City News, ECONOMY

Five key takeaways about the state of downtown Salem

How is downtown Salem doing?

Salem Reporter talked to local business owners — those packing up shop and those investing — as well as city and downtown leadership.

We published a report last week exploring a range of issues from inflation to parking.

Read the full story here:

 Here are five key things we heard:

1. A wide range of issues affect downtown businesses

Several beloved downtown businesses have closed in recent months. Though each business faces unique challenges, commonly cited reasons include the dominance of Amazon shopping, inflation making people less likely to shop for non-essentials and safety and parking concerns downtown. 

“Any way you cut it, I was spending over 10 grand a month just to be downtown,” said Bee Decker, owner of The Freckled Bee, which moved out of its downtown storefront at the end of June. She’d been downtown for eight years, and saw expenses go up and revenue go down.

2. Despite recent departures, vacancy rates are low

When one business leaves downtown, another is often ready to take its place, commercial real estate data shows. 

Downtown Salem’s retail vacancy rate is at 3.8%, up from 3.2% a few months prior. A vacancy rate below 5% generally indicates a strong market.

About half of the spaces that come on the market will have a new tenant within six months, said Nick Williams, a senior advisor at SVN Commercial Advisors which keeps data for commercial real estate in Salem. 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.

3. Homelessness remains a concern, but sheltering efforts bring optimism

Some business owners said that the most common concern they hear from customers is the presence of unsheltered people downtown. Some say the issue feels worse than ever before.

Since 2020, Salem has added  over 500 shelter beds and hundreds of new affordable apartments. City and main street leaders believe that effort has made a big impact on overall homelessness, but also means those left on downtown streets are often people with high levels of need.

“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,” said TJ Sullivan, the president of the Salem Main Street Association. “Then that becomes the story of downtown.”

4. Private development is pouring in

City leadership and some business owners are optimistic about the future of downtown. There are plans to add hundreds of apartments and dozens of businesses over the next five years from over $100 million in private investment.

That includes revitalization plans at the Salem Center Mall and the transformation of the former Liberty Plaza into a space for 25 businesses called “The Forge.”

The newly completed Rivenwood Apartments just added 157 apartments, and developers have plans underway to divide unused upstairs space in several older buildings into apartments, like the former Cooke’s Stationary.

“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.

5. There are still unknowns

Upcoming plans to shake up downtown include implementing paid parking, and bringing in more art and events.

Though downtown leadership is optimistic, the unprecedented impact of Covid is still reverberating.

“I think we’re constantly in transition,” said Sheri Wahrgren, the city’s downtown revitalization manager. “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.”

Contact reporter Abbey McDonald: [email protected] or 503-575-1251.

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Abbey McDonald joined the Salem Reporter in 2022. She previously worked as the business reporter at The Astorian, where she covered labor issues, health care and social services. A University of Oregon grad, she has also reported for the Malheur Enterprise, The News-Review and Willamette Week.