Small business owners buckling under 'perfect storm' of economic conditions 

High operating costs forcing some independent business operators out of Whistler

click to enlarge PHOTO BY JOEL BARDE - PERFECT STORM Alex Relf, owner of locals' favourite Peaked Pies, is concerned about a possible 70-per-cent increase in his lease when he renews next spring.
  • PHOTO by Joel Barde
  • PERFECT STORM Alex Relf, owner of locals' favourite Peaked Pies, is concerned about a possible 70-per-cent increase in his lease when he renews next spring.

Twenty years ago, Dr. Cathy Zeglinski began practicing health care in Whistler.

An avid skier and mountain biker, she fit right in, opening her own clinic in 2005.

But late last week, the sports medicine specialist and World Cup mountain bike racer posted an emotional Facebook message saying she had no choice but to shut down her medical clinic due to the challenging circumstances threatening many small business owners.

A fixture of the community, her announcement sent shockwaves through the resort.

"Northlands Medical Clinic will close mid-September," wrote Zeglinski in the Aug. 4 post. "It has been a heart-wrenching unwanted decision I was forced to make. The economic situation in Whistler is horrible for small business."

For Zeglinski, rent was costing some 30 per cent of her $20,000 a month operating costs, and her landlord wasn't willing to budge.

"I've been there for 12 years and the landlords made no concessions," she said in a follow-up interview. "No one has any empathy. It's just 'that's your problem, move on. We'll put another T-shirt shop in this space.'"

According to a recent report released by the Whistler Chamber of Commerce, at the high end, commercial space in Whistler can cost as much as commercial space on high-volume streets in Vancouver.

Business space in and around Marketplace IGA runs between $65 and $85 (with strata fees, taxes, and other operating costs factored in) per square foot per month, while space in high-volume areas closer to the base can run as high as $140/sq. ft. per month, said the report.

And unlike in the residential market — where landlords are restricted from raising the rent by more than two per cent a year — commercial landlords can charge whatever they see fit.

It's something Alex Relf knows all too well.

Four yeas ago, he and his girlfriend and business partner quit their hotel jobs and opened their own business.

Operating out of a modern space with soft, Edison lighting, Peaked Pies has become a locals' favourite — a place where you can grab a drink and a flaky, made-from-scratch Australian meat pie for around $10.

Their product is popular, and the couple, which now employs around 40 people, recently expanded, opening a new store in Vancouver.

But despite their success, they worry about the long-term viability of their business.

Their lease runs out next spring, and their landlord wants to raise the rent — by almost 70 per cent.

"We're not sure whether we will be able to cope with the increase," explained Relf, who said that the couple is trying to persuade the owners, who live abroad, to come down in price.

"We love doing business in this town — but at what point does it become unprofitable?" he asked.

According to long-time commercial property landlord Don Wensley, some commercial lease operators are using Whistler's booming economy as grounds to squeeze their tenants.

"Their attitude is f*#@ them — 'If they can afford it, we're going to do it.' I think it's a very selfish, unnecessary attitude," said Wensley, who's rented out commercial space in Whistler for over 25 years.

According to Mount Currie Coffee Co.'s owner Chris Ankeny, one of the big issues at play is that unlike Wensley (who lives locally and has a reputation as being fair), most Whistler landlords have little connection to the community.

Ankeny recently renewed his lease, which saw his rent jump around 30 per cent.

"If it keeps jumping every five years, it will be a real question mark whether we're able to sustain it," he said.

Operators, he said, are being squeezed in two directions: The housing crisis has driven up employee salaries, and expensive rent is cutting into their bottom line.

So Ankeny is constantly checking his books, trying to determine the best way to navigate a difficult economic situation.

That said, there's only so much you can charge for a latte.

"I always want to be affordable to locals," said Ankeny. "I don't want to just price it for tourists."

Nicolette Richer, owner and operator of the Green Moustache, said that while the rental prices are challenging, she believes they are good value.

Located near Olympic Plaza, Richer said her restaurant — which costs $93/sq. ft. — gets exposure to some two million people per year and has helped her build up brand recognition.

Green Moustache recently opened up a second location in Function Junction, and Richer is currently in opening up three additional franchise locations outside of the Sea to Sky region.

Green Moustache, however, has taken a unique approach to dealing with high rent — it shares a space with 3 Singing Birds, an independent retailer.

"We would not have survived the first year without them," said Richer.

For some small business owners, Whistler seems to be on a dark path, with deep-pocketed corporate businesses displacing locally owned ones, robbing the community of the independent spirit that once defined it.

"I believe local business is what made Whistler what it is," said Relf, who grew up skiing here. "Having a large pool of locally based businesses helps maintain Whistler's original vibe, which seems to be creeping away (as) more corporate stores come in."

And while the Resort Municipality of Whistler (RMOW) has shown a desire to discourage big players from coming in (in 2015, it refused to rezone a property that would have allowed a London Drugs to set up shop), its powers are limited.

Creating caps on rental increases would lie with the province, and there would likely be major backlash if the RMOW were to acquire commercial space and then sublease it to independent retailers, effectively subsidizing them.

"If the lease rates continue to grow at the rates they are going, they will eliminate small business," said Melissa Pace, CEO of Whistler Chamber.

Pace said she wants to educate landlords on the important role that small business plays in making Whistler a first-rate destination.

Staffing, she said, continues to be an especially vexing issue for small business operators. "It's not getting better," Pace said.

For Zeglinski, who has tended to sore throats and injuries and watched an entire generation grow up before her eyes, the economic crisis facing Whistler is deeply personal — recently, despite her connections and well-paid career, she was unable to even find a decent place to live in Whistler, forcing her to move to Squamish.

The high cost of living, she said, is one of the main reasons she couldn't keep her practice open: Doctors and support staff don't want to live here — it's just too expensive.

Like others, Zeglinski is concerned about the health of the community.

"We're in this perfect storm," she said. "We're seeing more and more wealthy secondary owners who want to be in this community, but the community is imploding because people can't afford to live here.

"I think the community has to think really hard what it is trying to achieve. If we want to be Vail — an empty, soulless town — we're headed in (the right) direction."

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