Will the pandemic reshape landmark high streets like Queen St. West and Robson?

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On an unseasonably warm October afternoon, the Horseshoe Tavern on Toronto’s Queen Street West was eerily quiet. A few diners sat on its makeshift sidewalk patio. No one was inside. Since mid-March, the 73-year-old music venue, a beloved institution on one of the city’s busiest commercial streets, has either been closed or empty.

For a brief period in August, when Toronto eased pandemic restrictions, the Horseshoe started lining up its fall concert schedule. Then COVID-19 cases soared, and the province restricted activity once again. And that pretty much killed business in a place that once held shows six nights a week, in a space small enough that you could run into the musicians at the bar or in the bathroom. Owner Jeff Cohen has used every government program available: rent relief, wage subsidies, an interest-free loan, a special heritage grant and a city tax break. That’s in addition to blowing through his savings and line of credit.

“It is getting frustrating eight to nine months in," says Mr. Cohen. “Live music is not a super-spreader. We are not a bar. We are not a night club. We are not a dance club. Nothing wild is going on.”

The Horseshoe isn’t the only one suffering. Queen Street West is dotted with closed shops, “for lease'” signs and vacant storefronts. One barbershop is full, and a few cafes have queues outside their shops, but most stores are empty.

In Vancouver, on downtown Robson Street, things are a bit more lively.

On another October afternoon, there’s a steady flow of shoppers with bags from Aritzia, Nous Sommes Chocolat and Plenty. A couple dozen people are lined up outside Zara, another handful at Muji and Nike, in part because a limited number are allowed inside.

Inside COS, a London-based fashion store down the street from Zara, customers are warned that the salespeople can’t fetch them different size and that they have to turn in their try-ons for a steam-cleaning afterwards. But at least they can use the fitting rooms, which just re-opened.

At Geomania, a small jewellery, gems and crystals shop that’s been on Robson since 2003, owner Echo Guo said that business has been slowly picking up. After being closed for three months early in the pandemic, the store got to almost 70 per cent of usual sales during the summer, and is now at a little bit more than 50 per cent.

“There’s still customers. No tourists, but we have local customers.”

Downtown destination streets like Robson and Queen West, along with Water St. in St. John’s, and Rue Ste. Catherine in Montreal – have been slammed by the COVID-19 pandemic. They tend to rely more on out-of-area visitors and office workers, according to a recent report by the Canadian Urban Institute, which has made them more vulnerable in the pandemic. (Some commercial streets, particularly those in dense, cohesive residential neighbourhoods, have fared better.)

“There’s a lot of COVID economic Darwinism going on,” says Brian Kelcey, a consultant on urban public policy who has been working with private and government groups on pandemic survival. “Queen West has been killed. Part of it is the rental dynamic, where the businesses that were doing really well before the crash were paying higher rents, but someone in a crappy storefront that never had many seats, or one with a window that opens to the sidewalk, is doing okay.”

These high streets have always been seen as barometers of urban public life and retail health. They were already facing pressure, with increased competition from Amazon, as well as quick delivery food options and casual eateries. Now everyone is watching closely to see what happens next. Will they survive and re-emerge, or will they be transformed into something less than what they once were?

The numbers tell of the struggle for survival. A walking count in late October along eight of Robson’s key blocks, from Robson Square in the east to Denman St. in the west, found 29 street-facing storefronts that were unoccupied out of 211 total (though some may have pre-dated the pandemic). Visitor traffic has yet to recover. The street’s busiest block saw more than half a million visitors in each of July and August 2019; this summer, the numbers were closer to 235,000, according to the Robson Street Business Association.

In Toronto, on one particularly dire block of Queen West, only two of the 13 storefronts were open: a restaurant and a plant store. On another block, three of the nine storefronts were cannabis shops.

According to the Queen West Business Improvement Association, on one stretch, between Bathurst St. and Simcoe St., which links Queen to the Ontario College of Art and Design and the Art Gallery of Ontario, there were 64 vacancies as of October, versus 32 in May. Jones Lang LaSalle Inc., a real estate services firm, says the vacancy rate doubled to 18 per cent over the course of the pandemic on the area from Spadina Ave. to John St. Three cannabis stores have opened on that stretch; landlords believe they’ll be able to pay the rent through a recession.

Robson may be faring somewhat better because more people live nearby. An analysis of the populations within a 400-metre walking distance of the two streets, done by Vancouver census analyst and mathematician Jens von Bergmann, shows that about two and a half times as many people live in the “walk shed” around the main stretch of Robson compared to a similar strip on Queen.

Rents are coming down on both streets, as landlords hope to breathe new life into the retail landscape. Robson has been among the most expensive streets in Canada, with rents up to $250 a square foot; a recent advertisement for one space in a prime block advertised it at $80 a square foot.

On Queen West, the average asking net rent has dropped from nearly $112 a square foot pre-pandemic to below $100 in the third quarter, according to JLL.

