Top Story
High cost of business
By DAVE MABELL and STACY O'BRIEN
Mar 28, 2008, 04:10

It looks like a sign of success. Commercial occupancy rates are up in the city centre — and so is rent, in many cases.
Local business people are buying some key downtown buildings and upgrading them. But even so, says Ted Stilson, rents here are comparable to the prices paid in downtown Red Deer or Medicine Hat.
“It’s still a bargain in our downtown, although there are some exceptions,” says Stilson, program director for the Downtown Lethbridge BRZ.
That’s cold comfort for Myrna McQuarrie, one of those exceptions. After facing a huge rent hike for her 3 Avenue South bookstore, she’s now ordered to vacate.
“We don’t know what to do,” says McQuarrie, who’s operated Adams Books for 17 years in the downtown core — 12 of them at her location across from Galt Gardens.
“It’s a wonderful street,” with food, hair fashion, an art studio — and another bookstore next door, making it a book lovers’ destination.
McQuarrie moved into the former Hoyt’s Hardware location after it sat empty for several years, she says. The family that owned the building was very considerate in helping her make the move into larger, higher-rent facilities than where she started.
But now the building is controlled by a property management firm in Calgary, says McQuarrie, and they want to collect Calgary-level rent.
“We’ve been paying $24,000 (a year) but they wanted to raise it to $58,000,” she says. “We’re just a small business, there’s no way we could pay that.”
More recently, she says, the roof on the single-storey building sprung a serious leak. Property managers in Calgary agreed to repair it — but said they couldn’t start work until the building is empty.
“We have to be out by the end of May.”
For McQuarrie, who counts seniors and lower-income people among her customers, there’s an effective remedy that’s been proven in other provinces.
“I really feel there should be rent control,” protecting small business people as well as residents of suites and apartments. “The companies really shouldn’t be able to raise their rents so much in one year.”
For now, she has no idea where she or her valuable collection will end up.
“We have well over 500,000 books,” and so far it’s proven impossible to find somewhere to store them — let alone reopen the store.
“We’ve looked as far as Coaldale and Picture Butte,” but not even communities surrounding the city have the space needed — about 6,000 square feet of retail space, with a basement about the same size for storage — to open a bookstore of that scope.
Downtown is where shoppers normally look for specialty stores like hers, but McQuarrie fears other owners will face the same kind of ultimatums from absentee landlords.
“We’re trying to revitalize the downtown,” she says. “But if they put the rents so high, we’re going to see stores closing.”
So far, says Stilson, there have been more stores opening than closing. But rents are advancing, he says, especially for first-class office space.
“And property values have gone up downtown,” so owners have to pay higher property taxes.
Store leases are increasing, but Stilson says rates depend on the location “and who owns the building.” Mall rents can be much higher, he adds.
Erroll Zaretski, owner and broker of Tiger Realty, has noticed an increase in commercial property values and rents in the last few years. Professional office space rental is up at least 30 per cent over the last five years and retail space inside the city centre somewhere between 30 to 50 per cent.
He notes a tremendous number of the buildings in the downtown area have been updated and upgraded during the last few years.
Where someone might rent 2,500-square feet in an old nasty looking building years ago, now the owner has created a new facade and put in new windows and doors. The rent increases because it isn’t the same building that it was.
“Even if a tenant was in an older dilapidated building in the middle of a block and a large number of buildings across the street or on both sides have already been refurbished their rent is going up anyway,” Zaretski says. “They would definitely get a bump in rent because the street appeal is better and traffic goes up.”
Jeremy Roden, an associate with Bankers Commercial, says in the last two years rent has increased slightly in the downtown in the last two years, but not as much comparatively to other areas of town.
“We’ve seen larger increases in the industrial area, whereas the downtown has incrementally gone up, but not the kind of increase we have seen in other areas,” he says, adding downtown still features one of the lowest rental rates in town.

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