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Ossington Avenue, once known for karaoke and crime, is now a coveted Toronto artery that is undergoing change. (Fred Lum/The Globe and Mail)

There are two hours left until Shinola’s flagship Toronto store opens. A dozen or so 30ish professionals waltz around the Queen Street West and Ossington Avenue shop, phones in hand, making sure everything’s perfect. A man in his early 20s wipes down the glass encasements covering Shinola’s many wares: watches, wallets, leather-bound notebooks, all carefully crafted, all ostensibly – as the brand’s slowly disappearing slogan goes – built in Detroit.

Daniel Caudill walks in the door moments later. It’s 9:10 a.m. He looks tired. He was up by 4 a.m.; he just drove here from Detroit. He glad-hands a bit, talks with his newest employees, and an account executive introduces us.

We sit down on a pair of vintage brown leather chairs that were also sourced from Detroit, and Shinola’s creative director explains the brand’s growth from made-in-America watch company to luxury lifestyle brand.

“The very first conversations about the brand were about building that watch factory in Detroit,” he says. “And even today, everything we do, we grade ourselves against job creation and creating jobs, sustainable jobs. So that’s just the base of what we were built on; it’s what we believe in. And then after job creation is quality of product.”

In five years, the Shinola brand – which was adopted from a legacy shoe-shine business in 2011 – has become a marketing success story, a symbol for America-made authenticity, with 375 employees in Detroit alone. The Toronto shop is the company’s 16th standalone store.

Shinola has located its Toronto flagship store at the intersection of Queen Street West and Ossington Avenue. It's the company's 16th store overall. (Scott Norsworthy)

The story of how it got here is worth scrubbing the polish from.

To bolster its authentic veneer, Shinola hunts out creative spaces for its flagships. Before settling on this building – 1000 Queen St. W., the former home of Stussy Toronto and a onetime pop-up shop for the rapper Drake – Mr. Caudill says the company almost settled on an old bank, but it didn’t have the desired ceiling height.

“With all these different product categories, we change the store around,” he says. “We look for spaces that are either open-floor plans or that have multiple rooms.” He gestures across the room to a little alcove that showcases Shinola’s ever-expanding women’s lines.

The alcove wasn’t always attached to the store. Until last December, it was home to a tiny but beloved iteration of Toronto’s Sam James Coffee Bar, with no seating except for a heated concrete stoop; the rest of the building Shinola now occupies was dedicated to a clothing store, Stussy.

When Mr. James found out he was being evicted, he affixed a sign on the door thanking customers and chastising the newcomers with an expletive. On social media, some called out the bring-local-jobs-first Shinola for kicking out a local business.

The reinvented Shinola brand began about five years ago with watches at a Detroit factory. (Scott Norsworthy)

But that’s not exactly what happened.

Mr. James declined to comment for this story, saying he didn’t feel like any more mudslinging; he’s more than happy with his new shop a couple of blocks away, across from Trinity Bellwoods Park. But the commotion his eviction caused sheds light on just how much Ossington – an artery once known for karaoke and crime – is now worth to commercial landlords and the tenants they entice. Like, say, Shinola – which is happy to be there, but is certainly paying far more for rent than its predecessors, Sam James and Stussy.

From August 2012 through December 2014, the building was owned by a numbered company run by Matt George, who handles the Stussy brand in Canada. According to land registration documents filed with the province of Ontario, Mr. George sold the building to Hullmark Developments Ltd. for $3.1-million – a 56-per-cent rise over what he paid upon buying the former sewing-machine shop in 2012.

Mr. George is an acclaimed streetwear entrepreneur who’s worked with many brands and run shops including Goodfoot and Nomad; he told The Globe and Mail that he chose to sell the building because the area had lost its appeal to him. “I approached Stussy with a plan to change up the location and once they were on board, I put the building up for sale,” Mr. George writes in an e-mail.

As it growths, watch maker Shinola is expanding its line of products to include other luxury goods, including a women's line. (Scott Norsworthy)

The very profitable sale, however, meant the Queen and Ossington Stussy couldn’t remain open until a new one was ready. “The rent was higher than made sense for a Stussy store,” says John Sommer, the company’s vice-president, by e-mail.

And Hullmark, seeing an opportunity to rent the whole building to one tenant for an attractive lease, rather than split off Mr. James’s alcove, did exactly that.

“When we bought the building, there were termination rights in place,” says Aly Damji, Hullmark’s vice-president of commercial real estate. The company saw fit to rent out the whole space, rather than subdivide it. “In all reality, no one had evicted anybody. It was simply that the landlord exercised its rights to terminate the tenant to bring in a larger tenant.” And Mr. George, Mr. Damji says, “sold it to us at such a number that it would have been tough to not get the rents that we did.”

Mr. Damji says he gave Mr. James many months notice to leave. But his removal, and the signage he put up as a result, put Shinola in an awkward spot at a time when it was already fighting PR crises on multiple fronts: The U.S. Federal Trade Commission, noting that parts of its watches are Swiss-made, has been arguing against the use of Shinola’s “Built in Detroit” claims, which seem to be slowly disappearing from Shinola’s official branding.

And its small-business reputation has been challenged in the media, given that founder Tom Kartsotis had previously founded the Fossil Group Inc. brand of watches and accessories, with annual sales routinely worth billions of dollars.

Seated in the hours-from-opening Shinola shop, Mr. Caudill says, “He was chairman of the board, stepped down as chairman, is no longer involved with Fossil at all,” Mr. Caudill says. (His brother, Kosta Kartsotis, remains Fossil’s chairman and chief executive officer, however.) “People think that this is a big giant company, but this is really a small startup.”

And Mr. Caudill says that the Sam James debacle made company execs uncomfortable, too: “If we had known ahead of time that that was a problem, we probably wouldn’t have taken the space.”

Today, the biggest concern at 1000 Queen West seems to be making sure the store’s glass cases are buffed to perfection to show off watches like The Canfield, the just-released model Mr. Caudill is wearing today, complete with American Alligator strap.

More than half a year after Mr. James left the space, almost everyone involved seems happier – Stussy will open a new Toronto store in September, Mr. James likes his new shop on the park, and Shinola is settling into Queen and Ossington. The real estate drama is over, but it has revealed the bigger narrative to come: The cost of doing business on Ossington is only going up, and no store is safe from market forces.

A tale of two Ossingtons

Matt George fell for Toronto’s Queen Street West and Ossington Avenue area back in 2000, passing by it daily. It had everything that excited him about Toronto: galleries, a few bars, Portuguese mom-and-pop stores. After expanding his retail empire to 14 stores across Canada, he was able to buy into the area a decade later. There, at 1000 Queen St. W., he opened a Stussy apparel shop with a Sam James Coffee Bar next door.

Two years after opening, in 2014, things changed. “Business on the Stussy and Sam James side was great, but market rents were almost double from 2011,” Mr. George says. “Condos were taking over the more interesting tenants, and it seemed like most of the all the great bars and restaurants that opened up were now servicing a different customer than before.”

When Stussy agreed to move, he says, he put the building up for sale. Hullmark Developments Ltd., which now owns buildings all around the Queen and Ossington area, saw opportunity in what turned Mr. George away.

The developer was happy to buy into the changing community, and have even bought ground-floor retail space in two Ossington condo buildings. Aly Damji, vice-president of commercial real estate, is careful to point out that his company is trying to preserve some of its character, inviting murals onto their buildings and a gallery/pop-up space by Hermann & Audrey.

“What we’re trying our best to do is ensure that as an area gentrifies and turns, it doesn’t lose its roots,” Mr. Damji says.

With files from Rick Cash

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