Business owners and stakeholders agree that downtown Salem is at a crossroads. They all hope the road ahead is for the better. In the past year, Salem lost several beloved downtown businesses offering vintage clothes, art and meals. Some business owners say they’ve seen fewer and fewer customers downtown in recent months.  Many say a Covid-era push to support small businesses has wound down as people buy more goods online and have less disposable income due to inflation. Inflation is also hitting businesses, raising supply and utility costs. “Obviously the economy comes into play. People are less apt to support small, local business when they can just order off Amazon and be easy and be done,” said Bee Decker, owner of The Freckled Bee, which moved out of its downtown storefront at the end of June. Large storefronts, like the former Cooke Stationery Company on State Street which closed last April, remain vacant.At the same time, the area has drawn in new investments and businesses and — according to real estate data — is thriving. Vacancy rates remain low and hundreds of apartments are under construction or due to open soon. The Rivenwood Apartments are among the new developments bringing residents to downtown. (Rachel Alexander/Salem Reporter) “There’s a lot of narratives out there about staying away, but now is the time to lean in,” said TJ Sullivan, the president of the Salem Main Street Association, which works to improve downtown vitality.  Retail closures Decker has squeezed all of The Freckled Bee’s merchandise, and the machines she uses to make custom clothing, into her basement and a small building she added to her backyard. A culmination of factors led to her decision to move the baby and children’s clothing store, including rising costs and dipping revenues in the eight years she’d been downtown. That includes three in a basement space on Northeast Liberty Street and five in the large space at the corner of Liberty and State Street. During Covid restrictions, Decker would walk around the store doing video chats with customers so they could pick out what they wanted to buy and bring it out to their cars. ”During Covid we saw a lot of support for small business,” she said. “We were all thriving during Covid, even when we were closed, because people were making it a point to support small businesses.”Last year, Decker made half as much as she had in previous years, she said. Though some of that came from internal factors, she said it feels like people are turning away from local retailers. In the past few years, Decker’s expenses rose, including internet, staff wages and rent. The downtown parking tax, which charges businesses per square foot, included both her retail and workshop space, she said.“Any way you cut it, I was spending over 10 grand a month just to be downtown,” she said.Several business owners said that, after a boom in support for local businesses at the start of Covid, foot traffic has declined. They include Salem on the Edge owner Melanie Weston, whose gallery will close Sept. 28, and boutique clothing store Gatsby Gorgeous which closed in August via a Facebook post. The Freckled Bee’s former storefront on the corner of Northeast Liberty and State Street. (Abbey McDonald/ Salem Reporter) Data shows strong downtown market Sheri Wahrgren, the city’s downtown revitalization manager, said downtown’s real estate data remains positive despite a significant rise in costs for consumers and businesses“In any given year, we basically have just about as many new businesses come in as we do businesses leave,” Wahrgren said.  Newly opened businesses in the past year include Honey & Co. and Precious Pizza. Most business real estate metrics downtown are positive, said Nick Williams, a senior advisor at SVN Commercial Advisors, which keeps data for commercial real estate in Salem. Williams was previously the chief executive officer at the Salem Area Chamber of Commerce. Salem’s downtown urban renewal area, which covers 2.6 million square feet of retail, office, and multifamily inventory, has a 4% vacancy rate, he said. “Which is super, super, super strong,” Williams said. A vacancy rate at or below 5% usually indicates it’s time to build more space. Block 45 in downtown Salem is a city-owned parcel slated for redevelopment. (Madeleine Moore/Salem Reporter) Downtown Salem’s retail vacancy rate is at 3.8%, up from 3.2% a few months prior.That means that often, when a business leaves a space there’s another ready to move in. About half of the spaces that come on the market will have a new tenant within six months. Three months of that gap is usually waiting for permitting and renovations.That’s an improvement from the start of the pandemic in 2020, where the wait was over 10 months. Williams said a contributor is a low retail rent: an average of $1.79 per square foot per month. That’s less than in south or West Salem, and comparable to Lancaster and northeast Salem.“The lower lease rate is going to attract some businesses to occupy downtown. But I would say, overall, just broad strokes, the commercial real estate economy downtown Salem is pretty darn healthy,” he said.  Despite the encouraging numbers, Williams said many of his clients, mostly seeking office space rather than retail, have said they don’t want to rent space downtown because of parking and safety issues. They tend to look to south and east Salem.  City Councilor Virginia Stapleton, whose ward includes downtown, said that she understands the concerns that arise when multiple local businesses move out of downtown or close.“That is part of part of business that is sometimes hard to understand or accept, but it is something that happens,” she said.Stapleton’s encouraged by the amount of investment coming in.“The trajectory of downtown is really positive, and we are seeing an amazing amount of investment, not only from the city, but from developers in the downtown area who are helping us transition from the downtown that we all knew growing up here in Salem to a new, vibrant downtown where people live, and work and come down to play and celebrate and enjoy their city,” she said. Real estate data shows average retail rents have increased downtown since 2014, but remain low compared to other areas of Salem. (Courtesy/ SVN Commercial Advisors) Addressing downtown homelessness In August, Rebecca Axmaker packed up her women’s clothing store, The TRUNK, and drove the remaining inventory to North Dakota.