King Street & Catharine Street - Hamilton, ON
BLOCK REPORT ROUND #2: NOVEMBER 2020
This report was prepared during the months of October and November 2020 based on conversations with the Downtown Hamilton Business Improvement Area (BIA) and local business owners, a business survey and a variety of other data sources. It provides an update to the Round #1 Block Report produced in July 2020.
Summary
Pre-COVID, this block in Downtown Hamilton, was filled with daytime office workers, young professionals from a nearby co-working spot and international school students.
The block has 66 business, which includes a mix of food services, restaurants, and professional and general services; 78% of the businesses are independently owned.
There has been only 1 new vacancy on this block since the pandemic started; however, 85% of the businesses surveyed are operating with reduced revenues.
Graffiti, vandalism, panhandling and other negative behaviours have increased dramatically on this block since the pandemic, according to local reports. These changes are contributing to a perception that the downtown is unsafe.
Many services and facilities tailored to those experiencing homelessness, addiction and mental health challenges, which are located downtown, have had their service delivery disrupted, limited, or closed due to COVID restrictions, and have not had the resources to keep up with growing community need. This has put additional strain on these individuals and has also impacted the way they gather in the downtown.
There is a sense that more people from the surrounding neighbourhoods visited this block over this summer, compared to previous years, and that people were making an effort to support local businesses; 33% of businesses said that they were positively impacted by more customers from the local neighbourhood.
Business Survey Highlights
We conducted a survey of local businesses on this block to better understand the impacts of COVID on businesses and the street. Here is what we learned:
33% said business was booming pre-COVID. of businesses; 67% said that business was going ok
33% of businesses expect to be closed down in 3-4 months if there are increased restrictions due to a second wave
83% of businesses had decreased revenues compared to this time last year
83% of businesses would like to see improved/expanded relief measures for business cash flow (e.g. CEBA, wage subsidy)
This Block During COVID-19
Key Impacts:
There have been almost 500,000 fewer visits to this block from April to September 2020, compared to the same time period in 2019 (a 55% decrease).
Early in the pandemic, the main office building on this block was being used by less than 10% of its pre-COVID daytime population. Over the summer, office workers increased to around 15%. The reduction in office workers continues to have a major impact on the surrounding local businesses and the block overall, as a result of lower foot traffic.
Safety continues to be a major concern on this block. Because of growing need facing vulnerable populations and COVID restrictions that have created challenges for social service organizations, the city of Hamilton has seen a spike in tent encampments, including ones in the downtown.
Graffiti, vandalism, panhandling and other negative behaviours have increased, according to local reports. These changes are contributing to a perception that the downtown is unsafe.
The lack of public facilities such as washrooms which are typically used by the street-involved population, is a major issue that affects those people without adequate facilities, as well as the surrounding businesses.
Bright Spots:
Several businesses that closed temporarily have reopened. For example, the Leather store, which was closed up until June, reopened during the summer and has seen reasonable sales increases.
Many businesses reported faring “better than expected” over the summer. Businesses owners have been finding ways to adapt their operations to meet the new realities on COVID-19.
Businesses reported seeing more people from the surrounding neighbourhoods on this block over this summer, compared to previous years. There was a sense that people wanted to support local businesses; 33% of businesses said that they were positively impacted by more customers from the local neighbourhood.
Construction workers working on new residential buildings on or near this block continued to bring foot traffic over the summer.
There are several local landlords who own multiple properties on this block. They were more flexible with rent payments and invested in the long-term success of the downtown compared to landlords from large companies.
What’s Next:
Another lockdown will be challenging for the businesses on this block; 50% of businesses said that if there were increased restrictions, they would either be closed down or have permanently scaled down operations.
There is a lot of optimism for the new government rent subsidy program, as rent continues to be a major concern for businesses on this block.
Asking rents in this neighbourhood increased 23% from June 2020 to September. However, market rents increased by only 3%. This suggests that the new development in Downtown Hamilton is causing upward pressure on rents.
Anecdotally, it was reported that some landlords were considering trying out shorter lease terms and lowering rent rates, which may create opportunities for new businesses to locate downtown.
