Health of downtown Courtenay core 'real complicated'
Keeping downtown Courtenay businesses alive is at the forefront of council's mind, according to Mayor Larry Jangula.
Three downtown businesses closed this week and the topic was discussed at Monday's council meeting. Jangula said all councillors are "united" on the fact that something needs to happen, but added the issue is complex.
"It's a real complicated thing," Jangula told the Record, adding, "we understand that this is really important."
Councillors discussed ideas for economic development, infrastructure, social functions of downtown and economic viability, and City staff were instructed to compile ideas for initiatives in a mini strategic plan.
But what is causing downtown businesses to go out of business?
Blain Douglas, who owned Rickson's Menswear for about 30 years until he retired last year, said it's a combination of things, including online shopping, big box stores, minimum wage increases and property tax increases.
"Since 2006, we saw a 48-per-cent increase in the amount of money we paid in property taxes," said Douglas. "We, as residents, need more and want more, so the City has to provide more. So the cost of the City doing business goes up, so the taxes go up."
Mike Laver, downtown property owner, said taxes on four of his commercial rental properties have gone up between 30 and 51 per cent in five years, with the lowest of the four lots owing $5,737 in 2010 and the highest owing $17,684.
He said the property tax multiplier, which means commercial property taxes are 2.9 times the rate of residential taxes, compounds the increases.
"I don't think residents really understand that we pay three times more than what they pay," he said. "I struggle every day. I have tenants that haven't taken a paycheque out of there for the last year, but they want to try and get into business."
He wrote a letter to the City outlining his concerns for businesses because he said landlords are forced to pass on the tax hikes to tenants.
"Some (businesses) are only making it because the landlords have cut their (base) rent so they won't have an empty building," he said in the letter.
He pointed out that landlords with an empty building still have to pay the taxes; they just aren't receiving any rent money to help pay them.
He wants the property tax multiplier lowered.
However, under the Local Government Act, the property tax multiplier must be the same for all commercial businesses, and Jangula pointed out that if it were lowered, that would mean less tax money from national corporations and the money needs to come from somewhere.
"If we lower their multiplier it means we have to add to the household taxes, and I just can't see that as being a solution," said Jangula. "But on the other hand, leaving it where it is and helping force more of them (downtown businesses) out of business is not the answer either."
Jangula said the City is lobbying the Province to allow one tax rate for the big box stores and one for either 'downtown' businesses or 'small' businesses, both of which would have to be defined.
He added that discussions are expected with the premier's office at some point.
However, Downtown Courtenay Business Improvement Association (DCBIA) president and past owner of The Golfer's Edge, one of the businesses that closed this week, Mark Middleton said the issue is not as simple as higher rents because of higher taxes.
"It's not as simple as reducing the taxes or the multiplier, and it's not as simple as the economy just being so terrible that businesses are tanking because there are some businesses that are doing well," said Middleton.
He said he believes his store closed because golf spending is based on discretionary income and it's one of the first things to be cut when people decide to spend less.
He pointed out that rent is lower in the downtown core than other areas of town, adding that he was approached to lease space at the new Thrifty Foods plaza.
"They're asking between $30 and $40 a square foot, that's a big, big number and it's going to take some national franchise, you know that'll be the Tim Horton's Starbucks, places like that," he said.
He paid between $10 and $12 per square foot for the golf store.
He also said some areas of town have lower rents, and that the rent usually reflects the amount of potential buyer traffic through the area.
He suggested the City spend some of the money it receives from the box stores on improving the downtown core — and making it more than just Fifth Street.
"Fifth Street got all the street lamps and the places to hang the banners, but Fourth and Sixth Street appear like the forgotten cousins," said Middleton.
"Maybe it's time to take some of the money from some of the big box stores that they give the City for amenities and transfer that into revitalizing Fourth and Sixth Street, and actually making our whole downtown core something larger than just Fifth Street."
He also suggests building the controversial pedestrian bridge to increase traffic to the area.
Jangula suggests property owners build 'up' the downtown to make it more financially viable by having store fronts on the bottom and residential suites on the top.
However, Laver said he did that with one of his properties about four years ago and has rented out the residential suites, but not the storefront.
Middleton said that while the he doesn't see an easy solution, he's pleased the issue is receiving serious attention.
"It's nice that we're on the City's radar right now and the City's taking notice," said Middleton. "So I feel like now is the time, you know if anything's going to happen, it's going to happen while it's at the top of mind for them."