BOOM AND BUST
The fortunes of Montreal’s merchants are playing out in real time on city streets. René Bruemmer takes a closer look at what’s at stake for local businesses in this municipal election.
In the revival of Verdun’s Wellington St. and the barren restaurants of Bishop St. downtown, the two extremes of Montreal’s commercial sector are playing out live.
The former is abuzz after decades of decline, bolstered by an influx of families, community collaboration, government investment and entrepreneurial innovation.
A few kilometres away, next door to Concordia University and up the block from the tourists streaming by on Ste-Catherine St. W., Bishop St. merchants are on the verge of collapse, victims to infrastructure work that has virtually walled off their businesses since 2016 and is expected to continue for another two and a half years.
After 13 years in operation, the once-bustling Mesa 14 Mexican restaurant will likely have to close one year after the construction work began, co-owner Michael Cloghesy predicts. He estimates he’s lost $70,000 in the first half of 2017. He pays a premium $36,000 annually in municipal taxes because of his high-traffic location, but now neither drivers nor pedestrians can see his restaurant.
“The construction project (managed by the Société de transport de Montréal for a métro ventilation station) is going to cost $24 million,” he said. “With all that money, we think they could have been able to find some funding to keep our businesses alive.”
In Montreal, the success of many merchants is dictated by the vitality of the commercial artery on which they reside, noted Jacques Nantel, professor emeritus in the department of marketing with HEC Montréal, specializing in retail commerce.
“There are some that have discovered and properly exploited the notion of local businesses,” he said, referencing successful streets like Wellington St., where the vacancy rate for ground-floor businesses has gone from 15 per cent in 2009 to roughly three per cent now. Fleury St. in Ahuntsic and Décarie Blvd. in St-Laurent are other examples of well-run, vibrant commercial arteries that consistently draw local residents.
Then you have St-Denis St., which traverses the most densely populated region in Canada, yet has suffered an abundance of empty storefronts for years. The street is a victim to both the types of establishments that exist there — upper-scale “destination stores” that once drew shoppers from the suburbs but no longer do — and high property taxes, Nantel said. Those high taxes have led to a dearth of local shops and services like bakeries, dépanneurs, daycares and shoe repair stores that a crowded urban neighbourhood craves. Extensive road and watermain reconstruction that ended last year exacerbated the pain, raising the vacancy rate to 27 per cent, although the local business development group says it has since dropped to 15 per cent.
“People think the main challenge for merchants in Plateau Mont-Royal is difficulty using a car,” Nantel said. “That’s false. It’s a lack of measures that favour establishing local stores.”
Local commerce and families exist in a symbiotic relationship: each needs the other to thrive, Nantel said. If one is ailing, so will the other, along with the neighbourhood in which they exist.
He suggests the city recalibrate the way it taxes non-residential properties, taking into account what merchants can expect to earn per square foot depending on where they’re located. A strong merchants association can also play a major role, he said.
In Verdun, the resurgence of Wellington St. is due in part to an influx of young families seeking affordable housing in a neighbourhood 20 minutes from downtown. A growing trend among the younger set toward dining out didn’t hurt, said Billy Walsh, director of the Societé de Développement Commercial Wellington created in 1997 and now representing 250 merchants. Nor did the recent abolition of a ban on liquor sales. Most important of all was that the community got involved, Walsh said.
“Merchants talked a lot, exchanged ideas with the community, so people started to relate to what we were doing,” he said. “People came to the street, they loved the street and they became ambassadors for what we’re doing.”
City initiatives like creating a beach and the $26-million restoration of the 4,100-seat Verdun Auditorium as a sports and concert venue inspire confidence that the neighbourhood’s renaissance will continue. The borough has chipped in by doing things like shopping locally, having its maintenance department buy its brooms from the local hardware store, for instance.
Snow clearing, graffiti, street cleanliness and high tax rates are merchants’ main concerns, Walsh said.
Cristel Henssen, owner of the Fromagerie Copette & Cie on Wellington St., said there has been a definite upsurge in business compared to when she and her husband opened nine years ago, thanks to events organized by the merchants association, including puppet and sugaring off festivals and dance evenings that brought foot traffic and attention.
“At the start it was difficult because there were fewer stores here, so few people came out to visit,” she said. “Now people are more curious to see what is happening on the street. It draws people.”
Taxes are high, however, and continue to rise. Henssen would like Montreal to institute different levels of taxation based on the type of commerce, as opposed to basing rates solely on square footage.
On St-Laurent Blvd., things have also improved, thanks largely to extra cash from the city’s parkingmeter fund that doubled the merchants association’s annual budget of $570,000 last year. The money went toward hiring extra street cleaners, promoting the 11-day summer Mural Festival, funding a lighting project to string bulbs over the boulevard and greening the street with flower boxes. The vacancy rate has dropped from 13 per cent in 2013 to seven per cent today, the merchants association said.
“Things are definitely looking up compared to four years ago,” said Tasha Morizio, general manager of the Société de développement du boulevard Saint-Laurent, adding that tourism was “off the hook this summer.”
In her experience, both the city of Montreal and the borough of Plateau-Mont-Royal have tried to help.
“That’s the key here — we all need to work together and come up with solutions,” she said.
Issues remain, however, including the number of dilapidated, vacant buildings some owners are unwilling or can’t afford to fix, high prices for terrasses and tax rates that can rival the amount merchants pay in rent.
Montreal’s non-residential property tax rates are the highest of any major city in the country, according to statistics released this week by real estate research firm Altus Group.
As the owner of the Intermarché Boyer grocery store and the Bleu et Persillé cheese shop on MontRoyal Ave. in Plateau-Mont-Royal, Franck Henot employs more than 100 people, providing salaries of $3 million annually in the neighbourhood. He also pays more than $100,000 a year in property taxes, but says he sees little longterm vision from the city of Montreal on how to aid smaller-scale merchants coping with a rapidly evolving marketplace and online competition. High taxes, no regulations to impede property owners from drastically hiking the cost of commercial leases and delays in obtaining construction permits all hamper the prospects of small retailers, he said.
“If we want to preserve local retail merchants and the life of local neighbourhoods, if we want to keep people in Montreal, if we want people to spend in Montreal and to move there and have pleasure in shopping there and see the businesses flourish, we have to give them the means and give a vision,” Henot said. He suggests giving new merchants a 50 per cent tax break in their first three years to let them get established and appointing a minister of retail commerce for Montreal to work full time on the issue.
“My biggest hope is for people to sit and talk about what we want to do in the next five, 10, 15 years, where do we want to go. And that just isn’t happening.”
On Bishop St., merchants say they were doomed by mismanagement and an utter lack of communication from authorities. They were told of construction plans only two months before work began, while members of the Crescent St. merchants association, local museum board and Tourism Montreal were informed at least six months prior.
Three weeks ago, the city had a group paint the Bishop St. sidewalks in bright colours in an attempt to lure customers. But they did it on a Friday evening, blocking access to their restaurants on the busiest night of the week. The merchants are fighting their case in court, but the legal motions are moving slowly.
Both incumbent mayor Denis Coderre and Projet Montréal leader and mayoral candidate Valérie Plante are promising aid for merchants, particularly those suffering construction-related woes, by using new legislation under Montreal’s recently bestowed metropolitan status that allows it to grant subsidies to storeowners.
That’s good news for the future, said Michael Cloghesy of Mesa 14 on Bishop St.
“But for us, unfortunately, I think it’s too late.”