Developing a neighbourhood downtown.

The shift in retail shopping in Northern Ontario toward Big Box stores and power shopping centres is changing the face of downtown cores in many communities.

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The arrival of Wal-Mart and Home Depot in the Sault's north end has downtown merchants and the city looking for ways to keep the community's core vibrant and diversified.

Downtown Association chief administrative officer Udo Rauk says the state of the downtown core presents an "image of the city itself."

With the help of a consultant, his group is envisioning the creation of a "neighbourhood concept" to make the downtown a desirable place to live, work and play.

There are signs the downtown is springing back to life with new retail, upscale apartments and a strong arts and entertainment culture after a moribund period in the late 1990s.

Some existing businesses are either moving into bigger digs, renovating or expanding. Twelve new specialty stores, including bars, restaurants, apparel retailers and bookstores have set up shop in recent years.

"You can see signs of improvement. There aren't as many vacant buildings as there were before," says Rauk, who estimates Queen Street's main floor vacancy rate at between three and four per cent.

They want that trend to continue and have hired the IBI Group, a Toronto consulting firm which recently released the first part of their three-phase Downtown Redevelopment Strategy looking for ways to attract more investment into the city's core.

The first half involves a general assessment of the downtown, analyzing its strengths and possible directions, before moving into a strategy development phase this summer and an eventual rollout phase for later this year.

The $300,000 study is funded by a $150,000 FedNor grant with $75,000 each contributed from the city and downtown merchants.

The consultants will be exploring what government financial incentives are available for facade improvement and renovations.

IBI will also be studying other successful community improvement projects in North Bay, Owen Sound, Brampton, London, Kitchener and Cambridge.

Rauk says 20-30 years ago the downtown was the Sault's primary shopping district. With the advent of supermalls and larger specialty stores on cheap land outside the downtown, customer patronage on Queen Street has dwindled. He says it makes no sense to compete head-to-head with the big retailers.

"We're not into that market, we're into (the) specialty retail market."

The study will go beyond the traditional Queen Street area to take in surrounding residential neighbourhoods, the charity casino, the waterfront boardwalk and Station Mall, along with the soon-to-be-vacated General Hospital site.

Some merchants acknowledge the downtown's image is in need of an overhaul.

Otto Volpe, the longtime restaurant owner of Vincenzo's on Queen St. across from the Memorial Gardens, says what's needed is an influx of young entrepreneurs with fresh ideas.

"You have to give people a reason to come," says Volpe. "We have to be open to new ideas."

After spending more than $70,000 on renovations four years ago, his business improved 40 per cent. He's strongly in favour of any incentive packages available for building improvements.

Among some of the consultant's recommendations include creating more second floor apartments for professionals.

Many property owners are considering creating upstairs "corporate apartments" of at least 2,000 square feet for young working couples.

Rauk says inquiries are coming in about the availability of living space downtown and some commercial property owners have already made renovations to their former upstairs office spaces.

"There's more interest than ever before," says Shirley Richards, co-owner of Mann Florist on Queen St.

"With our building, we've had the upstairs vacant for (14 years) and we're seriously thinking about doing a studio apartment. We've had five requests in the last four months for an apartment.

"The more people living down here, the more people will walk in."

City planner Don McConnell says the Station Mall remains the city's largest power retail outlet but the downtown is a vital part of the community, accounting for nearly half the municipality's total commercial assessment at about 47 per cent.

Some new specialty stores have set up shop, says McConnell, but "there obviously is an opportunity to do more."

He is very keen on the idea of creating a larger residential market downtown.

"That's huge and they'll probably be looking at incentives to encourage new private sector investment. North Bay has had some success with that and there probably will be a public infrastructure component as well."

McConnell says the city would prefer infilling existing retail and commercial space to control urban sprawl rather than have to re-zone greenfield properties.

He confirms some national retailers and restaurants have contacted the city and will eventually arrive in the Sault once they are well established in the larger regional centres like Sudbury. Boston Pizza has made no secret they are coming with a future restaurant on the works for the upcoming Gateway-Borealis waterfront attraction property.

www.saultdowntown.com

www.city.sault-ste-marie.on.ca

By IAN ROSS 

Northern Ontario Business