City’s heart beats again

No one is saying it’s business as usual again, at least not yet.

But after more than two years of the COVID-19 pandemic, signs of life are returning to Toronto’s downtown core, according to data from a regional business association.

“For the first time in two and a half years, we can actually talk about some positive metrics, which is pretty nice,” said Pauline Larsen, interim executive director of the Downtown Yonge Business Improvement Area, which runs from Alexander Street in the north to Richmond Street, and includes retail centres like the Eaton Centre and College Park, as well as entertainment venues including Massey Hall, Elgin and Winter Garden Theatres, and Toronto Metropolitan University.

The surest sign that life is slowly returning to the downtown core? People, said Larsen.

Pedestrian traffic for the Victoria Day weekend — the most recent study done by the DYBIA — showed foot traffic along the key downtown part of Yonge Street was up more than 200 per cent over last year.

“Yes it’s off a relatively low base because 2021 was terrible, but that’s almost a million people over those four days, going up and down Yonge Street,” said Larsen during an interview at a Yonge-Dundas Square teeming with people eating lunch, sitting in Muskoka chairs, or heading toward the mall. “The street experience starts to feel more activated and energized and everyone starts to feel more positive.”

Those visitors are also coming from further away than they did during the last two years. During the early days of the pandemic, the vast majority of people in the area were coming from no further than 20-25 minutes away. This year, that figure is closer to 40-45 minutes away, according to cellphone data provided to the DYBIA by a thirdparty research firm.

Retail analyst Lisa Hutcheson, whose office is in the downtown core, says the change is evident.

“It’s busy in the malls again and it’s great to see. People are realizing ‘Oh, I can come out again,’ ” said Hutcheson, managing partner at J.C. Williams Group, a retail consultancy.

New tenants for the area, including Ikea’s new 66,000-square-foot store and the Little Canada exhibit, are also cause for optimism, Larsen said.

It’s not just the malls and stores, but public spaces in the area which are returning to life, said Hutcheson: “There are concerts and events every weekend. It just seems so much more vibrant.”

But while the pedestrian traffic — which Larsen estimates is roughly 80-85 per cent of pre-COVID levels — is coming back, there are other signs life is still far from normal. The vacancy rate for street-front commercial properties is 18.8 per cent. The overall vacancy rate, including mall stores with no streetfacing area, is 13.6 per cent. Downtown office towers including in the DYBIA, the financial district and the entire downtown core, are just 26 per cent full, according to figures from the Strategic Regional Research Alliance cited by Larsen.

“I think with offices, people are looking at ‘What is a hybrid work model? What is our return to work policy?’ We don’t yet know what it looks like. I’d like to call this the summer of recovery, but I think it’s the summer of early recovery is how I would word it,” said Larsen, who argued that even within the grim occupancy numbers in the office towers, there’s reason for some hope.

“What the data also shows is that close to 40 per cent of people are in the office at least once a week. So it’s not like they’re not here at all, but they’re not here five days a week,” said Larsen.

But Ryan Mallough, Ontario regional vice-president at the Canadian Federation of Independent Business, worries that what’s being seen right now is far closer to a new normal, rather than being an early step in a recovery.

“It’s fantastic to see patios full, and people out and about, but we just don’t know what things are going to look like,” said Mallough.

Small businesses who count on those office workers could face some harsh new financial realities if only some of them come back, for some of the time, Mallough said. Anecdotally, many small downtown businesses are seeing dramatically fewer customers on Mondays and Fridays, Mallough explained.

“If a hybrid work week means people aren’t coming into the office as much Mondays and Fridays, maybe those are the days restaurants choose not to open,” said Mallough. “It’s going to force a rethinking of the business model.”

After racking up an average of $160,000 in debt during COVID, said Mallough, many small business owners are already looking at throwing in the towel.

“Eighteen per cent of our members are actively considering bankruptcy, or otherwise shutting their business down. The last two years have been really, really hard.”

‘‘ It’s busy in the malls again and it’s great to see. People are realizing ‘Oh, I can come out again.’

LISA HUTCHESON MANAGING PARTNER AT J.C. WILLIAMS GROUP