A neighborhood grows

The red streetcars rumble along King Street and Spadina Avenue with an understatement typical of Toronto. Traffic on the wide sidewalks doesn't generate quite the "street energy" you feel in, say, lower Manhattan. And many of the handsome old brick buildings sport "for lease" signs.

Stand perfectly still, though, and you can feel the vibe. Deals are in the air over a cappuccino. Ideas are forming as people stare off into space at their workstations.

Welcome to King and Spadina, where bits and bytes meet bricks and mortar - and find bliss. Human-scaled industrial buildings full of character have made this the "hot" neighborhood for Toronto's new economy.

It's a paradox of the technology age: Geography still matters. In fact, it matters for technology companies more than most.

Like every living system, the urban ecosystem of King and Spadina is in the throes of change and renewal. The current question: Can the garment industry hang on?

Street signs proclaim this Toronto's "Fashion District," as if signage could make it so. But rents have risen nearly tenfold.

"They've moved a lot of sewing machines out and a lot of computers in over the last four years," says B. J. Murphy of the real estate firm Colliers International.

"They don't want fashion downtown anymore," designer Marilyn Brooks complained in a brief interview, recently, conducted via cellphone over the background clatter of workmen dismantling her shop. A 37-year veteran of the Toronto fashion industry, she has just been forced out of the King Street West building where she had been for nearly 10 years.

Even the Spadina Bus, a new-economy trade association, is worried. "The vibrancy of the area will depend on maintaining the diversity," says Eric Meerkamper of D-Code, a founder of the association.

The downtown core - "a beautiful, living, creative space," he calls it - is the right place for his firm, he says. D-Code helps corporations trying to "connect with the information-age generations, as employees, customers, and citizens." The 24-hour environment ("live/work/play") - makes sense for young people for whom "work is a source of community," he says. "People aren't living where they grew up anymore."

In the information age, "geography is simultaneously irrelevant and hyperrelevant," says Meerkamper. "You can work distantly, you can have virtual networks and develop relationships distantly."

But geography - physical proximity to people you know and trust - is more important than ever, he insists. "If you're seeking partners and suppliers ... you need a way to filter information. And trust is a good filter."

Michael Emory, president and chief executive of Allied Canadian Corporation, a developer with nearly 2 million square feet of office space downtown, concurs. "Place matters hugely.... E-business have clustered geographically for mutual support," he says. The very architects of the new economy are demonstrating, "by their own conduct," he stresses, that the old saw about location, location, and location still holds.

The neighborhood's turning point was a city decision in 1996 to lift zoning restrictions intended to preserve the area as a center of the century-old garment industry. "You'd have 150 Chinese women at sewing machines doing hockey sweaters," as Mr. Murphy puts it.

Rents stagnated at two or three dollars per square foot because tenants couldn't pay more. Buildings landlords couldn't afford to maintain were being run down - "were being consumed," says Mr. Emory.

With restrictions off, developers renovated for higher-paying tenants. Emory acknowledges "some issues around a process you might call gentrification." But he and others argue that garment manufacturers are better off in cheaper, more accessible quarters farther out.

Meanwhile, he insists that redevelopment has been "very good for the city.... These buildings have been given another 100 years of life."

Emory sees "the Nexus generation" as "adamant about the inner city" as the place to be. "There's a very strong sense of place - and the more educated people are, the more they are aware of it. Space is changing, but the need to be anchored remains."

The name of urban guru Jane Jacobs is often invoked here. One of her maxims: New work often needs old buildings. Emory ticks off advantages of the "brick and beam" neighborhood: "High ceilings, the human scale, the attractive buildings, and - don't underestimate this - natural light on four sides."

If there's a place in this urban core where the laws of economics appear to have been repealed, or at least held in abeyance, it's 401 Richmond Street West, home to artists, media and technology firms, and research and advocacy organizations. Architect Margie Zeidler and her family bought it in 1994 - under the old zoning. They renovated, but with a light touch. This held down costs, preserved the building's character, and left in place many original features, such as windows that actually open.

The Zeidlers have chosen to hold rents down - and they have a waiting list of prospective tenants. "We are making a profit, a profit any developer would be pleased with," Margie Zeidler says. "We could be making more. But this is where I work every day. This is my life - I love the possibilities of supporting the group [of tenants]."

Nationally known child-development expert Fraser Mustard has no doubt about what makes 401 Richmond "work": "It's a place which creates an environment that is good for human beings to live and work in.... Physical space is not a trivial thing for human beings."

Lezlie Preboy and her partner, William S. Brown, run Gwendolyne Hats, a custom millinery workshop at 401. "I know an amazing amount of people I have conversations with," Mr. Brown says. "You find out what other people are up to." Tenants borrow from one another - a little photocopying, a loan of a dolly.

Zeidler talks about "the information you find by meeting people in the hall." She adds, "Even if you're alone, you've got neighbors and collaborators." Of more than 200 tenants in seven years, only one has ever gone bankrupt, she says.

She would like to protect the neighborhood's artists and designers somehow. "But I don't know how you do it. I see the artists being kicked out, the needle trades. In an ecosystem, things die off. But when you see it at a personal level, it hurts."

The artists, she notes, are the ones to spot new areas with potential. "They bring the value to the area, and then they get kicked out. How do we let those who create the value stay there?" she muses, noting, "They don't have the same access to credit as developers."

Whatever the natural tension between the artistes and the techies, they all share a need for community, for proximity to collaborators and competitors.

Mark Relph of Microsoft, another Spadina Bus founder, says that much of his firm's business is across Canada. "But being connected to this community helps us nationally," he says, adding, "Most of my meetings are on foot."

A recent arrival in the bricks-and-beams district is Techspace, a sort of miniature office park, where entrepreneurs lacking the proverbial garage can rent space. For $500 per person per month, Techspace offers fully furnished "plug and play" suites for two to 30 people, for as little as three months. Tenants, or "members," have access to conference rooms and other amenities to help them project seriousness to clients and investors.

The presence of Techspace, based in New York, says something about the reduction of the "urban cluster" phenomenon to a formula. But tenants - er, members - are quite enthusiastic. "For us, it's worked in every respect," says Simon Wood, director of Deepgroup Canada, a first presence here by Britain's No. 2 digital media company. One of the surprises, Wood says, has been the sense of community. "We work odd hours, and it's been hugely helpful to have others in on a Sunday afternoon, for instance."

Community may be what everyone wants, but not everyone can afford it in the King and Spadina area nowadays. The Price Roman boutique has been at its 267 Queen Street West location "forever," says owner Tess Roman. In that time, "we've seen a lot of people leave," she says, as the needle trades have been pushed west. She's well enough established to withstand rising rents.

Moving west is exactly what the Toronto Fashion Incubator has been forced to do. A nonprofit city organization set up in 1988 to foster local design talent, it's now in Parkdale, at Queen Street West and Dovercourt. Its new quarters feature 10 small sub-market-rent design studios, plus shared production facilities and a showroom for meetings with buyers and clients. In fact, it's conceptually quite similar to what Techspace offers its very different clientele.

Susan Langdon, executive director of the incubator, is frank about the reason for the move: Their rent more than tripled two years ago.