It has been more than two years since RioCan REIT purchased the former Bathurst Street home of Kromer Radio and began working on the development of a three-storey mini mall in the area.
RioCan may have believed the Kromer site and adjacent parcels of land would allow it to move swiftly on its intended 12,000-square-metre (129,167-square-foot) building, as the land was designated and zoned for mixed-use commercial development, but that has not been the case.
The REIT’s proposed plan has been a lightning rod for controversy since RioCan announced that the world’s largest retailer, Walmart, would be the anchor tenant for the site.
Community groups have opposed Walmart’s presence, voicing concerns the retail behemoth would worsen traffic and simultaneously suck sales and vitality out of the nearby Kensington Market and Little Italy neighbourhoods.
RioCan has countered with market and traffic studies it said shows those concerns to be groundless, though opposition to the development continues among community and city council members.
RioCan’s research has confirmed that there is currently an automotive exodus by locals to shop for items not currently available and a countervailing influx of shoppers from outside the neighbourhood to visit Kensington Market.
Shopping at the historically designated market and shopping at a downtown Walmart “are two entirely different experiences, but they are potentially symbiotic,” said Jordan Robins, RioCan’s senior vice-president, planning & development.
The Kromer Radio building, now demolished, the site of the proposed Riocan retail development at 410-446 Bathurst St. in Toronto
While RioCan may have been surprised by the visceral reaction to Walmart by some locals, the REIT has plenty of experience in the tough game of downtown retail development.
“It unfortunately takes an unbelievable amount of time to get an application approved in the city of Toronto today,” said Robins.
“Generally speaking, no matter where, people don’t like change. We knew it would be a process.”
The REIT went through a similar process when it unveiled plans for an urban format Home Depot outlet in a three-storey development at Portland and Queen St. West on an underused parking lot.
“People went bananas,” said Robins.
Home Depot pulled out of the project in 2008 at the height of the economic crisis and Loblaw Cos. stepped up as the anchor tenant for the development which today features the supermarket in a unique second-floor perch.
Retailers want to fit in
RioCan has made a substantial effort to knit the planned development into the community, promising an urban prototype that is a far cry from the standalone Walmart stores with which most Canadians are familiar.
Walmart will be one of up to 10 retailers in the development and it will not exceed 8,800 square metres (94,722 sq. ft). The site will also boast underground parking as part of an effort to reduce its footprint in the area.
“It is in an area along the Bathurst Street corridor that needs improvement,” said Robins.
Traditionally a blue-collar, somewhat rundown part of Toronto, the area has popped up on the radar of retailers and developers as condo developments have sprung up around it and highlighted the dearth of shopping options.
“We have been approached by a variety of retailers, none of whom operate in the area but want to operate in the area because of the extensive population growth associated with the condominium developments that are occurring today in the core,” he said.
In Toronto, retail has lagged behind condo growth as politicians have proved reluctant to support projects, said the RioCan executive.
“It is interesting to note that the councillors, as they should be, are supporting residential growth, condominium growth, but at the same time they are not supporting the retail and service commercial uses that those residents of the condominiums that are getting approved need and want. It is hard to do one without the other.”
Retailers are willing to make the sacrifices to fold their businesses into more cramped urban locales. That means a willingness to embrace more expensive parking options such as underground garages, tailored product selections, and less frequent replenishment and the use of smaller trucks to bring in new merchandise.
“The demand is there based on the population growth and they have recognized that they need to change in order to fit within the urban concept,” he said.
RioCan submitted a re-zoning application in February with supporting reports that is currently being reviewed by city planning staff.
If everything goes according to schedule, a timeframe that includes the release of a staff report at the end of this year and support from city council, the developer could start work on the site in the late summer of 2014.
Robins said RioCan will likely not be finished with urban development, regardless of how the Bathurst project turns out.
“We are always looking and we think there are a lot of opportunities in Toronto,” Robins said.
The real estate company was originally attracted to the Bathurst location because it already had the multi-use zoning that would support its development.
“Can you imagine how much trouble we will have developing a site that is not designated mixed use commercial and not zoned mixed use commercial in light of the difficulty we are facing? It again shows you that it is really difficult to develop in the city of Toronto today.”