“My daughter lives here, and the economy’s better here, I’m not going to lie,” she said. Axmaker opened her business in Silverton in 2014, then moved to downtown Salem’s Reed Opera House in 2018 before moving to High Street a year later. She loved the new location, got along with her neighbors and saw the street grow as new businesses moved in.But Axmaker said her location meant she was often confronted with safety concerns and the challenges of people living on Salem’s streets. She said she often cleaned up waste, including human feces, from outside the storefront. She knows several people whose windows were broken while parked in downtown parkades. Last July, a man died across the street from her store. The Salem Police Department confirmed the death with Salem Reporter, and said the man was 31.Axmaker said his body had been there for hours by the time she realized and made the call to police. She called the experience traumatizing.“It did something to me,” she said.Homelessness, safety and parking were the most common complaints she heard from customers. These aren’t issues unique to Salem, she said. “I think it’s in every city,” she said. “I was done. I was like ‘You know what, I’m getting older. I want to be by my kid.’”Axmaker said that businesses like hers, selling non-essentials in a time where it feels like fewer people are shopping for them, are having an especially hard time. As a result, she said it feels like more and more restaurants are replacing businesses selling a variety of goods. “I just feel like Salem could be better. It can be better, I know it can be better,” she said. A homeless person sets up a tarp along a downtown street in March 2020. Such visible encampments on downtown streets were more common in 2019 and 2020, downtown and city leaders say. (Saphara Harrell/Salem Reporter) Stapleton said that the impact of homelessness downtown has improved significantly since 2020. In that time, the city has added over 500 shelter beds and hundreds of new affordable apartments. “When I ran for council, we had tents and sleeping structures all over downtown. And I think a lot of people have forgotten about that because ‘out of sight, out of mind,’ but there were tents and people housed on the side of the street, all up and down Commercial Street and Center Street,” she said.She said the issue of homelessness is 40 years in the making and will take time to address fully, but that the city’s efforts to add hundreds of low barrier shelter beds and supportive housing projects have had a positive impact.“Although our work is not complete, I’m really proud of the work we’ve done so far,” she said. Decker said homelessness downtown wasn’t a major issue for The Freckled Bee. She stocked up on supplies, including food, tampons and condoms, to give away to unsheltered community members.In eight years downtown, she can recall only one instance, in March, where someone left excrement near her business. She’d like to see more resources for unsheltered people downtown, including access to hygiene.“There’s going to be people around, and I get it, people don’t want to see it. People would rather pretend it doesn’t exist. And I don’t know what the solution is, but ignoring itself is not the solution,” Decker said. Sullivan said part of the reason that businesses and visitors feel that the issue has gotten worse is that the shelters helped a lot of people get off the streets, and those who remain have more intense needs than the city can support at this point.“Somebody goes downtown and there’s an interaction with somebody who has some issues, something they’re dealing with, they’re not healthy. And the person has an interaction with them and they go and they tell 10 people, and those people tell 10 people, and pretty soon the story morphs,” he said. “Then that becomes the story of downtown.”Stapleton said she thinks that’s an accurate observation.“We’ve addressed all the low-hanging fruit with this issue: the low-barrier shelters, the (Salem Outreach and Livability Services Team) that’s helping, all the different things that we’re trying to do to help. But then there’s this real messy situation where we look at, as policy makers, how do we decide when somebody no longer has their own right to make a decision for their lives?” she said. “That is a conversation that we have to have, but one I don’t even know how to navigate.” What Salem is doing to fight homelessness New investments When faced with a decision between his south Salem location and his downtown location, Dino Venti, owner of Venti’s Cafe & Taphouse, said the choice was clear.He closed his south Salem location in August. He also expanded his downtown hours to seven days a week.“All my eggs are in this basket now, which is where I started,” he said. The restaurant is a few months shy of its 29-year anniversary.He said that, personally, his most prosperous times were between 2008 and 2013 with the rise in popularity of craft beer.  Venti said he, too, has been seeing lower head counts at his downtown business. He believes a contributing issue is wealth consolidation in the upper class, meaning people have less money in their pockets to spend in an expensive economy.“My demographic largely has been the middle class, I’ve seen that get hollowed out,” he said.He said there’s also been more restaurants coming in, making it more competitive.“People with all the money can only eat one lunch a day,” he said.He’s hopeful the housing developments downtown will bring in more foot traffic. He’s also looking forward to larger developments, including The Cannery which will add 382 apartments, a brewery, restaurants and retail north of downtown. “I’m optimistic about downtown,” he said.He believes supporting the unsheltered community is the place to start.