From Huddle
Changing Economy Means New Plan For Old Woolworth’s Site In Saint John
ALEX GRAHAM NEW BRUNSWICK, NEWS, SAINT JOHN 0
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SAINT JOHN — The developer behind the project at the “Old Woolworth’s” says he anticipates adding twenty new residential on top of the 90 already planned for the site.
The lot at the corner of Charlotte St. is being slightly reimagined due to the changing economic realities in Atlantic Canada.
“The Wentworth has given me the confidence that we are doing the right thing on King St.,” says developer Percy Wilbur, referring to another residential project in uptown he wrapped up early this year.
Engineers are drafting plans now to turn the proposed office space floors into residential units instead. The ground floor will stay as retail, with Wilbur seeking a grocery store to be one of the tenants.
For now, The King St. site remains a hole left over from the demolition of the Woolworth’s, as Wilbur strategizes how to proceed with the project.
Instability necessitates changes
Wilbur says the current market conditions made the changes necessary.
“The instability in the marketplace, and supply chains, and inflation, and interest rates are really dangerous waters to try to navigate a project of this magnitude. Even labour is very difficult at this stage,” he says. “It’s the perfect storm.”
That’s why investing in office space no longer made sense.
In its June 2022 Office & Warehouse Market Survey, the Halifax firm Turner Drake and Partners says the office vacancy rate for Saint John increased 2.23 percentage points from 2021, finishing June 2022 at a whopping 21.85 percent.
That’s a higher office vacancy rate than Moncton or Fredericton, although both of those cities are also trending higher. Moncton’s office vacancy rate now sits at 19.84 percent, up from 15.08 percent in 2021, while Fredericton’s vacancy rate sits at 16.81 percent, up from 9.48 percent in 2021.
Most of Atlantic Canada seems to be trending differently than the rest of the country when it comes to the market for office space. While most Canadian cities are still in post-pandemic recovery mode, many have seen improvements in office vacancy rates over the past year.
Colliers Canada, a national real estate research and services company, recently released its National Market Snapshot for Q3, 2022, finding that office vacancy had decreased in over half of its tracked markets.
High office vacancy conditions
“It may be that it is just market specific. There is a lot that goes on, on an individual basis, so if you add a building, that will usually push your vacancy rate up because it takes time to lease it out,” says Alexandra Baird Allen, manager of economic intelligence at Turner Drake and Partners.
She says several Saint John-specific factors have influenced the office vacancy rate in the city.
“Part of that is due to the nature of the economy in Saint John where there’s a lot of owner-occupied office space because one of the biggest employers is Irving.
“There’s also a strong industrial segment there so it’s not as office based an economy.”
She adds that the changing nature of commerce in Saint John, which included successful urban shopping malls in the 60s, 70s and 80s, created a glut of downtown space when many of those stores moved to the suburbs in the 90s.
“The urban malls were no longer viable as malls but the space still exists and the buildings still have life in them, and a lot of them have converted over to offices,” she says.
She cites the recent announcement of Cooke Aquaculture leasing 11,000 square feet in Brunswick Square as an example of this phenomenon.
Baird Allen says that the decision to not move ahead with office space right now at the Old Woolworth’s site, makes sense.
“That seems from a market perspective to be fairly logical, because residential has very low vacancy, so if you are going to build something there’s a need for residential.”
Vibrant communities
Wilbur agrees.
“We’ve got the empty nesters moving back to the city. We’ve got the young professionals living in the uptown core” he says of his residential units. “The only piece of the puzzle we’re missing is young, working families and we’re not going to get them until we have a good school for them to go to. It’s absolutely essential.”
He has a hopeful vision for a vibrant Saint John core and is confident his developments both at King St. and whatever projects lie ahead in the future, can be a part of that.
“With a school you’ll bring that segment of society into the uptown core, and with it you’ll bring things like bike lanes,” he says, envisioning a cycling network that would allow kids to ride their bikes “up to Rockwood park or down to Harbour Passage.”
But for now, navigating the economic headwinds of bringing the King St. project to life, remain at the forefront.
“We hope to make it happen as soon as possible, it’s the biggest priority of my career.”
The project will take two years to build, once construction begins.
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