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mixed-use developments

A bustling Loblaws has grown up at the bottom of a boutique seven-storey condo development at Queen and Portland streets in Toronto. Increasingly, developers are trying to make grocery stores part of their mixed-use developments right from the beginning – rather than an afterthought.Jennifer Roberts/The Globe and Mail

Across Vancouver, mixed-use development – especially ones with specialty food markets or full-service grocery stores on the ground level – are popping up like mushrooms after a spring rain.

Condo purchasers want a new kind of lifestyle – one of convenience. As living space shifts downtown, municipalities are shedding old zoning models in which homes were placed in one spot, retail in another, industry in yet another, and everyone drove from one to the other. In Toronto, the movement is ramping up. In Vancouver, where space is at a premium, it's rampant.

Yaletown was a decaying industrial area before Vancouver designated it as a mixed-use residential-commercial hub and made it a priority for redevelopment in the late 1990s. First, a highrise condo went up, then Choices Markets Ltd. won the lease to provide groceries in a structure adjacent to the residential building.

"The original developer approached us for tenancy as both a means of providing service to the neighbourhood and adding a selling feature for their condo development," says Tyler Romano, director of marketing for Choices, a retailer known for natural and organic foods.

The developer approached national chains, but at the time they did not have a format for a grocery store with a smaller footprint. Choices won them over with plans to stock the shelves in only 11,500 square feet, a 10th of the size of a suburban big-box grocery store.

Over the past 13 years, as at least 15 condo towers were added, the area has morphed into a vibrant, upscale oasis, "a perfect fit for our brand of socially conscious, community-minded green retailing," Mr. Romano says. "This works perfectly for the car-less urban dweller who adheres to the two-bags, six-blocks shopping pattern."

The grocer has adapted its offerings for the clientele – many of them younger single people and busy professionals who want to pick up dinner right where they live – with grab-and-go items from the salad bar and deli making up a high proportion of sales.

"It's unbelievably convenient when it's nine o'clock at night and all you have to do is go straight down the stairs and walk into a store and grab products," Mr. Romano adds.

The retailer practices good-neighbour policies, daily removing garbage, recycling and compost separately from the condo building. Delivery times are mostly kept to between 7 a.m. to 2 p.m. "The occasional neighbour will complain about the noise," Mr. Romano allows. "Complaints aren't frequent and are to be expected in a downtown core."

In Toronto, grocery was always part of the plan of the massive Concord CityPlace development which, when complete, will be home to 20,000 people. Tucked in a downtown corner off Spadina Avenue, a vibrant 20,000-square-foot Sobeys grocery store offers benches outside for patrons to take the sun, with a flower shop up front.

"It's quite quickly becoming the heart and soul of CityPlace," says Gabriel Leung, director of development for Concord Adex. "Financially, if we could have landed a retailer sooner, we could have leveraged on that and included it in our marketing materials. People always appreciate these kind of things in an urban centre."

The developer worked closely with Sobeys on merchandising and even the store front.

"A lot of retailers are very inside focused. You end up seeing a lot of boxes and things stacked up against the windows or sometimes posters, too, that block the view. . . but we insisted they couldn't do that," Mr. Leung says.

Concord Park Place, the developer's second Toronto highrise neighbourhood at Sheppard and Leslie streets in Toronto's North York area that will boast 10,000 units when complete in 2018, does not yet have a grocer. "We've been talking to a few other mainstream operators," Mr. Leung says, adding that it takes a long time to negotiate with national chains.

Back in central Toronto, Loblaw Cos. Ltd. has strategically brought its brand to several locations. At Queen and Portland streets, a bustling Loblaws store has grown up at the bottom of a boutique seven-storey condo development.

Originally, though, the grocery store was not part of the plan. Home Depot Inc., which had wanted to get closer to the downtown condo market, had signed a lease agreement with developer RioCan Real Estate Investment Trust, but when the economy in the United States sharply contracted in 2008, the hardware giant was forced to lay off employees and close stores. It broke its lease with RioCan. Almost immediately grocery stores lined up to fill the vacancy.

David Speigel, vice-president of operations at Tribute Communities, which partnered with RioCan to work on the residential portion of the project, recalls welcoming the switch to a grocery store. Tribute wasn't keen to have residents live on top of a hardware store.

"It wouldn't have the same allure for some people." A Joe Fresh clothing store and Winners were subsequently added to the mix.

Mr. Speigel thinks residential can co-exist right next to retail – although mixed-use planning is more complex and there are few developers with the expertise to construct both. "It becomes very complicated because you have floors that are servicing both retail and residential."

A small development, epecially, makes more sense financially when combined with retail stores beneath, Mr. Speigel said. "It's less important when you have a 40-storey building; the retail at the bottom of it becomes less significant."

He maintains downtown condo buyers are happy to live above the grocery store. He even knows of one, happy to wander down to the store to grab his dinner in his "boxers and flip flops" on a cold winter day.

Studio bank branches

Across the country, banks are also seizing the condo opportunity. In May, the Bank of Montreal announced the opening of a smaller studio branch in Montreal that will employ just four bankers located on the ground floor of the ZUNI condo building at 109 Chemin de la Pointe-Nord on Nuns' Island.

The studio branch is part of a residential and office development "right where customers have told us they want to do their banking," says Paul Dilda, head of the North American branch channel for Bank of Montreal. He adds that the concept may be expanded into other urban markets on the continent, including Toronto and Chicago.

Out west, the bank opened a small, flexible branch two years ago in the newly fashionable district of Lower Lonsdale, a Seabus trip away from North Vancouver. Formerly a down-at-the-heel location, the area has experienced a burst of population. "There was this huge demographic shift, and our market research people saw that if there was a high enough density of population, we want to get back into the neighbourhood," says Laurie Grant, a spokeswoman for the Vancouver branches.

The condo building is eight storeys high; the 2,200-square-foot bank has eight employees and is open seven days a week. It's a versatile bank, with financial planners or brokers or private bankers who are rootless – they might borrow a generic office to see a client and then set off to meet a client at another location.

Ms. Grant says a symbiotic relationship exists between the bank branch and the condo buildings atop it. "We're a very good client. We're quiet at night. And there's such a convenience in having your cash right there if you need it. Or you can just pop in and see a banker."