Hollowed out by COVID-19 exodus, downtown Montreal seeks to reinvent itself

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For three decades, Ghyslain Anctil has been repairing shoes and leatherwear at his Moneysworth & Best franchise on the ground floor of Montreal’s Place Ville Marie, the cross-shaped tower housing law firms, tech enterprises and other companies that make up the pulse of Quebec’s business community.

This time of year is normally his busiest as regular customers such as former prime minister Brian Mulroney, now a senior partner with Norton Rose Fulbright, gussy up their footwear for the holidays and snap up new galoshes. His four-person staff is typically hustling full tilt as crowds of people stream by, many popping in to see if their orders are ready. Not this year.

“It’s very slow. Some days we do almost nothing,” Mr. Anctil said last week, adding that he runs the shop with just his son now. “I feel like we’re a sailboat without any wind. We’re just kind of floating without moving.”

Nine months since the coronavirus pandemic forced Quebec into a widespread lockdown of businesses from which it still has not fully emerged, Montreal’s once-vibrant downtown core is reeling. The white-collar workers that fuel its micro-economy, the estimated 400,000 sharp-dressers who spend millions of dollars a year in its shops, restaurants and salons, haven’t come back to the office. And that is raising fears of a permanent exodus that will cause lasting damage once the pandemic is over, turning a city centre known for its chic conviviality into a dull has-been.

After closing office buildings in the spring, Quebec announced in July that it would permit a return to them and mandated a maximum 25 per cent capacity per workplace. Four months later, however, most of Montreal’s towers sit largely empty as a vast majority of workers embrace teleworking.

The Chamber of Commerce of Metropolitan Montreal estimates the city’s office space is currently operating at less than 10-per-cent capacity and maybe closer to 5 per cent, meaning as few as 20,000 people are coming in to work every day in person. The downtown core’s permanent residents, who number barely 40,000, aren’t numerous enough to make up the shortfall of keeping other businesses running in the core. Other major centres such as Toronto and Vancouver are nowhere near as dependent as Montreal on inbound commuters and transit-takers for their lifeblood.

On the streets and in the indoor plazas of downtown Montreal, the constant murmur of voices and footsteps is gone, leaving the air filled by the shrill and sporadic bleeps of construction equipment. Everywhere there are shops and restaurants that are closed, some for now and some for good. Food-court seating has either been cordoned off or removed entirely.

In August, 26 per cent of all downtown businesses zoned for retail were vacant either permanently or temporarily. That is nearly double the 14 per cent at the same time last year, according to a recent report on the city centre published by Quebec’s Urban Development Institute. That was before Quebec tightened its pandemic protocols again in September, forcing restaurants and cultural venues to lock their doors once more after a summer reopening.

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The desperation and ennui is accelerating. A brunch spot proclaims in big bright yellow lettering “We’re OPEN!” in a desperate plea for attention. Employees at retailers from La Senza to Bath & Body Works are just milling about. One staffer at Boutique 5e Avenue, which faces a particularly daunting challenge these days selling formal wear while people are working in their sweatpants from home, preened in a mirror.

“We’re surviving” by offering online workouts, said Dino Masson, owner of YUL Fitness, a tiny but popular gym in the basement of a 28-storey tower at 1000 Sherbrooke West. The sign on his door says “Closed until Oct. 28.” The date has been scratched out and replaced by “Nov. 23.” Last Thursday, Premier François Legault said his government would maintain the restrictions until at least Jan. 11.

No one is watching the situation more closely than Chamber of Commerce chief executive Michel Leblanc, who has repeatedly evoked, during online events, his concern for the future of Montreal’s downtown core.

His nightmare scenario: The “doughnut” effect that has befallen so many other North American cities. In other words, a hole in the middle where you have few people living and few people working and staying after hours. That means lower sales for the businesses catering to the office crowd, which in turn makes the city core even less appealing. One feeds the other and then you have a structural problem, Mr. Leblanc said.

“As workers will be given the option of a hybrid work schedule over the next months and perhaps years and perhaps for the rest of their lives, we would not want people to feel that they would much rather stay at home and work from home because they fear that the downtown is not safe,” Mr. Leblanc said. “We’re very far from [that happening]. But that is the concern if we do not make sure that enough of the commercial base survives.”

