A co-working space co-founded by former municipal councillor Susan Chapelle will soon close.
Chapelle, who now resides in Toronto, told The Squamish Chief by phone on May 13 that a rent increase triggered the closure of the not-for-profit enterprise.The space was originally founded to provide sorely needed employment space in town, she said.
"One of the recommendations in our economic development plan was to open an economic accelerator to support small businesses," she recalled.
However, Chapelle said that the municipality was too slow to act on that idea under the council of the day — which she was a part of.
"So then Zanny Venner and myself decided that we were going to open a not-for-profit to help small businesses and women, in particular, share resources and have an affordable workplace in Squamish," she said.As a result, the downtown co-working space called Aligned Collective was born, and, by Chapelle's count, has been home to 30 members, many of whom operate their small businesses in the facility."For $249 a month, you get a desk, you get a printer, you get all your resources, you get morning coffee, plus, the community that we built was incredible," she said. "And we hosted events and education seminars for finance for small businesses."
However, the increased costs of running the co-working space have forced Aligned Collective to shut down.
The not-for-profit recently announced it is closing its offices by June 30, 2022.
When asked for comment on the matter, municipal spokesperson Rachel Boguski issued a written statement from the District of Squamish. It acknowledged that securing employment space amidst rising lease rates is a challenge the local business community faces."The District's economic development department is focused on supporting all businesses with access to infrastructure, programs, and services," reads the statement. "The District is open to proposals — though has not received any to date— to deliver business services, including accelerators, incubators, and innovation-oriented programming and will review those as part of its strategic planning process."
According to Chapelle, rent was initially $10 per square foot, but under triple net circumstances — which required the business to cover expenses like property taxes, management and insurance — the price wound up at $15 per square foot.
However, the landlord, Ammi Tepper, told The Squamish Chief that Chapelle's original contract was $12 per square foot, which was $3 per square foot less than the market value five years ago.As of late, the bill has increased.
Chapelle said she believes zoning changes drove up valuations, and, therefore, property taxes, which were then passed down to Aligned Collective.
"So our taxes [almost] doubled in one year," Chapelle said.
The District, however, says zoning downtown could not have anything to do with the increase.
"This statement is false," reads a statement from the municipality. "Recent development along Second Avenue has occurred under the existing C-4 (Downtown Commercial) zoning, which has not changed. Therefore, this area of downtown has not been the subject of rezoning applications that have resulted in increased density or additional land uses."
The District says the increase in property values solely reflects market transactions, which are the basis for BC Assessment property valuations.
"The increase in property values is not the result of rezonings (which have not occurred)," the statement continues. "The District, along with other local governments, has lobbied the provincial government to change its assessment process or find other ways to provide relief for small businesses with triple net leases in downtown centres. Developing a solution is complex, but we understand the work at the province to address this issue is ongoing." As Chapelle tells it, Tepper at first offered a new lease rate of $23 per square foot.She said Tepper then reduced it to $19.50, but also downloaded the responsibility of maintaining the HVAC system to Aligned Collective.When told about Chapelle's account, Tepper said in an email to The Squamish Chief that the rent increased, but that the uptick could've been higher."We have increased the rental cost, but [it was] less than market value to try and keep Aligned Collective in business," wrote Tepper."The issue is that costs all around inflation, property tax and operating costs have increased dramatically in the past five years."
He said that his understanding was that Aligned "did not perform well," and said that at least part of the blame may lie in its business planning.
"The opportunity for business in Squamish is amazing," said Tepper. "But being a business person is paramount to any business succeeding. Market research is important to conduct prior to opening a business."One thing that both parties agreed on was that there is very little employment space in Squamish."It seems [for] every business that closes in Squamish, several new ones are looking to open," wrote Tepper. "Squamish is in the middle of a growth spurt."Chapelle voiced a similar thought.
"There is a complete supply and demand issue," she said. "When you have no economic development supply, then rents go up, and, so, we're paying more."
However, while Tepper maintained that there is still much opportunity for business in Squamish, Chapelle said that depends on what kind of business."100% of the economic development in Squamish is focused on residential development," said Chapelle. "You're either a developer or a builder, or a tradesperson, or a real estate agent. And you can see that happening on our main street is that it's mortgage brokers, it's always people that are moving in, and they can afford to buy. The residential real estate trade is what is funding Squamish right now. [But] where are professionals going to work? This council has used up all the land for economic development."In this case, the District again disagreed with Chapelle's impression."This council has protected key industrial land from residential development, fast-tracked commercial-only buildings through the development process, incorporated employment space into sub-area and neighbourhood planning, initiated a project to examine marine zoning and access and tasked the economic development department with developing tools and policies to ensure we match residential growth with employment space development," reads the response from the municipality.
Some examples the District cited were increasing commercial and office space requirements in the Downtown Commercial Zone; adding employment space requirements in the lands surrounding the Squamish Business Park, and designating mixed-use and light industrial lands in the Loggers East neighbourhood plan.
