104th Street: Marquee area, mismatched market
Great expectations make business tricky despite development
By Mel Priestley
February 28, 2017
Garth Brooks was coming on stage in an hour, and all down 104th Street the businesses were packed – all the ones serving dinner and drinks, that is.
As a steady stream of concert patrons made their way from the LRT station on Jasper Avenue, most of the eateries filled to capacity. There were a few exceptions: Cavern had a couple tables open, Stage 104 was inexplicably closed, and the newly opened Bündok only had a few tables of diners. The lunchtime places and retail stores were either empty or closed.
As the concert time approached, Brooks fans began leaving just as quickly as they had arrived. An hour after show time, foot traffic on the street had diminished considerably. The fine dining restaurants (Rostizado, Baijiu, Tzin) maintained steady patronage – obviously not many Garth Brooks fans had stopped in there before the show. Kelly’s Pub, previously packed, was less than half full. Mercer’s Tavern, which had been wall-to-wall right up until the concert started, was nearly empty.
After the concert, Mercer and Kelly’s filled back up again. The fine dining restaurants were cleaning up and closing. The storefronts of the retail stores and lunch cafes had been dark for hours.
Events at Rogers Place certainly have a tangible impact on some of the businesses along 104th. But there’s a disconnect between the rent landlords expect on 104th Street and the money businesses can realistically make there, which has led many to close or move – despite the revitalization of the street and the opening of Rogers Place.
Part of the reason for that is the misperception that it’s easy to make money on a street that has had so much attention. It’s also partly because some of the businesses that were attracted to the street aren’t what residents, office workers or arena-goers are looking for.
“There is a bit of that misconception that you put a business on 104th and you’ll automatically be successful,” Rob Gaspar says. “Unfortunately if your product isn’t quite solid – if you haven’t really done your research – rent will kill you because the actual traffic isn’t there.”
Gaspar, who owns Blunt Salon, could have been considered one of 104th Street’s success stories. He successfully ran his salon on 104th from 2008 to 2016, until deciding to relocate to Oliver in order to stay in business. While he ostensibly left due to high rent, he feels the real problem is the media hype: 104th has an image of success that’s not necessarily grounded in reality.
Allison MacLean, owner of Carbon Environmental Boutique, tells a similar story. She opened her shop in 2009 and then relocated to High Street just off 124th Street in 2014, citing weak traffic and increasingly high rent as her reason for leaving.
“We would see and get to know familiar faces during those farmers’ market Saturdays, and then they’d disappear all winter,” MacLean says. “I was like, ‘Shoot – I think I opened my store on Bourbon Street.’ Somewhere where people go to drink and have some pub food and a beer after work, but not to come shop in an eco store.”
Rent doubled during the eight years that Gaspar ran his salon on 104th Street – and rates probably aren’t getting any lower. Ben Volorney, a principal with Avison Young’s retail team, provides the following approximations of the average rent per square foot for 104th Street and several other retail nodes in the city:
|Area||Average rent per square foot|
|104th Street||$30 to $45|
|124th Street||$25 to $35|
|Whyte Avenue||$25 to $60|
|Whyte Avenue (new developments)||$50 to $60|
|Jasper Avenue and 109th Street||$60|
|Ice District||$50 to $70|
Compared to a few other areas in town, 104th Street rents don’t seem that bad. The problem for many of the businesses that have closed or left the street – like Blunt and Carbon – is that they opened during a period of major announcements in the downtown core. The arena deal became official in 2013 and is obviously the most prominent of these announcements, but Volorney notes that there has also been a number of office consolidations and other real estate developments.
That means businesses could have had a sustainable business model when they opened, but changed due to the impacts of speculation concerning downtown’s changing landscape.
“Going from 20 to 40 dollars is a big jump,” Volorney says. “If that’s market, unfortunately that’s kind of the price to remain in that corridor, so retailers have to make the decision if they want to stay or if they want to look elsewhere and move their business.”
“There’s only very few businesses that would be successful there,” Gaspar says. “Rent just skyrocketed. The moment the arena was announced, it was like – that’s it. Our costs went up and no one can ever make a go of it.”
