The recession has officially hit Oakville, with downtown businesses feeling the pressure the most.
A walk on Lakeshore Rd, shows just how much businesses are feeling the pinch, as most of the buildings are for rent or a closing down sign adorns the buildings as an indicator that an operation is shutting its doors.
Yet a walk through the side corners indicate a different picture; business is slow, but it’s enough to get by.
According to Kathy Tang, owner and chief baking officer of Sweetbites, her business managed to maintain itself through one of the worst winters Oakville has ever seen, yet there was an obvious downturn in business on the downtown strip.
“Most businesses in the area have closed down because of the slower pedestrian traffic, they weren’t getting as much customers as they used to in the past.”
“Their rent was also higher and they weren’t able to meet the demands of the business,” said Tang.
Tang repeats the sentiment that is shared by many; although Oakville is an affluent town, the cost of living combined with rent has finally taken a toll on some business owners.
Although for Tang, business hasn’t changed much as she isn’t located on the main strip but rather on Trafalgar Road; she has still felt the sting of what she describes as a lack of shopping options in the area.
“My rent is quite reasonable because I’m off the main strip, it’s not as astronomically priced as the ones down on Lakeshore. I’m actually in a pretty good position,” says Tang.
Life as a downtown Oakville business owner
As consumers are exploring their options when it comes to shopping in downtown Oakville, the streets reflect the status quo. Roads are empty and many stores are deserted, but does this correctly reflect life as a business owner in Oakville?
According to the Oakville’s Chamber of Commerce website, “Businesses in Oakville currently pay between 2.4 and 3.6 times the tax rate of residential property even though they use less than half the municipal services used by a typical resident and pay for services they don’t even receive.”
In addition, on June. 1, 2014 all small business owners in Oakville will have to adhere to a 7.3 per cent increase in minimum wage. Which means that either owners will have to make adjustments in their business operations or they will simply have to shut down.
With all of this controlling their financial schedules, business owners also have to deal with commercial rent which sometimes includes tax. Unlike many other business expenses, rent is inflexible, as there are different types of leases that tenants are bound to. Some of these leases are:
- Gross Lease: This is where the tenant pays a flat monthly amount. The landlord is responsible for all the expenses of operating a building, including taxes, insurance and repairs. With rising energy costs, many landlords are now including heat and electricity in the gross rent.
- Net Lease: This type of lease requires tenants to pay for some or all of the real estate taxes on a property in addition to the base rent.
- Net-Net Leases: These leases go one step further than the net lease. With base rent and taxes, the tenant also pays for insurance on the space that he is occupying.
- Percentage Leases: This lease is a special arrangement that applies to retailers. In a percentage lease, the tenant pays a fixed rate with the per cent of gross income.
With the different types of leases and the fact that Canadians are still feeling the affliction from the recession; there is no wonder that the businesses on Oakville main strip are finally feeling the pinch.
What’s being done?
According to Mayor Rob Burton in an interview done with Inside Halton, businesses downtown have more competition than they have had in the past. He cites numerous factors that affect the decline in business such as; online shopping and the recent opening of an outlet mall in Halton Hills.
To ensure that the town is armed with the tools to combat competition and to continuously draw investment to the area, two studies have been launched by the Town of Oakville’s Economic Development department; the Downtown Cultural Hub and the Downtown Transportation and Streetscape study.
These studies are being designed to give downtown a face-lift whilst ensuring that downtown continues to be a place for everyone.
According to Downtown Oakville Business Improvement Area (BIA) Executive Director Sharlene Plewman, there are ongoing efforts to make downtown Oakville an appealing scene.
“There’s a continued focus to make downtown Oakville an inviting place both for customers and businesses alike, alongside an ongoing awareness program to ensure that people can easily learn about the diversity and inclusive mix of retail, cuisine, service and cultural options downtown.”
“We also continue to grow our partnerships with those who share the same goal of maintaining our vibrant downtown, including property owners, managers, residents and outside business,” says Plewman.
Whilst Plewman was careful not to leak any initiatives that may presently be in the making, she hinted that pending initiatives are being designed to enhance the customers’s experience.
View Downtown Oakville BIA Business Directory in a larger map
Commercial lease information was found at Canada Business.