And some new businesses are moving in. Nine of the unoccupied spots on that eight-block stretch of Robson had signs promising new retailers. A large and swish new Foot Locker is behind the hoarding in one recently constructed building. Elsewhere are Oomomo, a Japanese housewares store; Paul Bakery, an operation that has been trying to open for a year but is still struggling with Vancouver’s difficult permit process; three Asian restaurants, including Katsuya, Ramen Koika and Saku; and a Hello Nori.

“This is our first location that’s not in a mall,” says Betty Au, the vice-president of operations at Oomomo, a national chain based in Richmond, B.C.

She’d decided a year ago to move this outlet from a mall in Chinatown, hoping to capitalize on the greater pedestrian traffic on Robson and the store’s proximity to a mini-Japan cluster (Muji, Uncle Tetsu’s Cheesecake and Hello Nori are on the same block). She believes having a street storefront will pay off even more now. “I would say people aren’t heading into the mall these days.”

Brokers say some new leases are getting signed after the dead months of the pandemic. “The demand for retail space has actually gone up,” says Mario Negris, a broker with CBRE who specializes in Robson St. commercial. “Last week, I had two tours of groups from Toronto – it’s the first time I’ve had two tours since March.” Of 10 properties in his portfolio, he says four that were vacant before the pandemic have now been leased, and four that became vacant in the months after lockdowns started have also been leased.

By early November, with the pandemic in its second wave, Mr. Negris was still hopeful. “Everyone’s thinking this is just a speed bump in the road," he said, pointing out that, given the city’s approvals process, anyone signing a lease now won’t be open for nine months or so.

Even though vacancies are rising on Queen, JLL’s senior vice-president of retail, Brandon Gorman, says some new leases have been signed, including Chick-fil-A and Knix, an underwear store that’s moving into a larger space. Retailer Brandy Melville just bought its own property. “We have seen retail sales recover faster on the street versus the malls, with shoppers showing more desire to shop on the street versus in an enclosed environment,” he says.

But with Vancouver and Toronto going back into lockdown amid record high COVID-19 cases, more retailers will suffer and be forced to close permanently.

“The bloodbath has not started yet,” says Robert Sysak, the neighbourhood director for the West Queen West Business Improvement Association, adding that if restaurants close again, “they will definitely be gone.”

Brian Kelcey, the urban policy consultant, says the key to recovery for high streets will be for cities to cut the costs and administrative burdens for business. Canadian businesses say they face cumbersome and expensive hurdles at city halls, including arcane and time-consuming permit processes and exceptionally high property taxes in places with a lot of redevelopment, like Toronto and Vancouver.

Mr. Kelcey says he expects as many as a third of businesses in these areas to be wiped out by the pandemic and contends that cities need to rethink how to foster new ones to take their place. Programs like rent relief and wage subsidies are band-aid solutions that won’t fix those larger issues. “These businesses need help, but we don’t want to find ourselves spending money without fixing the long-term problem.”

Some foresee a change in the kinds of businesses that will populate these once high-rent streets. Shopping streets have already being seeing a shift. Services and restaurants had been increasingly replacing stores selling merchandise. Temporary pop-ups, or multiple businesses sharing a space, were starting to enter the landscape as a way of filling storefronts. Retail was trending to the cheap and the quick.

On Queen, Nunu Ethiopian, a fine dining restaurant which has been in business for 12 years, is having a hard time. The food is not associated with takeout, and the restaurant has lost most of its revenue. The owners, a husband and wife team, don’t know if they’ll make it to the other side of the pandemic.

“At the moment, we really don’t know what we will do,” says Chris Rampen, who co-owns the restaurant with his chef wife. “How we will survive, I have no idea. If we manage to survive, I gather the market will be less competitive.” They got rent relief but did not qualify for wage subsidies.

Mr. Rampen, looking at the changes on Queen West and beyond, worries the city will turn into a conglomerate of chain stores. “You don’t go to a major city to dine at McDonalds or A&W or Tim Hortons. I fear we will rapidly become a city of fast food chains and pot dispensaries. That seems to be the way we are going.”

The West Queen West BIA’s Mr. Sysak says the street, as well as the city’s vibrancy, will fade if most of the retail is replaced with chain and cannabis stores. “There’s nothing wrong with Shoppers, Rexall and cannabis shops. If that is all there is, that is the magic that will be lost,” he says.

Businesses that are still operating have had to adapt to the new realities. It’s not just face masks and decals on the ground showing people where to stand.

Peter Pan, a hot spot for first dates with its large corner windows, is now Peter Pantry & Wine. Rows of wine bottles, and shelves of jams and sauces, have replaced the tables with the best views, and the owners are changing their menu to prepackaged meals. Noce, a popular Italian restaurant, started doing takeout for the first time and erected a large white tarp tent on the side street for seated dining.

The Horseshoe is changing to a full-service music lounge, as it used to be in the 1970s, with no standing room. Concertgoers will be seated at tables, able to order wine by the bottle and drink it in wine glasses, not cups. Owner Jeff Cohen expects the price of admission to triple because the venue will no longer be able to fit as many people. There will be no opening acts, and bands will start and end earlier, playing a few sets instead of just one. “We don’t have a choice,” he says, adding he’s not fighting the changes but embracing them. “We are going back to the way it was before.”

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