Others feel that there’s actually nothing unusual about what’s happening on 104th.
“This isn’t unique to 104th – 104th just tends to get more attention,” Ian O’Donnell says. “There’s a bit more of a microscope when something positive happens and certainly if something negative happens.”
O’Donnell is the executive director of the Downtown Edmonton Business Association. He attributes the closure and movement of some businesses away from 104th as simply the natural ebb and flow of the market.
“We have to be realistic that not all businesses should be in all areas and won’t be, because of the cost per square foot,” he says. “We’ve seen that on Whyte Avenue, which was sort of our indicator before, where business started moving east and west off Whyte because of the price per square foot. We’re seeing that downtown as well, 104th being the clearest example of that.”
Until business on 104th stabilizes, O’Donnell offers a word of caution to both landlords and tenants. “Landlords have to be more realistic,” he says. “I think that they’re perhaps a little on the high side at the moment with what they’re looking at charging, and tenants need to not get themselves into a situation where they’re going to over-commit to a lease rate and then put themselves into a corner before they even open.”
John Williams, owner of Blue Plate Diner, agrees that 104th Street has a perception problem. His cafe has been one of the fixtures on the street since it opened in 2004. During that time, he’s seen many neighbours come and go. “I think there’s a misconception when you come in that it’s going to be difficult but then you’ll be rolling in the dough, because it is a very well-known street and it has a perception of being successful,” he says. “Then they come in, realize yes, it is hard work, and no, we’re not rolling in the dough – and the expenses are really high.”
“I had the benefit of going from ground level,” he continues. “We saw the potential 13 years ago. I had a lot more wiggle room with my expenses because expenses were a lot lower then. I had a couple years to make really dumb mistakes. ... Over the years, we’ve slowly changed our concept a little bit, adjusted it. You have to be sort of nimble enough to move with how the street has changed.”
When I started working at the brand-new deVine Wines & Spirits back in 2005, we only had a handful of retail neighbours: Blue Plate, Hole in the Wall Cafe, Ric’s Grill. The newly renovated Phillips Lofts were attracting some new residents, but the large-scale condos that would open in subsequent years – the Century, the Icon Towers, and soon, the Fox Towers – were only twinkles in their developers’ eyes.
But within a few years, the street really started to feel different. The arrival of the City Centre Farmers’ Market in 2004 brought throngs of people downtown every Saturday in the summer. The derelict Cecil Hotel was demolished and a new building raised in its place; Sobeys Urban Fresh opened on the main floor of that building in 2008. More retail shops and places to eat opened. Suddenly, 104th seemed like it was transforming into a fully walkable paradise of mixed-use residential, right in the heart of downtown.
But it didn’t quite work out that way. Many of the retail stores closed or left. Sobeys closed. Earth’s General Store thought it could fill the gap, but is currently on the verge of closing. Pangaea – which occupied the same space prior to Earth’s – didn’t work out, either.
Michael Kalmanovitch, owner of Earth’s General store, has been very vocal about the difficulties he has faced on 104th Street since opening in 2014, right after Sobeys announced it was closing. He’s on the brink of closing now and notes that it has been an uphill battle ever since opening – and yet he still encounters people who think he must be doing well due to the supposed nature of 104th.
“When I first moved here, people said, ‘Oh, it’s so European,’” Kalmanovitch says. “I go, ‘No, look out on the street. If I was in Europe there’d be lots of people on the street and on the sidewalk.’”
Kalmanovitch notes that while the architecture of 104th might lend itself to a trendy urban vibe, the reality is that no one comes to the street to browse. And even if they wanted to, they couldn’t, he explains, as many of the buildings have smoked glass windows, making it difficult for passersby to see inside.
“There’s not enough eye candy,” he says. “[It’s] not a window shopping kind of space. Like on Whyte Avenue, there’s a little bit more of that. People walk along and they look in the windows and see what’s in that shop and what’s in this shop. Along here it’s not [like that].”
Yet 104th has achieved the goal that was set out for it, according to Jon Hall, chair of the 104th Street Steering Committee. “The vision for 104th Street, as we defined it a couple years ago, was a family-operated, mom-and-pop-oriented retail street with variety and quality,” he says. “That’s largely the way it is. There are no chain stores on 104th Street; there are no corporate stores, if you don’t count the two on Jasper.”
