FREMANTLE council may have another go at trying to use rates to force sluggish landlords to fill their empty shops.
While Fremantle isn’t alone in having a high CBD vacancy rate – it’s hovering around 19 per cent – councillor Adin Lang says the city needs to do something about long-empty shops dragging down business around them.
Back in 2013 the council’s plan to slug empty commercial buildings with double rates was shot down by a state government Upper House committee which found it went beyond its powers, but Cr Lang thinks he’s got a work-around.
He’s proposing a flip-around; raising all commercial rates, then offering 15 per cent discounts to reward landlords who’ve got tenants, a system he want introduced in the 2024 financial year.
“This would apply to properties that have been empty forever; year on year, tenancies where it looks like the landlord has got no intention to develop, sell or lease,” Cr Lang said.
Examples might include the Old Woolstores, Terminus Hotel, Jim Kidd, Hungry Jacks, Fast Eddy’s where the for lease sign is barely readable through years of graffiti, or the old Premier Pianos site where weeds are literally growing through the floor.
Although he is still working on the finer details with council staff, Cr Lang said a building empty for more than two years was in line to miss out on the discount. Those awaiting an approved development wouldn’t be roped in.
The council would also have to work out how a partially-tenanted building might be affected, and how to ensure sham leases don’t undermine the system.
“We can’t have buildings empty, because it’s setting a bad precedent for the block and it’s impacting the neighbouring businesses,” Cr Lang said.
“Rather than leave it empty, let a non-profit move in. Let a startup business move in, help grow a new business and bring more people to Freo.
Let artists use the space… sell it…. whatever, just do something.”
He says setting up the system “will require a bit of heavy lifting” and it would suck up more staff time, but he believes the benefits to the local economy will more than compensate.
Cr Lang also points out “he’s got skin in the game” as a landlord with a couple of properties in West Perth.
“I adjust the rents to meet the market, which ensures the businesses either side of my premises aren’t facing a derelict building.”
The plan also has the backing of small business incubator Spacemarket, which provides low-rent co-working spaces in a couple of buildings across the city.
Spacemarket co-ordinator Sarah Booth said her books are bursting with budding entrepreneurs who need space but can’t afford to take the risk on a $70,000 lease for five years.
“We could fill High Street,” she says.
“But I know landlords who have been approached about having someone in their building and they’ve turned them down.”
Ms Booth says this behaviour “holds hostage the economy and the morale of the community”.
She believes there should be a legislated obligation for landlords in CBD properties to make use of them “otherwise small business, residents and tourism suffers”.
But chamber of commerce CEO Danicia Quinlan sounded a not of caution.
“While efforts to push a few of our older landlords to address long-term vacancies is welcome, we are not sure it will hit the appropriate target,” Ms Quinlan said.
“For integenerational families who have owned property for a long time, the incentive just isn’t there to fill their property.
“It is about the volume of landholding and capital wealth rather than income derived for many of these families. Potential tenants in the current market also expect some contribution to fitout and other associated costs which these traditional landowners are not used to paying.
“There is also an issue with our planning schemes that define retail zoning for lower ground floors with a prescriptive definition that doesn’t allow for more creative and activated alternatives as the bricks and mortar retail tenant pool shrinks – think artists studio, creative consultancies or other alternative uses rather than retail, or another coffee shop.
“Finally, there are issues around heritage and associated costs with bringing some of our underutilised properties up to code, or to a higher commercial grade.
“That said, we would love to see those property owners and developers investing in Fremantle, and working with tenants to activate these spaces, be rewarded. It could be through local heritage or improvement grants, rate discounts or additional support to work through code issues to bring our underutilised spaces alive.”
Ms Quinlan said a chamber initiative run with Artsource to fill empty shop windows with art was a great way to lift the streetscape and she encouraged landlords to come on board.
by STEVE GRANT