Gastown merchant Catherine Lough Haggquist (left, outside her Cordova Street bookstore) says rental increases, combined with a decrease in foot traffic, have caused her to relocate her business out of the trendy, up-and-coming area.

Credit: Doug Shanks

NEWS: Gastown goes up for grabs

Catherine Lough Haggquist takes a long, wistful look out the front door of her Cordova Street bookstore and inhales slowly. “It’s still a beautiful place with beautiful shops and great people,” she says, “but the biggest change, I think, is the perception of the area from the public. There’s been just so much upheaval here that I think people have given up on coming down here unless they specifically have to.”

In her 14 years running Biz Books, an independent bookstore that caters to the film and theatre set, Haggquist has witnessed Gastown’s evolution from a rough-around-the-edges home for eclectic shops, theatre schools, and hole-in-the-wall cafes, to an emerging boutique fashion and restaurant district.  

It’s not that she begrudges Gastown its impending renaissance, it’s just that her store won’t be a part of it.

"For Lease" signs have started popping up all over Gastown.

On August 15, Biz Books will shutter its Cordova Street location in favour of an “online and on-location” business model Haggquist plans to run out of a non-retail warehouse space in White Rock. While acknowledging booksellers have unique challenges in the current economy and in the internet age, Haggquist said much of her decision came down to the changing face of Gastown, which, she says, is becoming increasingly inhospitable to independent businesses.

Biz Books isn’t the only casualty of gentrification, but merely part of a larger exodus of small businesses. In the past two months, more than half a dozen businesses have left, or are planning to leave the area.

Haggquist attributes the phenomenon to a perfect storm of pressures. Residential developments, like the ultra-hip but reportedly sparsely populated Woodward’s building, haven’t delivered the promised uptick in walk-by business, she says, nor did the Olympics. In fact, she believes the stay-clear mentality occasioned by the Games’ traffic upheavals drove employers from Gastown, leaving office space empty and fewer people to frequent area shops and restaurants.

While Gastown has proved fruitful for destination businesses, like higher-end clothing or furniture boutiques, Haggquist believes the neighbourhood’s foot traffic has actually decreased. “The streets feel less busy than they were when we first moved here,” she says. In addition, rents in the area are going up, Haggquist says rising rates played only a minor role in her decision to leave, but rental increases are causing other businesses to flee.

Gone are the theatre schools, Lyric and School Creative, which helped to feed Haggquist’s shop. Arsenal Pulp Press, a book publisher, is preparing to head for cheaper digs in Chinatown. Retro clothing retailer Woo Vintage has moved to Main Street, while art and clothing boutique Mooncruise Gallery closed entirely. Even interior design stores, part of the area’s new design-chic draw, have left, citing the same kind of pressures Haggquist describes.“You get forced out,” says Dana Coburn of Metropolitan Home, which had operated in and around Gastown for more than 25 years. Coburn relocated to Kitsilano’s growing furniture and design strip on West Second and Fir six weeks ago after her Gastown landlord sought $40 per square foot for her 1,895-square-foot store. That would have meant an annual rate of more than $75,000 for her former location in the Dominion Building on West Hastings Street.

“My business partner and I were like, ‘Dream on!’” she says, noting her old space has yet to be tenanted, despite the landlord dropping his asking price three times. Coburn declined to reveal the rate she had been paying in her former Gastown location, but estimates a reasonable rate for the space is between $15 and $20 per square foot. “It’s because of the gentrification of Woodward’s,” she says of the steep increases. “All of a sudden, all the landlords were like ‘Hey, things are going to happen to this neighbourhood,’ but it’s still really on the edge, you know? You’ve got to open your eyes.”

Indeed, a glance around Gastown shows many “For Lease” signs, suggesting some landlords may have jumped the gun on increasing their rates. Coburn points out that whereas residential rental properties have a cap on annual rental increases, there are no limits on rental increases for commercial spaces when their leases come up for renewal, usually every few years.

This has landlords in Gastown proposing rates based on the forecasts of rapidly increasing property values, in some cases asking for increases of up to 200 to 300 per cent, says Coburn. Without increased sales, few independent businesses can afford those kinds of prices.

Some business owners worry chain stores may start taking over empty retail spaces.

The current situation worries one area restaurateur who’s staked his future on the neighbourhood flourishing with a variety of small businesses.

Mark Brand rents seven properties in Gastown and the Downtown Eastside, including popular eateries Boneta, The Diamond, and Sea Monster Sushi. His newest acquisition is the old Save-On Meats space, which he plans to turn into a market. With rental rates nearing $40 a square foot, independent businesses in Gastown are sure to fail, he says. “To me, that’s suicide. I don’t understand how you could do that in this neighbourhood just yet, the density is not there.” Brand adds that while Gastown’s revamp has plenty of people walking through it, they’re mostly gawking, not buying. “It kind of feels like Disneyland sometimes.”

The more empty retail spaces linger, he says, the more vulnerable Gastown is to an onslaught of character-assassinating chain stores that can afford to take the financial hit until the neighbourhood matures. Brand fears that would ruin the eclectic vibe on which his businesses capitalize. “This is why I try to grab up as much as I can as fast as I can, especially the key locations,” he says. He adds that he negotiates ferociously for reasonable rents, suggesting other independent businesses do the same in a bid to preserve Gastown’s charm. “People have to stick to their guns,” he asserts.

But Gastown’s sad story only goes so far says Jennifer Friesen, sales manager of the flagship boutique of local fashion house Obakki and marketing director of the Gastown Business Improvement Association. Friesen asserts there’s an undeniable population of thriving retailers, designers, and architecture firms in Gastown. “Our sales in Gastown have never been better,” she says, adding the area is home to many local fashion retailers and design houses that have found unprecedented success in their current locations. “I think what’s happening in Gastown is incredible,” she continues, pointing to the ’hood’s hopping night life and burgeoning reputation as Vancouver’s place to be for the young and hip. “This is a time to celebrate what Gastown is becoming,” she says. “Now is the time to hang on tight and enjoy the ride.”

That isn’t an option for Biz Books’ Haggquist, who couldn’t avoid closure, despite offers of help from her landlords. “This is in no way them forcing us or pushing us out,” she says, “but eventually the numbers are what the numbers are.”

Although Haggquist is optimistic about Biz Books’s online operation, she can’t hide her melancholy at leaving Gastown. “I’m going to miss the spontaneous drop-bys of really great people,” she says. “I’ll miss watching people discover stuff.”

For business owners like Brand, who are finding ways to stay put and expand in a changing Gastown, the lingering question is: What will be left to discover if the area’s independent businesses are eventually forced out? “Instead of getting an independent businessman who can maybe only raise $100,000 to $200,000 to start his business, you’re going to see the chains,” he says. “It terrifies me.”