Downtown Vancouver will undergo a retailing renaissance in the next few years as its population continues to grow, say retail and real estate industry leaders.

During a seminar last week called Sleepless in Vancouver, held as part of the Vancouver Board of Trade's annual Leadership Summit, two leading developers and the city's top planner dismissed the widely-held view that the downtown core is becoming a bedroom community for the suburbs.

"This hypothesis that we're wrecking Vancouver is the most ridiculous thing I've ever heard," said Eric Carlson, president and CEO of Anthem Properties Group, which specializes in retail projects.

The rest of the world is actually trying to copy Vancouver, Carlson told conference goers, because "it really works."

Bayne Stanley, Business Edge
Bosa Properties Ltd. vice-president Dale Bosa says residential population growth will sustain the downtown's economic life.

In recent years, large shopping malls have flourished in suburban communities such as Burnaby, Coquitlam and Surrey, which have more available land, while many companies have also moved their existing offices there, or opened new ones.

Carlson and Dale Bosa, vice-president of development for Bosa Properties Inc., and Larry Beasley, the City of Vancouver's co-director of planning, agreed that retail will instead grow in the downtown core because its residential population has doubled as a result of a condo boom that saw several industrial and office buildings converted to residential properties.

Vancouver's focus on mixed-use development will be the key to retail's revival, they noted.

"Our philosophy as a company is: We'd like to do mixed-use developments because we feel that they feed off each other," said Bosa in an interview with Business Edge. "The retail feeds off the residential and the residential feeds off retail."

He pointed to his company's development at 900 Burrard Street, a short walk from the Sheraton Wall Centre where the conference was held, as an example of mixed-use success.

The property at 900 Burrard contains 25,000 sq. ft. of retail, including a Starbucks coffeeshop and Earl's restaurant, 70,000 sq. ft. for the Paramount movie theatre, and 457 condo units on top.

"We were having a difficult time getting financial institutions to come to the plate," said Bosa. "They all thought we were nuts to even have a theatre as a major tenant. And now you look three years later, and all the retail is thriving."

Georges Pahud, the president of the Real Estate Board of Greater Vancouver who took part in the Sleepless in Vancouver panel discussion, offered a dissenting view. He said Vancouver has already become a bedroom community for the suburbs - but he appeared not to be losing any sleep over the situation.

"This is not a worry for us, but it's a concern," said Pahud, whose remarks emphasized inequalities between business and residential property taxes.

The City of Vancouver's Beasley added people need to look at the demand side - not the supply side - when assessing the downtown's potential for growth.

"It's a first-rate urban myth that Vancouver has a lack of balance in development between residential and commercial (including retail)," Beasley told the audience. "It's a first-rate urban myth that our central business district (CBD) is in trouble. It is not struggling. It is not losing companies to the suburbs as a trend."

He noted the downtown is 10 times larger than the next closest business district - central Broadway - and it is not even near its capacity for commercial development.

Downtown Vancouver's population has grown to approximately 85,000 from 40,000 in the early 1990s.

Retail growth is happening in the suburbs, too, because of population growth, added Beasley. But the suburbs' gain is not the downtown's loss, he contends, as retailers are not leaving the core but simply expanding outward.

Vancouver's growing residential population has sparked a retail "revival" in areas such as Davie and Granville streets and the north end of the downtown core, said Beasley.

Because of the large number of people working and getting together downtown, "high-order" retail outlets can sustain themselves.

But the larger population has sparked more demand for day-to-day shopping facilities such as grocery stores.

Vancouver has been lucky, he said, because unlike places such as Minneapolis and Edmonton, it does not have huge malls sucking business away from its core - "and, instead, our downtown has remained a very important retail place."

Although it won't have giant malls, the downtown could also soon become home to more big-box stores, space permitting. Concord Pacific Group Inc. is developing a Costco along Beatty Street between Dunsmuir and Georgia streets as part of a four-tower condo complex. Meanwhile, just across the Cambie Street bridge from downtown, the 149,000-sq.-ft. The Rise project at Cambie and West 7th Avenue includes a Canadian Tire and a Best Buy electronics outlet.

"I don't think we want to become a city that's dominated by big-box outlets, because that does begin to soak away from our local retail shopping streets," Beasley added. "Our retail shopping streets are very important to us, because that's where people will walk to do their retailing as compared to what Americans do - all get in their cars just to buy even the simplest commodity - so we want to be careful."

Blake Hudema, a Vancouver-based retail consultant who works with developers and retailers, foresees large niche stores such as Roots, Danier Leather and Victoria's Secret going into the downtown core. Hudema, president of Hudema Consulting Group, predicts the underground Pacific Centre mall will expand up to street level on Granville and large stores will also expand or set up shop.

Sears, which takes up a block between Georgia and Robson to the north and south and Granville and Howe to the east and west, could also grow - depending on the fate of Sears Canada, which some analysts view as a takeover target.

"The future of the department store in Canada is certainly a question mark," said Hudema.

He predicts Vancouver's retail development will remain strong heading towards the 2010 Winter Olympics. High consumer spending, high employment from Olympic venues and megaprojects such as the RAV rapid transit line and Sea-to-Sky Highway expansion will give shoppers - and retailers looking for new homes - more money to spend.

Hudema forecasts Granville Street will undergo a "Robsonization" and, like Robson Street, become a long stretch of retail outlets that attract large flocks of shoppers.

"If we can open up Granville Street to cars, then we'll have once again a great retail street in Vancouver," said Hudema.

But you probably shouldn't expect a large new mall, in excess of 500,000 sq. ft., to go up anytime soon.

"We haven't built a new large shopping centre in Greater Vancouver since 1991," said Hudema. "Basically, the ones that are there now are very competitive and good (real estate) assets."

Brent Sawchyn, principal and senior vice-president of development for Anthem Properties Group, says shopping centres were "the forgotten orphans" of Vancouver three years ago.

Many large institutional investors unloaded all their properties, but now the retail development sector is as hot as the housing market.

"Now, you're seeing three years later, everybody and his brother wants to buy retail," Sawchyn said in an interview But new housing may not drive retail development in the core much longer. To maintain a balance between residential and commercial space, the city has issued a moratorium on condo conversions that, planner Beasley predicts, will last at least another year until his department completes a study on the downtown.

"My expectations are that, in the future in downtown Vancouver, you won't see a lot of residential in the core CBD," said Beasley. "You'll see it around the core - the way it is now."

(Monte Stewart can be reached at monte@businessedge.ca)