Small Businesses

During my 6 years on the board of the Beach BIA I watched our small businesses struggle, and the problem is across the city, with more and more empty storefronts on main streets becoming an increasingly depressing sight.  High rents are partly to blame, but also competition from big box stores and shifting consumer habits, especially the advent of online shopping.  If we do not find more ways to encourage local shopping we may forever lose all the unique small businesses that make our city an interesting place to shop and live.

Empty Storefronts and a Commercial Vacancy Tax

The eyesore of empty storefronts is an ongoing and increasing problem across the city, Queen St E in the Beaches being a prime example. It makes the streetscape look unattractive and derelict and only drags down the experience of walking what should be a lovely neighbourhood.

I have been asked many times why they are left empty and it’s because the owners of these buildings are waiting to sell to a developer, or already have and the building is waiting to be redeveloped. Often the owner has owned the building outright for years, so there is no mortgage, and with residential units above the commercial space the building still earns income. It’s much easier to temporarily relocate residential tenants when the time to redevelop has come, but commercial tenants typically have leases 3-5 years long (or longer for larger spaces), and if the landlord wants to break that lease they must buy it out. So in order to not have to deal with buying anyone out while waiting to redevelop they leave the space empty. This is what’s happening on Queen St e between Lee Ave and Wheeler Ave.

We all know there are bylaws about keeping your lawn too long or full of weeds, but there is no equivalent for empty storefronts.  We need to create a minimum standard that does not allow facades to appear crumbling and derelict, forces building owners to sweep away trash that has collected, and requires a more presentable window covering than craft paper or newsprint.  Perhaps it should even go so far as to require old signs and obsolete awnings to be covered in some way until a new business moves in.

Even if empty storefronts are kept aesthetically pleasing, it’s still a waste of commercial space sitting empty and makes for a less diverse main street. We have a tax on vacant residential units, we should have a tax on vacant commercial units. And if landlords don’t wish to sign a 3-5 year lease, they can run popups, and residents would be exposed to an ongoing variety of new and unique businesses.

Lastly, and this was something I tried to push at the BIA as part of our former Great Tenants Committee, we should have a database of all local commercial property vacancies for prospective business owners.

Surveying of Residents and Businesses

If we want retail strips that truly serve the community and thrive, we need to ensure they are filled with the kind of businesses residents want to see.  With surveying of shoppers we can identify these gaps and encourage certain desired businesses to fill them. Combine that with the commercial vacancy database mentioned above and you can bring together customers and the businesses they desire.

We should also be doing regular surveying of businesses, to understand their common challenges and to discover what makes them successful, what events they would like to see, and what actions we can take to support them more. This was something I pushed hard at the Beach BIA but after years of trying I realized they had no interest in hearing what the members had to say. The board in those days (hopefully it’s changed) was quite insular and not open to outside input.

Parking

There are a few ways we can level the playing field and make shopping at our small businesses more appealing.  One of the biggest issues is parking.  Queen St in the Beach, for example, has had historically higher parking rates for longer hours than the entire area between the DVP and Victoria Park up to Eglinton.  Only recently has some of that improved.  Even though Queen St is full of empty storefronts, compared to Danforth, parking rates on Danforth are 33% cheaper and end three hours earlier.

Parking rates

The city has argued this is because of higher property values on Queen, and claim this does not change the behaviour of shoppers and restaurant goers, but that simply is not true.  Before Leslieville charged parking after 6pm, there were many people who would rather hit a restaurant there because they would rather not pay for parking in the Beach.  We need to unify all parking charges and hours across the main streets of the ward so no area has any unfair advantage over another.

Parking lots

One of the advantages of big box stores is customers not having to pay for parking.  Why would people shop on Queen when they can go to a mall and park for free?  The city needs to find a way to require paid parking in ALL parking lots of a certain size so our big box malls and plazas do not have an unfair advantage.

Parking restrictions

Café TO has been a boon to our struggling restaurants during COVID, and it is great to see it continue and expand.  But there is a disconnect with rush hour parking restrictions.  Before Café TO, Queen St would have no parking on the north side during morning rush hour, and no parking during evening rush hour on the south side.  With Café TO, the purpose of rush hour parking restrictions is lost because the street patios stay there all summer blocking traffic, and yet the parking restrictions remain.  For the duration of Café TO parking restrictions need to be removed on every block that has a street patio.