Hall agrees that another perception problem common to both 104th and downtown in general is that there’s no parking, and few people seem willing to embrace pedestrianism.
“Until Edmontonians fully endorse Pogo and give up their cars, they still want to drive to the coffee shop,” Hall says. “People say there’s no parking – I’m at Credo every day and there’s parking in front of the store almost every day. It’s not difficult.”
MacLean agrees that for 104th Street to thrive (as well as many similar corridors in the city), it will require moving past the North American fixation on personal transportation as the only means of getting around. She also thinks Edmonton needs to fully eradicate the lingering 1980s mentality that downtown is boring and that we need to rethink our approach to retail shopping.
“All of us, we’re all used to malls: you go shopping; you go to a mall,” she says. “104th Street isn’t a mall. And it’s not established the way that Whyte Ave has managed to establish itself. So you’re requiring downtown people – or any people in the city – [to have] a paradigm shift to go shop there.”
Maybe part of the problem is that we’ve never quite decided whether this part of downtown is meant to be a destination or a home. The first revitalization efforts seemed focused on creating that mixed-use residential neighbourhood; the arena shifted the conversation to destination. So now we have both.
Census data doesn’t have any population numbers specific to 104th Street. Based on the number of suites in the condo developments along the street, there are probably more than 1,000 people living on 104th. Over 400 more will move into the Fox towers once they are completed. There are also a number of office workers in the spaces above the street-level retail down the length of 104th, which account for a boost in weekday pedestrian traffic.
The big question is how many of the condo residents drive – and therefore, how many are looking for daily services within walking distance of their home. 104th Street has proven that it’s a sustainable home for destination-based retailers and eateries that appeal to the arena crowd, but less so for places that rely on a robust number of local residents and sustained pedestrian traffic.
The arena has attracted some of that much-desired foot traffic to the street. Blue Plate Diner has a mini-rush on game and concert nights until about 7 p.m. – after which time you’ll have your pick of tables. Williams has also had to tailor his menu accordingly: On game nights he does brisk business in burgers and lagers, and little else.
People going to a hockey game or music concert aren’t going to pick up a bag of groceries or do some shopping, either. While it’s still too early to say for sure, it seems unlikely that the arena will have a tangible impact on all businesses in the area. Instead, it’s going to continue to narrow the focus on business that cater to a burger-eating, lager-drinking hockey and music crowd.
In the meantime, there’s an onus on landlords to decide what type of street they want to help create.
“Landlords are hanging back, waiting to see what the effects of the Ice District are going to be,” Hall says. “It was coming for 10 years, right, and nobody knew what the effect would be. I think there’s an expectation that the business would explode on 104th Street and they could maintain rents and there’d be thousands of people walking by, and that just hasn’t happened.”
Succeeding in business along 104th is “a real uphill thing, and I think all landlords should know that,” MacLean says. “They shouldn’t be charging high rents. No one should be charging high rents on that street. It’s an unproven street. It’s just sent business after business after business packing.”
Photos by Mack Male.
The following list details the businesses that have left 104th Street from 2008 to the present, with the reason for their departure or closure (if known).
|Business||Type||Opened||Closed||Reason for Closure|
|Naked Cyber Cafe||Internet cafe & music venue||2001||2011||Evicted by landlord|
|Ric's Grill (rebranded to 104 Street Grill in September 2012)||Restaurant||?||2013||Bankruptcy|
|29 Armstrong||Home furnishings||2008||2015||Relocated|
|Blunt Salon||Hair salon||2008||2016||Relocated due to high operating costs|
|Carbon Environmental Boutique||Home furnishings||2009||2014||Relocated due to high operating costs|
|Lit Wine Bar||Restaurant||2010||2014||?|
|Coup Garment Boutique||Clothing||2011||2014||Relocated|
|Dauphine Bakery & Bistro||Bakery||2012||2016||Irresolvable issue with landlord|
|Roast Coffeehouse & Wine Bar||Coffee shop||2012||2013||Bankruptcy|