Council heard that because of the provincial economy, there has been a net business loss in the City’s downtown core.
Council received a report on the economic situation of downtown Red Deer during Monday night’s meeting.
“In any given year there’s business growth and business loss downtown. Because of the provincial economic climate, for the first time, we’re seeing a net business loss,” said Mayor Tara Veer.
She said this report was to examine whether there were any factors into that loss, besides the economy, that council needs to address.
The reasons for why businesses left are outlined and varied.
Some moved to relocate closer to their client base. Others closed for personal reasons and retirement. A number businesses closed simply because starting one is difficult. The report quotes Bloomberg as stating eight out of 10 entrepreneurs who start businesses fail within 18 months.
“There are a wide range of reasons why businesses do not survive; from too little financing or marketing, to not properly investigating the market. An example in our (business revitalization zone) relates to a clothing company that opened and closed within two months. It can be inferred that the reason for closing was related to entrepreneurial risk and the difficulty in starting new business.”
Other factors cited included building maintenance, high lease costs and social issues such as break-ins, prostitution and drug use.
“There are numerous external variables such as economic trends and conditions, competition, personal or family-oriented reasons, real estate lease costs, or building management challenges that sometimes unpredictable nature of maintaining a small business, or social challenges that can contribute to businesses leaving a city’s (Business Revitalization Zone),” the report reads.
“There will always be turnover and transition of businesses in a city’s BRZ, and research has shown turnover is actually the sign of a healthy economy, because it allows for businesses that are best suited to, and contribute to, foot traffic and vibrancy to find space to locate here. The data collected points to Red Deer’s downtown as being in a healthy state of transition, given broader economic pressures provincially.”
Councillor Lawrence Lee said he was relieved to hear the findings.
“I was pleasantly surprised to see that there wasn’t an overall trend in the exodus of the downtown and it was more attributable to things that are going to happen in any city for that matter,” Lee said.
Council also heard about the possibility of bringing pop-up retailers, which are short-term sales spaces, to Red Deer, as well as a business incubator, which helps grow startups into larger companies.
“We want our existing business to thrive and expand. But part of the success of our strategy is to have new business startups,” Veer said.
“The pop-ups are one component of the business startups we would anticipate to help build. And downtowns are often incubators for business startups.”