December saw a flurry of news reports both in print and television on the City of Port Phillip’s initiative to encourage new businesses to Acland Street through a rent assistance programme. The programme is to target 5 to 10 businesses in Acland Street for up to 12 months. Let’s hope this new initiative goes a long way to attract new vibrant businesses and revitalise Acland Street.
Port Phillip Matters has been advocating for a renewal programme for many years in Acland Street, including a masterplan for all the CoPP retail precincts. A masterplan creates consistency and sensible long-term planning and investment in our retail hubs throughout Port Phillip. Sadly, we do not have one.
Finally, however, the CoPP appears to be getting its act together and acknowledge that there is a major problem in Acland Street. And with the highest retail vacancy of any strip at 27.5% in the last twenty years, you must ask what took them so long to do something?
The rental assistance programme comes off the back of a similar exercise done in Fitzroy Street, which Council claims has had positive results. While any initiative that can renew Acland Street is to be welcomed, we should also strip away the ‘spin’ by Council of the benefits of such a programme. If we look at the Fitzroy Steet experience, the conclusion drawn is one of mixed results.
As one business owner in Fitzroy Street stated, “It was refreshing and cute to have some of these ‘cottage’ businesses in the first year of renewal but some of these ideas were like something one would see as a large school fete and didn’t really have legs to sustain a commercial business”.
As the programme winds down so do many of the businesses stuck with the reality that their business cannot survive without cheap or non-existent rental arrangements. This appears to be the case in Fitzroy Street. The subsidy dries up and so do many of the businesses reliant on that subsidy.
The reality is that if these businesses are not viable enough long term, that is able to pay their own way, they will be there only if they are subsidised and no more.
An Officer of CoPP has spruiked the idea that the programme should be targeting a diverse and eclectic group of businesses to improve the shopping experience and importantly not act in direct competition with existing retailers. While this in theory sounds promising, market forces determine the long-term viability of a business and where they operate from. That is, the offering must be strong enough to survive post-council subsidy, otherwise it’s just a short-term burn of valuable targeted rate payer money.
Similarly, we should always be careful about interfering with market forces especially with subsidies which often create sub-optimal business acumen. Experience in Fitzroy Street suggests that an effective no cost rental arrangement meant that subsidised retailers had not the same incentive to open at regular hours, especially on cold days. Nor did many of the subsidised businesses feel they had to take responsibility for marketing their retail businesses. Real world business was substituted for a social workshop construct.
The point being is that any new business chosen for the subsidy scheme, should be selected on commerciality and long-term viability.
Finally in the flurry of news, we saw all sorts of reasons furnished for Acland Streets problems from high retail rentals to Covid 19. The reality is that much, if not all Acland’s streets problems, relate to the forced introduction of the tram mall which overnight stifled traffic into what was once a thriving retail hub - a decision that CoPP must also wear responsibility for. Some Councillors gloss over this inconvenient truth, blaming high rentals for the vacancy rate, ignoring the fact that rentals for most vacant shops in Acland Street have fallen 40% plus from their highs.
Message to Councillors
The programme is a good start if properly managed, but it’s not the panacea for Acland Street. An overarching long term master plan for all our retail strips is where CoPP should be focusing on. The current initiative may however, look good on your CVs in an election year and cover a few of the cracks in Acland Street.
Sadly, for the estimated $200,000 being spent on this initiative in a Council war chest of over $160 million, it’s small beer and won’t stop the usual suspects among you wanting to push up our rates further in 2025. That’s a given!
