Wander just about any downtown Victoria street these days and you’re bound to notice one or two empty storefronts.

Worrisome? Yes. But experts say the number of papered-over windows is not on the increase. They say downtown is not in a death spiral, but actually holding its own.

“It’s something that’s very visible, obviously. I walk downtown and I see more and more storefronts that are vacant,” says Dave Ganong, managing director of Colliers International. But, he said, the impression that closures are on the upswing doesn’t necessarily reflect the reality.

According to the latest Colliers market report, the number of empty retail storefronts in downtown Victoria decreased slightly in 2012 to 7.1 per cent from 7.4 per cent.

“I think what’s happening in the retail sector downtown is it’s just a tough, tough market,” Ganong said.

Downtown Victoria is facing stiff competition from every corner. The Colliers market report notes that with the emergence of the Uptown shopping centre in Saanich, other shopping centres are making significant upgrades to remain attractive. Broadmead Village, Hillside Mall and Tillicum Centre have all started major renovations.

And they’re attracting major tenants. Hillside has announced Marshall’s, Target and Atmosphere. Joe Fresh, H&M and Forever 21 have opened at Uptown. Mayfair brought in Banana Republic.

“There are holes in downtown Victoria that could accommodate those tenants and they’re not coming here,” Ganong said, adding that it’s hard to remember the last time a national tenant announced it was locating in downtown.

Dale Olsen, owner of Outlooks for Men at 534 Yates, is not surprised that the chain retailers are locating in malls, where he speculates they are being lured by attractive lease rates. But there’s no denying the vacant storefronts on lower Yates near his downtown store. He says it’s nothing new.

“Definitely, there’s a cleansing going on. The weak [retailers] are going,” said Olsen, who has operated in downtown Victoria for 22 years.

“It’s not the first time [the market] has ever done this. People always forget on my street that spaces that were vacant for two years as they were renovated are now full. Then it just emptied out a little bit down the street.”

Downtown Victoria’s street-front vacancy hit a low of below three per cent in 2007-2008, then steadily increased again to 7.4 per cent in 2011. The 10-year average is 5.9 per cent.

Still, of all the downtown issues — from aggressive panhandling and public urination to parking and public safety — retail vacancy is the most troubling, Olsen said. “If you didn’t have vacancies — half of those things would go away. The panhandling and the street people, they like vacant buildings and empty spaces. They don’t park out in front of stores that are busy and active. They move along.”

Most agree downtown’s future rests with niche retailers providing strong service and specialty products. But both Ganong and Bev Highton, owner of NAI Commercial, say the high costs of doing business in the downtown make it difficult for the small-business owner to survive.

“I think one thing the city really has to look at is how much of the load for property taxes are they putting on the backs of the retail and commercial sector in the downtown core,” Ganong said.

Highton agreed.

“Everybody wants to put the best spin that they can on it, but we do recognize that tenants are having a very difficult time in the economy we’re confronting today,” he said.

Acting mayor Chris Coleman says the health of the downtown is always worrisome and that council is doing its best to shift the tax rate so that retailers aren’t shouldering an unfair burden.

“You’re always worried about competition and vacancy rates. You always have to make sure that downtown is set up to thrive and it’s been tough — and not just in Victoria,” Coleman said.

Coun. Shellie Gudgeon, a downtown restaurateur, thinks the future for downtown Victoria is bright and rests with small specialty retailers.

“I think we’re in a surge of change and now the new model is one of providing excellent customer service and expertise,” she said.

And the bright light on the horizon is that five major condominiums are now under construction.

“That’s going to help so much. The density is going to feed these specialty stores,” Gudgeon said.

Olsen agreed. “It’s a long, slow process but nothing would fix up our downtown more than more people living downtown,” he said. A healthy downtown, he added, is good for the entire region. “Victoria needs it. Our economy is tourist-based. People come here to wander the quaint streets. They don’t come here to get in their cars and go to big-box stores.”

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