Additional pay parking

We also need more paid parking in areas that are neither residential nor retail.  If people are going to drive their cars, and all the costly impacts that come with that, we should be collecting money from them everywhere they park.  We already charge parking to come down to Ashbridges Bay Park, but people can park for free all along Coxwell between Eastern and Lakeshore.  We should have parking meters all along that length, and in every parking lot of every park.  If we are serious about getting people out of their cars we need to make driving the car a less appealing option, and new parking revenues can be used to fund better transit.

Leases

One of the first difficulties in starting a small business is negotiating the lease.  Commercial leases are specific to the business and the owner, there is no set template.  And often naïve business owners come in with the best intentions, pour their life savings into a business, just to find they cannot carry the lease.  This is not to say we need rent controls for leases per se, but there should be public information about what to expect in a lease, and even a city service to help aspiring commercial tenants to navigate leases. Leading to that we should be gathering information about all existing leases so business owners, both existing and prospective, know the commercial lease landscape.

Types of leases

One thing that should be standard is the type of lease.  On one end you have a gross lease, where the tenant pays one lump sum and has no idea of the breakdown of various costs the lease covers.  On the other end you have a triple net lease, where the tenant pays the base rent, property taxes, building insurance and utilities, as well as other operating and maintenance costs.  In the former the tenant has no idea how much they might be getting gouged, especially if the landlord’s costs go down (like the lowering of property taxes), whereas in the latter the tenant is fully aware of their costs over and above base rent.

Every lease should be a triple net lease, to ensure transparency and accountability.  There should also be a publicly available commercial lease registry, so prospective tenants can see who is charging what where in the city and tailor their business plan accordingly.

Small Business Property Tax Subclass

The Small Business Property Tax Subclass was a small way for the city to give a break to small businesses.  Except it has some glaring flaws which I pointed out in a deputation to the city.  The first flaw is that the break goes to the owner of the property, not the tenant, there is nothing to stop the owner from pocketing the savings and not passing them on to the tenant, or only passing on part of the savings.  This is one the reasons all leases should be triple net.

The second flaw is how they classify a “small business”.  It is not the business itself that determines this, but rather the size and current value of the building.  So a large corporate chain can be getting the break alongside genuine small businesses.

While it will take more work on the part of the city, we must ensure all businesses receive notification of this change if it applies to their building, measure how many businesses actually received the break and how much of it, and exclude any corporate chain from receiving it.  Otherwise it is not really a small business break, it is a little bonus to landlords and corporate chains.

Buying Out Commercial Spaces

Just as the solution to skyrocketing residential rents is more public housing, the city owning commercial spaces solves the rent issues of businesses.  The city should not be shy about acquiring more commercial buildings as well as residential, that is the only way to ensure affordability and prevent unscrupulous practices.

Ward 19 Business Directory

Currently business directories are in the hands of the local BIA, if there is a BIA, and sometimes they have a directory, sometimes they do not.  And, even when they do have one, it is often not up to date.  I pushed hard for an online business directory during my time with the Beach BIA, and we got one, but now it has been abandoned.  As councillor I would create an online database of all businesses in the ward, available for the public to find their needs among local businesses.

Supporting Queen St. in the Beach

It has been heartbreaking watching Queen St turn into a ghost town with more and more vacant storefronts; it drags the whole retail strip down.  There is no question of all the retail strips in the ward Queen St has the highest number of vacancies that have been vacant the longest.  My time on the Beach BIA has given me many solutions to improve this, and as councillor I would champion the following actions:

  • add more parking spaces.  We have numerous spots where one or two parking spaces can be added to the strip without interfering with the TTC, traffic, or emergency vehicle access
  • review the rush hour parking restrictions and adjust them accordingly.  I fought hard against the increase of rush hour parking restrictions on Queen, even doing my own traffic study to show the city they were not taking into account actual traffic movement or the timing of Kew Beach School and daycares letting out during that time.  They based their timing strictly on streetcar times, not traffic counts, and streetcar times can be skewed for many reasons.  They said they would review this in a few years to see if it made a difference, that was about 6 years ago.
  • eliminate rush hour restrictions on blocks with Café TO patios.  With Café TO the purpose of rush hour parking restrictions is lost because the street patios stay there all summer blocking traffic, and yet the parking restrictions remain.  For the duration of Café TO parking restrictions need to be removed on every block that has a street patio.
  • a business directory for the ward so residents can find what they need and support their local businesses. Right now, for example, there is no business directory for Queen St in the Beach.
  • a lease registry.  It is much harder to understand the business dynamics of our area when there is no transparency.  As councillor I would encourage all businesses renting space to share their leases so other businesses and the public can know what goes on behind the scenes.  Such transparency can lead to accountability when residents know which businesses get a raw deal and which landlords are gouging.