High commercial rents stripping Queen Street West of its 'heart,' merchants warn
Queen Street West BIA says 40 storefronts are closed, thanks in part to rent and property tax increases
Terry Ham bustles around his Queen Street West salon, Good Hearts Salon & Spa, with a wide grin as the music blares, even though just months ago he was locked out of his other storefront a block away.
The 58-year-old small business owner had three locations, but his spot at 534 Queen St. W. was his biggest, and best situated — smack dab in the middle of Bathurst Street and Spadina Avenue.
When it opened in 2010, rent was around $8,000 a month, but by the time he was evicted in October 2016 for failing to pay rent, he says it had jumped to about $14,000 a month.
"It's a big punch in the gut, or maybe lower," he said. "It just continued to creep and eventually you start looking at what money you're making verse what money you're paying."
He said the 2016 summer construction season on Queen Street West didn't help, but in the end he says it was the rent and property tax increases that left him no choice but to abandon his operation at 534 Queen St. W. and focus on his remaining salons at 697 Queen St. W. and 789 King St. W.
Ham doesn't know what will replace his salon, but he points to a number of chain restaurants and clothing stores filling in the vacancies along Queen Street West.
"It takes away the heart, the culture of the city," he said. "It gets rid of the small entrepreneur, who was like the blood of Queen Street."
Last month the Queen Street West BIA took an inventory cataloguing 40 vacant storefronts in its catchment along Queen Street West from University Avenue to Bathurst Street:
- Four storefronts with construction boarding.
- Eight small and medium storefronts for lease.
- Five big storefronts for lease.
- 16 empty storefronts with no lease sign.
- Two empty lots with fire damage.
- Five storefronts opening soon.
In the past three years, the BIA says more than 130 businesses have closed, and while many of those have re-opened with new businesses, the association says the vacancy rate is higher than ever.
The chair of the Queen Street West BIA, Shamez Amlani, worries the shuttered storefronts with newsprint plastered on the windows are giving the once iconic neighbourhood a sense of "dereliction."
"If the few landlords who have deep, deep pockets and own multiple properties don't have incentive to rent them out, the street suffers because then we lose cultural institutions in our city that give our street and our city the character that it has," said Amlani.
For example, a Taco Bell is under construction to replace The Hideout, a live music venue that used to be at 484 Queen St. W.
Owner Jimmy Good said the landlord didn't give him a chance to renew his lease, but turned around and rented it out to Taco Bell for doublethe rent. The Hideout has now relocated to College Street.
Chain stores 'parasitic' to Queen Street West
For a decade, Spencer Sutherland has run Nocturne, a live music nightclub at 550 Queen St. W.
His rent has gone up five per cent a year for the past eight years, but now he says his landlord wants 25 per cent increases for the next five years and worries his venue may be the next to close.
"We're OK for the moment but I think anyone in this neighbourhood is just taking it year-by-year ..," Sutherland said.
He worries because there is no limit for rent increases on commercial properties, only big chain retailers will be able to afford the neighbourhood's rent.
"It's parasitic to the neighbourhood," Sutherland said. "Instead of getting a neighbourhood where people want to come out ... you're losing its uniqueness ... I think it's bad for business over the long term."
'Lingering vacancies' city-wide problem
Neighbourhoods from Ossington to the Danforth are struggling too, said John Kiru, the executive director of the Toronto Association of Business Improvement Areas.
He said 2017 is shaping up to be among the worst for shuttered storefronts.
"We are seeing more vacancies than I've seen in years in neighbourhoods all over, and they are not turning over as quickly as we used to see, so they are lingering vacancies," he said.
Kiru said there are other factors at play like online shopping, but the predominant factor is taxation and rent.
For example, he said the Ontario government's business education tax rate is the highest in Toronto; 30 per cent higher than Halton Region and 20 per cent higher than York Region.
Plus, he says business property taxes are assessed on a four-year cycle and the 2016 assessment in effect for 2017 is crippling for some businesses, because the methodology is based on the highest amount of money the property could sell for.
"That's making it unsustainable for some of the businesses out there," he said.