This is in today's Star-Phoenix
Downtown:The lights are much brighter there
Murray Lyons, The StarPhoenix
Published: Friday, February 16, 2007
Last summer at the outdoor farmer's market, I observed a sincere young father pushing a child in a stroller. The dad was trying to get people to sign a petition opposing the new Wal-Mart store at Stonegate. The timing seemed strange because city council had already approved Stonegate zoning and the grading of the land had started. The Saskatoon Farmers Market is a great venue for a political discussion, should the mood strike you on a Saturday morning, but the talk last year was not just about whether big box stores and big box shopping centres were bad for the health of cities. Rather, the not so subtle undertone of the question posted by the highly polemic SHEEP group was 'How much do you hate Wal-Mart?'
More than six months after that doomed lobby campaign, Stonegate Wal-Mart is now open. The early verdict: more stuff and wider aisles than you've ever seen in a Wal-Mart.
MIDTOWN PLAZA A FAVOURED LOCATION
Coincidentally last month, new retail venues were opening on Broadway and downtown, those being the successful, locally-owned businesses, Outter Limits and the Saskatoon franchise of Lululemon Athletica. Both stores have a big following among people who are unlikely to have their fashion sense defined by Wal-Mart. Indeed, it's not like Wal-Mart even carries $250 lightweight, moisture-wicking jackets or $140 yoga workout combinations.
In the past month, the two leading commercial real estate brokerages in the city, ICR and Colliers-McClocklin, have both put out marketing presentations which show virtually no space available on Broadway and hardly any available downtown.
Rents on the prime two blocks of 21st Street (from First Avenue to Third) are about 25 per cent higher than what retailers pay in downtown Winnipeg and almost twice what someone setting up downtown in Regina will pay. Now, some might argue that Regina's two big box developments, especially the Victoria Avenue East maze of big box stores, has contributed to the street level retail malaise in downtown Regina. However, the enclosed downtown shopping mall in Regina -- the Cornwall Centre -- was on the skids before the big box trend took the Queen City by storm. Cornwall Centre was recently converted from retail to the federal government offices in Regina, thanks to the political influence of Ralph Goodale.
Meanwhile in downtown Saskatoon, Midtown Plaza remains a favoured retail location with almost no vacancies on either level while street level retail space located within walking distance of Midtown remains in demand. In some cases, locally-owned downtown retailers with unique product offerings may have it over some long-standing international or national chains that are losing their drawing power.
MARKET MALL CONSIDERS TOWER
In the field of apparel, for example, there are some former 'category killers' that are now struggling. Teenagers and young adults may have been thrilled a few years back when Old Navy finally arrived in Saskatoon, but the chain's parent company, Gap Inc., which also runs the higher end Banana Republics, has struggled to maintain sales momentum in the U.S. and is even closing some stores.
The Gap's problems aside, it is more than likely the tenants who will fill the predicted 1.3 million square feet of retail space to be built in Saskatoon in the next few years will almost all be national chains. All that construction on the edge of the city will negatively impact some existing space. But the irony is the impact likely won't be as much in the downtown area as feared by petition pushers. Rather than damage locally-owned stores located in the downtown core or other specialized retail districts such as Broadway, the power centres are hurting the bottom line of real estate investment trusts and other investors who own existing enclosed malls in Saskatoon's suburban centres.
Confederation Mall will need major capital renewal when its Wal-Mart store decamps for the Blairmore Centre further west. Elsewhere,
the new owners of Market Mall have studied redeveloping a section of the property for a residential tower.
With the influx of outside money coming into Saskatoon and driving up property values, local investors who have recently taken a chance on the city's downtown now look like masters of good timing, whether they be Brian Bird buying the Bayside for his combined Ashley Furniture and Konto Furniture store, or more recently, Holiday Inn Express owner Lawrence Rychjohn buying the former Pacific Cinemas. To string together a few badly worn phrases favoured by realtors, it's all about location, location, location and there may never be a better time to buy downtown.
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© The StarPhoenix (Saskatoon) 2007
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