Monday. 

Gallacher said he believes business will pick up when the work on Dundas is done. He expects to see many of the empty storefronts filled, and says some merchants might be waiting until the last cobble stone is laid before entering a new lease.

"I'm hoping when the construction work gets done, it will be a bright, vibrant place," he said. "It is a space that will attract people and the more it gets used, the better."