Rotorua's CBD is going through "growing pains" as vacancy rates in the inner city increase, but the council is working to do something about it.
Some managers are worried they can only take so much before disturbances from the city's homeless cause others to leave. They question whether a rates relief would keep retail spaces occupied.
But councillor Karen Hunt said the council could only incentivise businesses and the CBD was simply going through "growing pains".
Earlier this month the council's Strategy, Policy, and Finance Committee recommended the full council approve work to explore and consult on options for a potential rates relief policy as one way to encourage investment in buildings and inner-city living in the CBD.
Those options would then be brought back to elected members later this year or early next year for a decision and would include consultation with developers, property owners and the Rotorua Chamber of Commerce. The public would also be consulted.
A Telfer Young insight report last month stated after a period of improvement the Rotorua CBD retail leasing market had slowed in recent months and vacancy rates appeared to be slowly increasing.
At the end of 2018 registered valuer, Grant Utteridge said there were 59 vacant spaces in the CBD.
He has now "intuitively" said there were more vacant spaces, although he could not base this off data as it is collected annually in December.
"This is not a Rotorua problem this is a nationwide problem.
"There are increasing vacancy rates across smaller towns because of bulk retail and online retail."
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He said the CBD was trying to adapt itself to work with those new demands.
Backdoor on Tutanekai St is currently having a closing down sale, but manager Anneka Voss said they were simply relocating to the old Fever 39 shop opposite Starbucks.
"Where we are now isn't great and hopefully moving we will also get some better foot traffic."
Voss said it was hard to deny the city's homeless made her feel unsafe and she often drove to the bank even though it was only a short walk away.
She also hoped the move would encourage other businesses to move into the vacant shops next door and said it was shop presentation which drew customers in.
The city was a cocktail shaker of retail spaces because of tourists. Vape Merchant manager Thayne Signal said shops needed to look after their own first.
He said it was concerning to see international brands leave but believed if shops catered to the market they would not have to leave in the first place.
Professionals McDowell Real Estate co-owner Steve Lovegrove said the idea of a rates relief was backwards.
"What would be of greater benefit to the business owner would not be reducing cost but increasing income and to increase the income you need to increase the attractiveness of actually doing business in there."
He believed creative ideas through accommodation and tourism would see the city thrive and said Eat Streat was a fantastic example.
Councillor and inner-city portfolio lead Karen Hunt said the council could only incentivise and encourage businesses.
"We don't own the buildings and we can't fix the buildings but we have the levers to make the environment safe, attractive and bustling.
"As far as actively filling those buildings, all we can do is make it more attractive for a builder or developer and the potential rates relief could do this."
She said accommodation and new stores would eventually come into the CBD but this would take time.
"I see the CBD going through its growing pains, but it will change, I'm confident."
A locally owned business owner close to Te Manawa, who spoke on the condition of anonymity, believed the fighting and the abuse given out by the homeless was the real concern.
"We're not currently being looked after and although I can put up with the homeless that doesn't mean everyone can.
"If you're not looking after retailers there will be more empty shops I know it."
Rotorua Lakes Council's operations group manager Henry Weston said a thriving and healthy business sector was one of the council's main objectives and to achieve this the council was focusing on improving safety in the inner city.
He said a joint safety initiative with the police had been particularly successful.
"What started as a summer safety campaign has been extended into the winter months due to its effectiveness.
Weston said the council was also continuing to work and support other agencies and organisations to provide emergency and social housing locally, getting people off the streets.
"We look forward to seeing how initiatives such as the Ministry for Social Development's Housing First initiative, which aims to end homelessness, will positively impact our community."
Improvements to date
• Increased CCTV monitoring and improved lighting
• Inner-city markets aimed at attracting people into the CBD
• Improved intersections
• Art installations and alleyway art
• The development of Te Manawa and Eat Streat
• The Jean Batten Park expansion and revamp
• Improved maintenance of the city's gardens and public amenities
• Inner-city activations such as live entertainment
• The CBD safety initiative with police.