Shopping Hub Redevelopment — the Gains and the Losses.
Zellers is out, Target is in. Hillside Centre is in the midst of an $80-million renovation and expansion that’s earning it new fans and raising some questions about its loss of local businesses.
Over at Hillside Centre, one of Victoria’s busiest shopping hubs, a long-anticipated redevelopment is causing big ripples in the community and with shoppers eager for the new shopping experience. The 431,000 square-foot mall is in the midst of a $80-million renovation and expansion; hallways are sectioned off, workers are puttering around, buildings are being torn down.
Really, it’s a potential disaster for customers — and for store owners. But thanks to some smart ad campaigns and family-friendly touches, like free plastic construction hats for kids, it’s business as usual at the mall, which originally opened in 1962.
“The primary challenge on this project from the contractor’s perspective is working adjacent to an active retail space while not impacting the mall’s merchants,” says Chris Chalecki, Victoria branch manager for Kinetic Construction Ltd., which has been contracted, along with joint venture partner EllisDon, to carry out the renovations.
Renovations started in the spring of 2012 and will last about 18 months. There will be 80,000 square feet added on the east side of Hillside (where Shoppers Drug Mart is); Zellers is out and Target is coming in; a second floor will be added in select areas; and the food court will double in size, expanding towards Shoppers Drug Mart.
Some significant new tenants moving in are SportChek/Atmosphere, Target, fashion boutique Boathouse, Smart Set, Reitman’s, Nygard, and fashion mogul Marshalls.
The mall, which has around 100 stores, is anchored by Thrifty Foods, Bolen Books, Sears, and Zellers (to be replaced by Target). The outside of the mall and the lot that it’s on are also going to see some serious changes.
“The landscaping is going to be incredible and the exterior is going to be great,” says Don Burton, executive vice-president, retail, at Triovest Realty Advisors, which manages the mall. (Hillside is owned by the Canada Pension Plan Investment Board.) “You’ll see lots of different finishes, from natural stones to wood. It’s going to be the best-looking shopping centre probably on the island.”
{advertisement} Signs of the Times
But it’s not all window dressing. The new look of the mall will, in keeping with the times, be a significant shade of green. Not literally, but in a manner of speaking: no small amount of money and effort will be going towards making the mall more environmentally friendly (see page 28).
“Green features are really a reflection of the values of Victoria,” says Victoria Mayor Dean Fortin. “Everything from Hillside’s plantings to the storm water control, how the buildings are built, and greater energy efficiency … It reflects the values of Victoria: we really have a green ethic here.”
Going green is a sign of the times. And Hillside was in need of an update. Although, to many people, the building had a comforting, familiar look, oftentimes “familiar” really just means “old.”
Dallas Gislason, economic development officer for the Greater Victoria Development Agency (GVDA), says Hillside’s status as a staple in the neighbourhood for over 50 years proves two things: it’s important to many area residents, and it’s time for some reinvestments.
“Hillside remains an important part of the daily lives of many people,” says Gislason. “But the fact is, it’s 50 years old …”
Targeting Change
One of the biggest changes going down at Hillside is Target replacing Zellers. In January 2011, Target made big Canadian waves when it acquired lease rights for 220 Zellers locations from the Hudson Bay Co. for $1.8 billion. Locally, it acquired the rights to the Tillicum and Hillside Zellers locations.
Sears isn’t concerned about the potential Target competition, says Vincent Power, divisional vice-president, corporate affairs and communications of Sears Canada. He says Sears is going through some changes under Calvin McDonald, who joined the company as CEO last year; these are changes (in product, marketing, internal behaviour, and customer service) that would have happened whether Target was moving into Hillside or not.
“Competition helps make us all better,” says Power. “When someone of any magnitude comes into the marketplace, we all raise our game and intensify the fighting spirit to ensure we are offering customers a value proposition that differentiates us and creates loyalty. We see any competitor that comes into Canada as someone we have to watch, and someone who customers may like to visit even if it’s just to see what they are all about.”
Interestingly, Target will have its food supplied by Sobeys, which seems a bit odd at first, considering that Thrifty Foods, located right next to where Target will be at Hillside, is a division of Sobey’s. But Ralf Mundel, Thrifty Foods director of marketing and communications, says the setup isn’t as strange as it seems.