There continues to be new residential development in downtown Hamilton. Over the long-term, the increase in population density will have a positive impact on the neighbourhood and local businesses.
Block Story: Louie Petrou, Leathers
Louie is the owner of Leathers, a discount leather store in downtown Hamilton in operation for the last 48 years. Louie currently owns his building and is also a landlord to one other tenant. He used to own a few other buildings downtown which he sold last year. He considers himself a Hamiltonian.
At the beginning of the pandemic, Leathers shut down. Louie decided to wait until phase two to reopen. In reopening, the businesses started out with more restricted hours, but it’s now back to normal hours. His customer base is from both in and out of town, but the pandemic and shutdowns have resulted in fewer customers from out of town. The business has been able to retain most of its employees; however, revenues have decreased by a substantial amount. Louie does not have an e-commerce site and doesn’t intend to create one. He just has a static website with the location and hours listed.
Louie believes there is very little that the BIA can do for businesses and they should focus on the basics such as keeping the community clean and safe. Louie also believes that the local government should focus on facilitating investment and level the playing field for commercial taxes for businesses in the downtown. He feels strongly that the economic recovery is up to the private sector.
Louie believes that his business will be able to survive a second wave because he owns his building and has most of his inventory paid for. He sees the revival of the downtown coming and looks forward to the new development to provide new customer base.
What Can Governments and Others Do?
A focus of the BIA going forward is public realm improvements and placemaking projects that beautify and activate the public realm; 33% of businesses said they would like to see governments and other advocates focus on the public realm.
This block is seeing the benefits of creating more residential density in the downtown. Prioritizing residential development and affordability housing is a key strategy local government can use in order to support economic recovery in downtowns and main street neighbourhoods.
Local and provincial governments should look for opportunities to provide financial assistance and waive fees for local businesses to help them through the next phases of the pandemic; 83% of businesses said they would like to see this.
Downtowns all over Canada are experiencing an increase in street involvement issues, similar to downtown Hamilton. Governments and stakeholders at all levels need to work together to address these issues. There is a need to build capacity and knowledge among BIAs and local businesses to deal with these complex safety and inclusion issues and advocate for the necessary supports.
About This Block
Downtown Hamilton is the commercial, civic and cultural centre of the City Hamilton, Ontario and a regional destination for surrounding communities. The area has a significant amount of the City’s heritage properties and includes a rich architectural building stock. This block is a wide one-way arterial road with fast moving vehicular traffic.
Uses on this block vary from institutional to commercial to residential. A large office tower at the corner of Main St. and Catherine St. includes a number of professional and medical services, such as a large insurance brokerage, law and accounting firms, and dental practices. There are both independent and chain restaurants – from Anna’s café to Dominos pizza.
There is a growing local residential population in this area, including a recent hotel-to-condo renovation at the corner of King St. and Catherine St., along with a few other condo buildings in the vicinity. Two nearby parks act as a destination for residents, office workers and other downtown visitors.
Pre-COVID, this block was vibrant and busy with daytime office workers, as well as a nearby co-working spot, international school and that the City’s longest standing music venue. A social service agency, focused on harm reduction, is also located on this block. There were few commercial vacancies on the street and healthy turn-over in local businesses. A new Cannabis store was expected in the coming weeks.
Provincial COVID Context
With more than 106,000 COVID-19 cases, Ontario has the second highest case count among Canadian provinces after Quebec. On March 17, 2020, the Ontario government implemented emergency orders, which included the closure of non-essential workplaces. From May through August, the province then implemented a three-stage plan to lift restrictions. In June various regions started moving into Stage 2, which allowed businesses that were deemed non-essential to reopen with proper health and safety protocols in place, and then in July various regions moved into Stage 3 which allowed all businesses and public spaces to reopen. In November, the Ontario government introduced a new colour coded system spanning five categories: green (standard measures), yellow (strengthened measures), orange (intermediate measures), red (stringent measures), and grey (lockdown- maximum measures). On November 16th, Hamilton was placed in the red-zone stringent measures category, which limits indoor dining to 10, among other restrictions.