Facade grants lose their lustre
Improvements just mean higher rent, Newton business owner says
The city grant was supposed to bring vibrancy.
Instead, four shops in the newly renovated Newton community shopping centre are now vacant, some 30-year-old businesses unable to cope when the cost of rent doubled.
It’s left Newton residents frustrated.
“The only one who benefited was the developer,” said Rak Prasad, president of the Newton Community League.
“I do not support this program. They’re going to increase our taxes; we’re going to give money to private business and they’re going to screw the people they’re supposed to be helping ?”
The matching grants at issue were part of a pilot project to rejuvenate aging strip malls. City council will look at making the grant program permanent in this upcoming fall budget.
In 2016, the tenants in Newton, a community in the east end near Beverly, together contributed $60,000 toward a facade renewal program and took advantage of the city’s market research and business advice.
The landlord also contributed $60,000 and the city paid $120,000 to complete the project, investing to improve a neighbourhood amenity and hopefully see some return in increased tax assessment.
When Postmedia talked with business owners in March 2016, they were bubbling with excitement and planning a grand opening. But as soon as the renovations were finished, the landlord sold the property.
The new landlord raised the rents. Dave Agnihotri was paying $8.50 per square foot for Shelley’s Food Market and gas station, which his family started in 1989. He said he tried to negotiate with the new landlord but couldn’t get a deal even when he offered him $16 per square foot. That was after Agnihotri spent an additional $250,000 upgrading the gas tanks.
“It’s foolish of us. We didn’t think he would treat us that way,” said Agnihotri, saying he was prepared for the rent to increase but not by that much. He said he’s not trying to pick a fight, he just thinks the city needs to do more research before choosing a place to invest. “They have to have some strings attached.”
Bella’s Beauty Products, Donair Pizza Express and Holyk’s Denture Centre are also gone. The denture centre moved into a house a short distance away. The daycare and bowling alley are still there, hoping for the best as they wait to renew their leases.
Council is looking at earmarking another $1.2 million a year for these types of grants, which started in a small way 15 years ago to help rejuvenate storefronts on commercial main streets like 118 Avenue and Whyte Avenue. On those streets, a vacant storefront or broken window can bring a whole block down.
The decision to include neighbourhood strip malls was meant to improve the amenities and social spaces embedded inside many Edmonton neighbourhoods.
Meanwhile, the new landlord said he’ll fill the vacancies shortly. It took one year to upgrade an electrical system in the building so old it no longer had fuses available, said Andrew Barry, head of Calgary-based Barry Developments.
NEW CORNER STORE COMING
Now a new corner store is supposed to open this fall and he’s in talks with a restaurant, too, he said. As for rents, they increased in line with the market, he said. “We think we’re the lowest rental rate in the area.”
The city grant also saw investments in Elmwood, Patricia Heights, Belvedere, Calder and Ritchie.
Ritchie Four Corners went really well because the developers there are committed to strengthening the whole community, said Ward 11 Coun. Mike Nickel.
Mayor Don Iveson said a situation where rents double is concerning but likely beyond the city ’s power to control.
“That ends up being a landlordtenant issue,” he said. “I don’t think the city can reasonably look at putting conditions on the facade improvement grants around tenancy. That’s way beyond our normal jurisdiction.”
The city did not require the tenants to contribute. That would have been a deal they made with the previous landlord, said Lisa Larson, the city’s acting director overseeing the program.
Her team will measure turnover at each site after the pilot project ends in 2019 — city officials still intend to spend money on new sidewalks, bike racks and benches at each location.
In the meantime, city officials offer business owners access to market advice to help them adapt, Larson said.
“We know there is going to be that turnover. We try to support the businesses at these sites as much as we can.”