“While our agreement to supply Target may be seen as unconventional due to its perceived competitive nature, we currently already supply over 50 independent grocers in B.C. So really, it’s not as unconventional as one might think,” says Mundel. “No different than the other grocers we supply; retail pricing decisions at Target are theirs alone.”
Hillside Zellers is about 75,000 square feet (the Tillicum location is approximately double that size); Target requires twice that size to accommodate its groceries and other retail items, so a second story will be built. Target is aiming to open in March 2014.
Locals On The Line?
As with any redevelopment, there are always those who feel they are victims of change. Ted Vermeulen, owner of Specht’s pet store, formerly located at Hillside Centre, says he was shocked when his lease wasn’t renewed last year, considering that the store had been in the mall for about 35 years.
“Walking through the mall, [what they’ve done] is they seem to have diminished all the local businesses and picked up leases with national ones,” he says.
“Hillside used to be known as the local mall. That’s where you could meet the president of the company because they were standing behind the cash register. And any money made by those businesses stayed in Victoria.”
Mace Porcher is the owner of Island Ink-Jet & Laser Toner’s Cedar Hill and Westshore locations. The Cedar Hill location is new; the company had to relocate there when Hillside wouldn’t renew its lease for a kiosk in the mall. Porcher says they were told there was “no space” for them anymore.
“We would have taken any space they had. We would have moved our kiosk anywhere. We brought in thousands of unique customers to the mall that came in just for our service.”
But Triovest’s Burton denies local businesses are being pushed out. He says they sat down and discussed matters with all tenants. “It’s just a natural evolution; it’s not due to the renovation,” he says about local businesses not having their leases renewed.
“Leases expire and those good operators that continue to cater to the market, they’ll continue to be viable and thrive, and the ones that don’t, they’ll leave. We’ve talked to all of them and some want to stay and some don’t.”
Mark Besner of OTfitwear, another business that didn’t get its lease renewed, says the mall recently offered him space back. Due to costs associated with starting up a store again, at the time of writing this, he had no plans to return. He feels without the local touch, the mall is alienating long-time customers.
“The locals were pretty perturbed about the whole situation,” he says. “That’s the reason they shop at Hillside, the
independents; now it’s another footprint of corporate Canada.”
Besner has a downtown location of OTfitwear; Vermeulen has a second pet store, Safari, which is still operating; Porcher moved Island Ink Jet to the storefront location on Shelbourne. Garry Dhillon wasn’t as lucky. He was the owner of Aspen’s Clothing Company, another local company who did not have its lease renewed. Hillside was his only store and, as of now, he hasn’t started up at a new location. “I wanted a long-term lease,” says Dhillon. “I was there for 13 and a half years.”
Dhillon echoes the sentiment that the mall has lost its local flavour. “It sure seems like a corporate feel if you go in there now with some of their new retailers coming in,” he says. “Go through it yourself and tell me if anyone’s a local or independent.”
The Bottom Line
Local businesses may have complaints but as far as local government is concerned, the mall owners have done a bang-up job getting community input. “The mall owners have been outstanding in their community consultation,” says Victoria Mayor Dean Fortin.
“They’ve really gone out there and recognized that they are part of a community and talked to them and worked with them to develop how this mall is going to work.”
Burton says he feels Hillside is very special, and part of the reason is the community involvement. Triovest owns regional shopping centres Canada-wide, and Burton, who works out of Ontario, says the company works closely with community to create what they want in their shopping centre. “I think they’ll be happy with the end result,” he says.
The money the construction aspect of the redevelopment is putting into the local economy is nothing to scoff at. GVDA’s Gislason says, “Our region’s economy is significantly supported by a $800-million construction industry,” he says. “Whenever an investor chooses to enhance existing structures or make them more efficient, not only is our community more desirable as a place to do business, but these projects support jobs in the construction industry — especially if local expertise is engaged in the design and production of the project.”
Mayor Fortin echoes this sentiment as he chuckles and offers up a public commendation to those involved with the money that the Hillside Centre renovation has given the Victoria economy. He says the City is happy to see the green initiatives the mall will be implementing … and the other kind of green that the changes are bringing in.
“Frankly, as the mayor of Victoria, who has to deal with budgets every year, [I want to say] thank you very much for the investment in our community and the tax revenues that flow from it that allow us to pay for the parks and the hanging baskets and the police and the fire [department] and the sewer and the water,” he says. “We’re happy to see that, too.”
Ultimately, the shoppers will determine the success of the renovations in the same way they always have — with their wallets.
