Thorunn Howatt
Northern News Services

Yellowknife (Jan 23/02) - Commercial renters face a vacancy situation that is as patchy as Yellowknife's roller-coaster economy.

The federal government is proposing to build a new office tower on Franklin Avenue, while some downtown malls are dotted with vacancies.

"It's two different types of space," said downtown's Centre Square Mall general manager, Jennifer Marchant.

While Centre Square is primarily a retail mall, the new building will mostly be used for office space, said Marchant. "There is so little office space in town now that the vacancy rate is almost considered zero."

Despite the shortage of office space, Centre Square Mall's 40 retail locations are more than 20 per cent vacant. Upper-mall locations are managed by the Yellowknife Inn conglomerate while storefronts in the lower mall are managed by Centre Square's Humford Management Inc.

"Southern retailers do not see the benefits of coming to the North," said Marchant. And while malls rely on southern-based franchises to help fill storefronts, those same retailers are looking at the problems of doing business in Yellowknife, such as a labour shortage and high wages and shipping costs.

"Also the economy in the south isn't as healthy as ours is, so the yardstick used to measure the economy is based on Montreal, or how good is Toronto," said Marchant.

National retailers underestimate the Yellowknife economy, she said. On the other hand, smaller independent businesspeople often don't want to take the risk attached to a long-term lease and business plan.

Yellowknife has about one million square feet of office space. About a decade ago, territorial- and federal-government downsizing left a 16 per cent vacancy rate in the city. But with the growth of the diamond industry and a revitalization of government activity, space was gobbled up.

Still, Marchant resists the urge to convert retail space to offices. "This is supposed to be a retail mall."

Retailers want to be located close to other retailers, she said.

"Busy begets busy," said Shawnette MacNeil, manager of the Yellowknife Inn's portion of Centre Square Mall. The upper mall has only one vacancy. Retailers want to be located in high pedestrian traffic areas. The new office building proposed by the federal government will be a boon to the downtown, said MacNeil. "It's going to positively affect us. There will be more shoppers downtown."

And with the long Yellowknife winters, she is sure shoppers will want to escape the cold and stay within the mall's warm walls.

After working at the SoapBerry Shop in Centre Square Mall for about six years, Honeylet Robertson wanted to buy the store. She couldn't afford the more than $3,000 per month rental cost in the mall. She found out about Igloo Plaza and now pays only a little more than $600. She is just one example of retailers moving away from downtown malls. Many other businesses have moved to different shopping areas like the Range Lake-Frame Lake area, close to Wal-Mart or the Old Airport Road area where Canadian Tire moved.

Retailers are spread out over the city's expanse and the move away is a common reason why the downtown core could suffer.