'We are bouncing back,' but Winnipeg's downtown recovery still a work in progress, report suggests

More people visited and moved into Winnipeg's downtown area in 2023, but at the same time, more businesses closed than opened.

A new report says the health of the city centre is improving but more work is needed.

"There's so much happening downtown. There are so many challenges but there are also some really great things happening," Downtown Winnipeg BIZ CEO Kate Fenske told CBC Information Radio host Marcy Markusa on Wednesday.

"I think what the report this morning shows is that downtown is on the right track."

The report, 2023 Downtown Snapshot, was released Wednesday morning by the BIZ to highlight developments during the past year and build an understanding of downtown's current economic landscape.

More than 18,000 people now live downtown, according to the 2021 census, and Fenske said the BIZ expects that to grow by another 2,000 in the next two years, which is a far quicker climb than the previous increase.

StatsCan says 16,000 people lived downtown in 2016, which means it previously took five years for 2,000 more residents to call downtown home.

"There's a lot of residential buildings going up. We are seeing more people come back downtown, which is really exciting," Fenske said.

The number of visitors increased by almost 10 per cent in 2023 compared to 2022, resulting in hotel stays doubling to nearly 60,000 nights booked.

"We're seeing hotels bounce back faster than anticipated and a lot of investment downtown from all levels of government," Fenske said.

On the flip side, 27 businesses closed in 2023 and just 17 opened. But that's an improvement from the previous report, which saw 26 more businesses close than open.

There's still a way to go to return to the pre-pandemic level, but it's the right direction, Fenske said.

"In 2019, we had double the number of businesses opening to closing. When 2020 hit, that trend completely reversed," she said. "We are bouncing back, but it is taking time."

The BIZ's biggest concern is the vacancy rate of ground-floor commercial space, which remains above 30 per cent.

"It is those small shops that make a neighbourhood, that have street-level activity," Fenske said. "So that's where we want to put a big focus: how can we attract more businesses, bring [back] that street life. And what we know is we need more people here … living downtown."

There's plenty of reason for optimism, though, she said, as new life is being breathed into the former Hudson's Bay store and Portage Place, both of which will include residential and affordable housing.

In December, True North Real Estate Development, the real estate arm of the company that owns the Winnipeg Jets, signed a memorandum of understanding with the Southern Chiefs' Organization, which represents 34 Anishinaabe and Dakota First Nations in southern Manitoba.

True North is heading the Portage Place redevelopment, while SCO is behind the transformation of The Bay into Wehwehneh Bahgahkinahgohn, which means "It is visible" in Anishinaabemowin.

The two groups said they want to work together toward "the economic and social revitalization of downtown."

Plans across both projects include a museum, restaurants, an art gallery, office and retail spaces, a health centre, a child-care facility, a seniors centre and a memorial for residential school victims and survivors.

Fenske sees such co-operation as a key to making downtown an economic driver where people live, work, shop and explore.

"We need the business and non-profit communities to continue to work together, and for all levels of government to keep the momentum up to support a thriving downtown in Winnipeg for the long term," she said.

The office vacancy rate in downtown Winnipeg is still a challenge, going from 15.7 per cent in 2022 to 18.3 per cent in 2023, but it's below the national average (19.4 per cent), which is a good signal, Fenske said.

"We're actually doing better than some other cities in our office vacancy, which is a bit of a surprise."

Higher rates were anticipated because new office space has been built, she said.

"We are still seeing more leases signed, so people are coming back [for work], whether it's a hybrid model or whether it's full time. We're starting to see that shift."

Fenske is pleased by the nature of some new businesses shifting into downtown. Of the 27 that opened, three-quarters were retail or drinking and dining establishments — cafés, restaurants and pubs.

And the city's newest sports team, the Canadian Elite Basketball League's Winnipeg Sea Bears, played their inaugural season in 2023, setting multiple league attendance records while attracting 65,609 people over 10 regular-season home games and a home playoff game.

"I think it's really exciting to see … that's what people are coming downtown for. It used to just be about work. Right now we're really seeing that focus on entertainment," Fenske said.