Montreal’s DNA is about having fun safely in the downtown core, well into the night, at any time of the year, Mr. Leblanc said. And it’s imperative that business and political leaders make sure that everything attracting people to the city centre – all the unique cultural institutions, restaurants and hotels – remain viable and ready to reopen.

Government aid is one piece of that puzzle. Although there’s been no formal financial assistance for Canada’s urban cores, there has been general and targeted support for specific business on things such as rent and other fixed costs.

Quebec has also introduced a loan forgiveness program for the restaurant industry to help boost revenues over time and last week pledged another $65-million to help businesses that operate in the tourism sector. Downtown business owners have renewed calls for a major cut to commercial tax rates, which are the country’s highest.

Without customers, however, the prospects of recovering what is lost dims by the day. The city and local groups made a valiant effort during the summer to inject some life into Montreal’s core with a campaign called Relancez l’été, or “Jump start summer.” They’re doing other things now, such as offering free parking downtown in the evenings and on weekends, and allowing merchants to extend their store hours. There’s even a dedicated downtown street-cleaning brigade.

But unlike during summer, there aren’t a lot of obvious reasons for people living in greater Montreal to want to come downtown at this time of year, Mr. Leblanc said. Construction on Sainte Catherine Street, downtown’s main shopping artery, makes it even less attractive, he adds. “At this moment, I think it’s almost trying to convince people to do it as a form of civic duty,” he said.

The thousands of students, tourists and business travellers who feed the downtown economy are also largely absent. But it’s the office workers who really need to come back, said Emile Roux, head of the SDC Destination Centre Ville, a non-profit group of nearly 5,000 businesses located in the quadrant between Atwater Avenue and Saint Urbain Street and between Sherbrooke and Saint Antoine streets. Why they’re not returning, even in numbers approaching government-imposed limits, is a major frustration for him and other local leaders.

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“We’re facing an issue of perception” in Montreal’s professional labour force, Mr. Roux said. “Offices are safe. There haven’t been any outbreaks in offices downtown since they reopened. But the perception is different.”

Former Quebec finance minister Carlos Leitao, an economist by training, said the reluctance of some people to use public transit is part of it. But he said he believes there’s another reason: Remote working has not been the disaster many predicted. It works for the kind of financial and professional services companies and government agencies that populate Montreal’s downtown, and he believes it’s here to stay. The question is to what extent that alters the city centre in the years to come.

“We’ll have to rethink the way downtown works. We’ll have to rethink the office tower,” Mr. Leitao said. He said it’s not the role of government to force companies to bring back their staff but said the public sector could lead by example. Complexe Desjardins, for example, houses about 7,000 workers from Revenu Québec who could be recalled in numbers respecting health guidelines, he said.

Mr. Roux says reinvention for Montreal could include retailers reorganizing themselves to offer immediate in-store product pickup to attract shoppers tired of waiting for home delivery. He says downtown could also try to bring in more local tourists.

There’s also an opportunity for a much bolder remake that would transform downtown towers into more multipurpose environments while increasing the scope of their public spaces, said Carmela Cucuzzella, co-director of Concordia University’s Next-Generation Cities Institute. Think indoor parks and gymnasiums.

“The downtown core is not going to look like it looked like a year ago,” Prof. Cucuzzella said. “These spaces have to become more dynamic in their use. That is the bottom line.”

Many Montreal companies coming to the end of their leases are buying time trying to figure out what their employees want because competition for the best talent remains, said Luciano D’Iorio, managing director of Quebec operations for Cushman & Wakefield, a commercial real estate services company. How that shakes out will determine the downtown’s future. The character of the city centre is at stake, he said. “You think of some of the iconic places on the map and ... you hope they’re going to be around.”

Like others, Mr. Leitao is optimistic that Montreal’s fundamentals – all the tech companies, students and big employers that anchor the central area – will leave it better positioned than other cities. He says the real risk is that of widespread failures among the smaller businesses serving them.

“We have to be careful. Because if we let those things go, it could take years to [rebuild].”

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