Garrett Pettie, left, owner of HOne & Strop Barber Co. and Dustine Dame, owner of Cloud City Apparel have a successful mixed business rental partnership on Third Avenue in South Port.

Garrett Pettie, left, owner of HOne & Strop Barber Co. and Dustine Dame, owner of Cloud City Apparel have a successful mixed business rental partnership on Third Avenue in South Port.

Seeds of change

Business owners are willing to think outside the box to watch the economy grow.

Port Alberni was once a boom town, with some of the highest salaries in the country.

Since then, the growth generated by that boom has been left to decay, with too few people and too little money to fill the 40 vacant commercial suites all around town.

Kevin Wright, who came to Port Alberni from Qualicum Beach in 2012 to open Steampunk Cafe and Coffee House on Third Avenue, thinks he has the solution; the Sprout small business initiative.

“The reason I came up with Sprout is because the idea is small business, in a small planter, in a big space.”

What that translates to is taking one of the large, vacant lots—of which there are 40 across the city, 19 just in the uptown area— and stripping the often old, faulty wiring to make a fireproof box.

This allows a budding entrepreneur to not only pay less rent but also renovate just a small portion of the vacant suite prior to expanding into more and more of the space when they have the funds available.

According to Wright, “this model is designed specifically for boom and bust economies and mostly around resource-based economies because that’s where the big booms come from.”

Whether it’s mining, fishing or logging, “they all have the same progression.”

In the 1940s, 1950s and 1960s, Port Alberni did well.

“Money was here so these businesses started as small business, then medium sized business and then they went to large businesses. By the time the 1970s and 1980s rolled around they were fat, oversized.”

Then the economy tanked and big businesses were the first to go.

“They had overhead, they had staff, they had large inventories.”

But because many of those larger businesses occupied their buildings for decades upon decades, the buildings became bylaw nightmares.

“For 70 years, no bylaw enforcement is coming in.”

When the old tenant moves out of that building, they can leave it in the shape it’s in with no need to bring it up to bylaw or code compliance. That’s a job for the new tenant.

“So you have these really large facilities, 2,000, 3,000, 4,000 sq. ft. The rent’s inexpensive but the renovation is mind-bogglingly high,” Wright said—anywhere in the neighbourhood of $200,000 to $400,000.

While renovations could be considered the building owner’s responsibility, Wright said it’s hard to get them to buy in.

“If you’re looking at a building that’s worth $300,000 and you’re asking them to do $200,000-300,000 in renovations and the going rate for rent is $1000 a month…you’re talking 300 months of rent before you recoup your investment. Nobody does that.”

This is where the city comes into Wright’s plan.

“The idea is that you go to the city and you come up with what you need at a bare minimum to meet the fire code, electrical code, safety, access, egress, all the stuff that you need to have.”

Although specifics would have to be worked out with each potential renter, Port Alberni fire Chief Tim Pley said that he believes that Wright’s idea has merit.

“I think it’s innovative and if that kind of a model can help businesses be viable then from a fire department perspective we would support that.”

While the B.C. fire and building codes are imposed by the provincial government and thus not optional, Pley said that if renters come to the fire department and the city early there are possibilities to work together and figure out the best way to move forward.

“Where we have an opportunity to support [business development] is that the city has code experts—the fire prevention officer, building inspector, bylaw enforcement officer—and those three with their expertise can support business proponents by letting them know where the thresholds are for certain triggers in the codes,” Pley said.

For example, “some code requirements kick in over a certain square footage so with that knowledge in hand a business proponent might intentionally build smaller than that threshold.”

However, the only way for the rent for the vacant buildings to go up is “by creating a dynamic shopping experience and increasing the flow for people to come up here and buy things.”

Wright believes that most entrepreneurs are in two age brackets: 25-35 or 50-65 years.

“The reason for that is that most people between 25-35 tend to be people who haven’t clicked into that ‘working for someone else’ model. What you have in the 50-65 area is people who have retired and become stir-crazy. Maybe they’ve always wanted to own a fish taco shop or something like that and now they have an opportunity.”

The issue with those two demographics is that they have trouble borrowing the money they need to get the often large vacant spaces rented and into proper condition.

Young people lack the track record and the equity.

“Most young people don’t have anything in equity, their credit rating is just getting started.”

The older group of would-be entrepreneurs might have equity, but what they don’t have is an income.

Sprout is set up to solve that problem. With no equity and no track record, it’s hard for banks to justify giving loans. Wright said that in speaking with a few local banks he learned that after a few years of proven success, loans are much easier to obtain.

While businesses will start small, Wright’s plan is for them to expand.

“Micro businesses are a temporary situation,” Wright said, citing Apple and  MacMillan Bloedel as two examples of businesses that started small but ended up big.

“Every major business that exists today was at one point a micro business. We need to start somewhere but my plan is not to stop at quaint little mom and pops but to build a solid foundation of diversity and independence and give this community a strong base to stand on.”

Alberni Valley News

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