Tang Phoonchai is closing Maai Living, his four-year-old furniture store on Hastings Street, because he can’t cope with the latest rent increases on what was one of the city’s grottiest retail strips until just a few years ago.
“The main reason is rent going higher,” Phoonchai said. A recent 10-per-cent increase raised his monthly rent to $6,800.
The rise is is too much for him to handle with the revenue from his 1,800-square-foot store that specializes in Thai furniture and housewares.
“We are planning to move everything to our warehouse in Richmond, I hope before December. The expenses are high and I cannot keep throwing money.”
One in a dozen
Maai Living will add to the 12 stores that have shut down over the past two years on Hastings Street, said Wes Regan, vice-president of the Hastings Crossing Business Improvement Association.
The reasons are a complex combination of costs associated with gentrification, such as building renovations, and the growth of property taxes in an area that has seen an explosive rate of upgrading since Woodward’s opened in 2009.
“Businesses in Vancouver are taxed based on the value of the property and, if that value goes up, taxes go up and then rent goes up,” Regan explained.
That is Maai Living’s case. Robert Tham, the store’s landlord, said property taxes rose considerably in four years and that pushed up rent.
For Tham, the closure of Phoonchai’s store means that he will be able to sublease the space at a higher market rate, closer to the $35 per square foot that is being charged on nearby Cordova Street.
The place to be
“This area has become very expensive in the last five years, because is the ‘in’ thing to be here,” said Ric Yuenn, a fashion designer whose store has been on Cordova Street for 23 years.
In order to afford the latest rent increases, Yuenn decided to share half of his space with a sweater manufacturer. “I think that’s the sign of the future,” he said.
Other stores have also found creative ways to afford their financial burdens, like selling unique products or moving a few blocks away, to higher traffic areas.
They are trying to avoid having the same fate of former neighbors such as Deluxe Junk, Rubi+Kino, Nood and soon the Oriental Rug Bazaar.
Trying to help
The business associations also do their part to avoid further dislocation.
The Hastings Crossing group is working with the Fair Tax Coalition, the Carnegie Community Action Project and the City of Vancouver to discuss how local business are taxed and to support better long-term leases.
The Gastown Business Improvement Society’s landlords are trying to deter speculation by committing to a non-mandatory agreement of not renting spaces to big chains.
In spite of the efforts, most business owners in the area are still worried about the possibility of losing their livelihood.
“There’s nothing anybody can really do. The rent went up because of the property taxes, you have to go with the flow,” Yuenn said.