Article courtesy of Real Estate Board of Greater Vancouver, Commercial Market News, February 2012

The BCREA Commercial Leading Indicator (CLI) rose for the second consecutive quarter, advancing 1.1 points to an index level of 111. On a fourth-quarter over fourth-quarter basis, the CLI moved 1.6 per cent higher in 2011. While this is a marked slowing from the 5.2 percent surge in 2010, the index picked up considerable momentum in the third and fourth quarter of the year, more than making up for a weak first half of 2011.


The trend in the CLI turned up slightly as early softness in economic activity was smoothed out by a stronger second half of the year. This change in trend indicates a positive economic environment for the BC commercial real estate sector in 2012. “Improving economic data provided a strong tailwind for the CLI in the second half of 2011,” said Brendon Ogmundson, BCREA Economist. “However, growing anxiety surrounding the global economy could constrain the economic environment for commercial real estate this year.”The full BCREA Commercial Leading Indicator index is available at: www.bcrea.bc.ca/docs/economics-forecasts-and-presentations/clireport.pdf

Francine Tracey

604-961-6550

 
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Long considered a seedy strip, Granville Street is gentrifying, and its new condos could transform Vancouver''s entertainment scene
 
By Charlie Smith,
 

Waide Luciak has seen Granville Street go through plenty of ups and downs over the past quarter-century. When he bought the historic Yale Hotel shortly after Expo 86, it was on one of Vancouver’s seediest strips. This was before luxury condos were constructed across Yaletown, before the creation of the city’s entertainment district, even before Hong Kong–based billionaire Li Ka-shing built his first shiny high-rise on the north shore of False Creek.

 

In those days, the 900-to-1300-block stretch of Granville Street was Vancouver’s version of the downtrodden Parisian neighbourhood of Pigalle. Most noteworthy for its street kids, prostitution, porn shops, and occasional biker hangout, it was then known as Downtown South.

 

In an interview with the Georgia Straight inside the Yale’s blues bar, Luciak recalls doing a brisk business in the first five years of owning the hotel, before things started to wane. “We noticed that over the years, the business really became a little bit slower and slower,” he says.

 

Meanwhile, down the street, the Commodore Ballroom ran into severe financial trouble in the early 1990s, eventually forcing out its popular owner, Drew Burns. It was a far cry from the Granville Street of today, which is home to trendy restaurants, funky retailers, crowded nightclubs, and a growing number of street festivals.

 

Last month, Vancouver city council approved the Telus Garden mixed-used development, which will include a 45-storey residential tower in the block bounded by Seymour, West Georgia, Richards, and Robson streets. This will add more people to the neighbourhood. At the southern end of the strip, next door to the Yale, Rize Alliance is building a 187-unit, 23-storey tower. Across the street and behind the Best Western Hotel, Cressey Development is proceeding with a 193-unit, 32-storey development called Maddox.

 

That’s just the beginning. The city also plans to remove the “Granville loops”—two on-ramps connecting Pacific Street to the bridge—which will free up land for a new streetscape and new high-rises. That’s in addition to the Mark, Onni Group’s 47-storey residential tower being built behind the Yale on Seymour Street.

 

“Great public streets need population supports—they need anchors on either side, to move people back and forth,” the city’s director of planning, Brent Toderian, tells the Straight over the phone. “There is a lot of learning over generations in North America on how to make a great street like Granville work. Telus [Garden] and the Granville loops are an important part of that.”

 

All this follows a $20.8-million facelift to Granville Street completed just before the 2010 Games. This resulted in wider and fancier sidewalks, new lighting, and a rejigging of the block north of Smithe Street to create a public plaza.

 

“The Olympics, of course, transformed the perception of Granville Street and its role within the downtown,” Toderian points out. “It became more than ever the living room of the downtown. So we want to do everything we can to enhance that with additional population in the area.”

 

The executive director of the Downtown Vancouver Business Improvement Association, Charles Gauthier, tells the Straight by phone that buskers on the street, including rapper Marc Stokes, have injected an urban flavour. He adds that the VIVA Vancouver program, which transformed part of the road space into a pedestrian zone this summer, also lured more people to the area. “We get a lot of inquiries from people who want to do festivals and events on Granville Street,” Gauthier says.

 

He sees potential for conflict in the future between new residents and what he calls the "night-life economy." However, Gauthier adds that the clubs at the southern end of the strip where much of the development will occur, such as Ginger 62 and the Morrissey, have a different energy than those north of Nelson Street.

 

Meanwhile, Vancouver retail consultant Phil Boname says Granville Street was held back for many years because city planners decided to create a pedestrian mall and transit corridor without vehicular traffic, which was modelled on a similar experiment in Minneapolis. “We have found in many of our studies that converting a downtown street into a transit corridor does not necessarily work for the advantage of commercial interests,” he says by phone, quickly adding that this approach also doesn’t create a “social success”.

 

In 1997, Boname wrote a report for the City of Vancouver recommending several changes to breathe new economic life into Granville Street. He says he’s pleased to see more mixed-use development, but regrets that the city didn’t embark on a design competition to create a “glamorous” gateway at the bridge head into downtown. At the same time, he believes that the Canada Line, which was completed in 2009, will lure more major retailers to the strip.

 

“The corner of Robson and Granville will become increasingly powerful,” the consultant says. Then he tosses in a prediction that the Sears store will vacate this location within five years because its sales-per-square-foot ratio isn’t high enough to justify remaining in such a prime spot.

 

Sherman Scott, associate vice president of retail with Colliers International in Vancouver, tells the Straight by phone that lease rates are increasing along Granville Street. But they're still significantly lower than along Robson Street, where some are paying $200 per square foot.