“That needs to happen first, for any of these other things to really grab hold and build the confidence in our community that it’s a place where they want to be,” Venti said. “I’m up to the challenge, and I think downtown is,” he said. “I believe that downtown is still the heartbeat of the city, that it’s got better days ahead of it.” A vacant lot at 277 High Street N.E., where a 105-unit apartment building, tentatively called “High Street Apartments,” will be built by Portland-based Deacon Development. The development will include 16 units of affordable units. (Joe Siess/Salem Reporter) There’s over $100 million in private investment coming into downtown over the next five years, Wahrgren said, including several large projects.  Many of the planned projects will be bringing a focus of entertainment downtown for the first time. They include Retro Electro, the former home of Green Thumb florists, which will host a combination laundromat-bar and other retail.“There has always been, for years, an interest in more entertainment,” Wahrgren said. “I don’t think it’s because people don’t want to support retail, or are choosing entertainment over retail.” Those optimistic for downtown’s future pointed to developments on the horizon, and recent large-scale investments. In March, a trio of local investors bought Salem Center mall, and plan to revitalize it and bring in new businesses. In an emailed statement to Salem Reporter, investor Kelly McDonald said they will soon be announcing new tenants.Another group of investors are transforming the former Liberty Plaza into The Forge, which will bring 25 new restaurants, salons and other businesses into downtown. One of the floors will be a collective of women’s businesses.  Public safety was their biggest concern, and what almost stopped them from investing, said AJ Nash, the project’s principal broker and a minority owner. The Salem Police Department used to regularly have officers on bikes talking to people. Salem police spokesman Jonathan Hardy said the amount and frequency of the patrols has been reduced over the past few years due to department staffing shortages. He said he didn’t have data for how much they’ve decreased. The Forge owners are opting to hire their own private security to patrol the area, and install dozens of cameras and nighttime light and sound deterrents. Each new business will chip into the cost, and they plan to invite neighboring businesses to join the patrol route.  Nash said there had been some progress at the city council level about addressing concerns about public safety.“We realized that the way to change this, call it cancer from within, is to just provide it on the private side without waiting for the public side to act, because the public side doesn’t act fast enough,” he said. Forge said they hope to be a leader in investing in improving security downtown. He also believes having more people shopping downtown will deter crime and sidewalk encampments.Half of The Forge’s spaces have been leased or are headed to lease, and they’re on track to be around 75% booked by the end of the year, Nash said. “We are touring a lot of folks that are eager to invest in north downtown and to bring new business,” he said. “The story, in my opinion, is not all exits.” The former Liberty Plaza building is being remodeled to open in early 2025 as The Forge. (Rachel Alexander/Salem Reporter) Downtown initiatives City leadership points to new housing, added security and new parking policies as signs of a brighter future for downtown Salem.More residents will be moving in in the coming years.  There’s new major housing developments, like the newly completed Rivenwood Apartments with 157 units. There are also planned additions like eight apartments in the former Whitlock’s building and four to be added above the former Cooke’s Stationary, Wahrgren said. The High Street Apartments plan to build 105 units on the vacant lot at 277 High Street N.E.Sullivan said that the investments in housing downtown make him feel optimistic.“The more people we get living downtown, the more eyes you get on the streets, the more there is a sense of safety. And the more people that are right there, for ready-made consumers for the downtown businesses,” Sullivan said.  Stapleton said the city is investing in improvements to downtown sidewalks, storefronts and is renovating its parking garages. The Marion Parkade in downtown Salem (Laura Tesler/Special to Salem Reporter) She thinks a major step in improving downtown will come when the city implements paid parking, which councilors approved last year. The goal is to bring in more money to support parking improvements, and phase out the downtown business tax that currently pays for street parking and parkade maintenance.The paid parking will fund security in the parking garages, maintenance of parkades and parking spaces and decorations like flower baskets from light posts. The city will begin outreach and engagement for the paid parking plan next month, said city spokeswoman Nicole Miller.  “I know some people are going to have mixed feelings about going to paid parking, but in the end, this is going to be beneficial for downtown businesses, and that is a key part of why we are doing this,” Stapleton said. There’s also more culture coming to downtown. The main street association plans to bring in more food, music and events to downtown, Sullivan said. Wahrgren said the city has begun its effort to improve street lights, wrap utility boxes in art and commission sculpture artists to fill two vacant pedestals.  If downtown is at a crossroads, Wahrgren said only time will tell where it goes.“I think we’re constantly in transition,” she said. “I still don’t know, because we haven’t had enough years after Covid to know what and how we’re going to be impacted.”Sullivan’s optimistic about the road ahead.“We’ve gone through tough times before, and we’ll go through tough times again. But I really feel like we have more people that are intentionally pulling in the right direction,” he said. Contact reporter Abbey McDonald: [email protected] or 503-575-1251. A MOMENT MORE, PLEASE– If you found this story useful, consider subscribing to Salem Reporter if you don’t already. Work such as this, done by local professionals, depends on community support from subscribers. Please take a moment and sign up now – easy and secure: SUBSCRIBE. The post The problems and promise of downtown Salem appeared first on Salem Reporter.