Are skyrocketing commercial rents crushing a new generation of restaurant innovation?
While we panic about the cost of housing in Vancouver, commercial rents have quietly skyrocketed. Why should you care? Because the economics of your local restaurant depend on them and the bottom line doesn’t look good. Matt O’Grady delves into the troubling numbers.
meet Seán Heather on a snowy Friday two weeks before Christmas in his flagship gastropub, the Irish Heather. It’s 10:30 in the morning and already he says he’s had over a dozen cancellations for dinner because of the weather. Not that he’s worried: “I have 160 seats here,” says the gruff 50-year-old, who insists on doing the interview at the bar, standing up, in the still-unlit room. “We’ll easily do 400 people through the door tonight.”
When he opened the Irish Heather in Gastown two decades ago, success was no sure thing. Heather was born in Toronto but moved to Ireland as atoddler, and had only returned to his mother’s native Canada—this time, to Vancouver—in his early 20s to launch his restaurant career. After managing Benny’s Bagels in Kitsilano for four years, the ambitious Limerickman decided he wanted to open his own place. “I knew everybody in Kits, so it made the most sense for me to open something there. But there was nothing I could afford anywhere in Kits. Ialmost gave up.”
At the last minute, his real estate agent suggested he consider Gastown—then, much more so than now, a haven for drug users and petty crime. “I’d never been to Gastown in the seven or eight years I’d been in Vancouver,” recalls Heather. But he says it reminded him of the streets of Dublin or London, where he’d worked as a dishwasher, and he found agreat lease in the historic Alhambra building—across the road from his current location. He initially built his business on what he now calls the “naive” concept of “serving the perfect pint of Guinness,” but in time the Irish Heather was earning equal acclaim for its food program. (It moved across the road in 2008, when the Alhambra had to undergo seismic upgrading.)
Twenty years after opening the restaurant, he’s the undisputed godfather of Gastown. He, along with wife and business partner Erin, has parlayed that one restaurant into a thriving mini-empire—one that also includes neighbouring Salty Tongue, Shebeen Whiskey House (in the back of the Irish Heather) and Salt Tasting Room, in Blood Alley, within sight of where we’re speaking. While Heather has managed to build a diverse portfolio of restaurants, he wonders what the future is for the area—and the business.
“Our industry—with a few exceptions—is in danger of becoming a bunch of businesses owned by old fogeys and chains. There might be places in Mount Pleasant, places like that, but even there the rents are starting to scream up. Idon’t know where in the downtown core, like Gastown, this kind of opportunity presents itself for young people.”
When he launched the Irish Heather in 1997, he was paying $16 a square foot; it’s now more than double that amount. “I’ve been renewing (my leases) at current market rates. It’s dramatically gone up. But I’ve been able to develop my business to where I can afford those rents. If I were starting out at those rates? Well, I just wouldn’t have done it. I couldn’t have done it.”
The story of Vancouver’s otherworldly real estate market has been told in media around the world in recent years, but only now are we hearing about the trickle-down effect on quotidian cornerstones of the local economy: the gas stations closing to be redeveloped as condos, the garden centres fleeing for greener pastures on the city’s fringes, the restaurateurs pushed east as rents push north.
While Heather laments what’s happening around him, the man who inherited the original site for the Irish Heather—Paul Grunberg, co-owner of L’Abattoir—has a more Darwinian take on the restaurants that will survive in the competitive downtown scene.
“If you want to make more money, you’ve got to go out and work harder. I know that may come across as being insensitive, but from a guy who’s
“I’d never been to Gastown in the seven or eight years I’d been in Vancouver,” recalls Heather.
Seán Heather’s journey from washing dishes in Dublin to running a mini-Gastown empire was not without its bumps, but the industry veteran wonders how new restaurateurs will make a go of it in today’s climate.