 

"The highest deals I've seen on Granville Street are around $60 a square foot," Scott says. In an aside, he notes that he has never in his life seen so many vacancies on Robson Street.

 

Back during the slow times on Granville, Luciak had to make some changes to ensure the survival of his business. His son Joe became music director, with a mandate to bring in bands that attracted a younger clientele. Luciak then devoted his time to buying the Cecil Hotel next door in the 1300 block, with the intention of selling the entire site to a developer. This would give him a second prized liquor-primary licence and provide him with an opportunity to modernize the old blues bar.

 

His timing was impeccable, coming just before Granville began its revival. Vancouver city council let Luciak sell the “air rights”—unused density on the site—to Rize to enable it to build a taller tower. In return, Rize was required to preserve the Yale Hotel, refurbish its 43 low-cost housing units, and turn them over to the city. As part of the deal, Luciak demanded that his family would continue operating the blues bar after it was made more earthquake-proof.

 

“They could have knocked it down,” Luciak says, “but they worked with the city to preserve it. In fact, that was why I went to Rize. I knew that they were a developer that appreciated heritage buildings and that had, in the past, done this sort of development where they would preserve the old building and use the density next door.”

In the meantime, the Luciaks won the city’s approval to move their liquor licence from the Cecil to 1050 Granville, where they will open a new nightclub. “We love live music and we love producing shows,” Joe Luciak explains. “So what we’re doing is a kind of New Orleans meets Vancouver, kind of a Mardi gras seven nights a week. We’re going to be a great little daytime pub-restaurant, and by night we’ll have a mixture of live and electronic music—a real eclectic mashup of culture and creativity.”

 

They’re moving into a crowded area. One of the pioneers in creating the entertainment district, Blaine Culling of Granville Entertainment Group, says over the phone that when he opened the Roxy 24 years ago, he never expected that he would look across the street to the south and see a Le Château store. “We’ve seen a lot of changes over the years,” he tells the Straight. “It’s not viewed as a street to be afraid of, or anything like that. It’s a fun street, an interesting street.”

 

Granville Entertainment Group owns the Comfort Inn at Nelson and Granville streets, so it won’t have to cope with higher lease rates. Culling predicts that a major restaurant chain—such as Cactus Club, Earls, or the Keg—will appear on the strip.

 

“I think it’s Cactus that will make the move first,” Culling says. “It’s a couple of years away, but it will happen.”

In the meantime, other dining establishments have demonstrated some staying power. They include Glowbal Group’s Sanafir, with its Middle Eastern–themed décor, the Donnelly Group’s Granville Room, and SIP Resto-Lounge and the Refinery, which are owned by Peter Raptis and Raymond Staniscia.

 

Culling says there are already enough liquor-primary seats on Granville, and he’s concerned about the restaurants converting part of their operations to compete with the nightclubs. In 2009, the Donnelly Group persuaded city council to allow it to convert 38 food-primary seats into liquor-primary at the Granville Room, even though there were already 1,373 licensed liquor seats in the 900 block. At the same meeting, council also voted not to allow any other food-primary locations to convert their seats in the same manner.

 

Sitting in his elegant second-floor Refinery restaurant in the 1100 block of Granville, Raptis tells the Straight that he doesn’t think this is fair. “I think Granville Room, Sanafir, and SIP are just natural lounge-type places,” he says. “I don’t think any of them will stop serving food or change their focus.”

 

Raptis says there has only been one 911 call to police from his establishments, and that only pertained to something happening outside on the street. This track record, he insists, shows that he runs a safe operation.

These days, Raptis is feeling a sense of pride after winning an award from Tourism B.C. for his company’s environmental record. His wife is a teacher, and he says he caught the sustainability bug after visiting her classroom to speak to the kids. He expected them to pepper him with questions about chefs like Gordon Ramsay, and the amount of swearing that occurs in restaurant kitchens. Instead, students wanted to know about his company’s environmental practices.

 

“I really firmly believe that those children in that particular classroom are a snapshot of who our future customers are and what their future wants and needs are going to be,” Raptis says.

 

He suggests that this same environmental ethic is also persuading more people to live downtown and drive less. This is contributing to a more diverse group of people coming to the entertainment district. “It’s still a challenge,” he acknowledges, “because I think people perceive Granville Street as a bit of a party destination, as opposed to a place where you can go and have a nice meal.”

 

The marketing manager for the Yale, Stella Panagiotidis, has been on three Downtown Vancouver Business Improvement Association committees, including one dealing with Granville Street. In an interview outside the Blenz shop at the corner of Granville and Davie streets, she tells the Straight that she likes the area’s “gritty edge”.

“It’s got the cheap pizza joints and the erotic shops,” she states. “Maybe that will always be a part of what defines the character of Granville.”

 

In the middle of the interview, an older panhandler approaches and asks for change. She suggests that the street might also always include people like him—and that doesn’t bother her in the slightest.

 

The nearby Best Western Plus Chateau Granville has been upgraded, and it now includes the swanky Edge Social Grille & Lounge. It’s another sign of creeping gentrification, which will only intensify with the addition of more high-rises further to the south. Panagiotidis points out that the Scotiabank Dance Centre across the street and the nearby Vancity Theatre on Seymour Street have brought more artistic types of people into the area, as well.

“We may see a change over time—less cheap, fast-food takeout shops and more higher-end dining,” Panagiotidis admits. She quickly adds that the skateboarders and punk rockers might continue to gather on the street. But with the closure of the Yale blues bar for more than a year, she’s going to have to pound the pavement and find another job. “I’ll be exploring other options,” she says.

 

The Luciaks, on the other hand, plan to remain on Granville Street for the long haul. They’ve seen the bad times—and they’re in no mood to leave now that the neighbourhood is turning the corner.

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