More than 50 ground floor shops around the CBD are vacant, according to Travis Machan, director, commercial and industrial sales at real estate agent MMJ; and it's not because of the pandemic.

Mr Machlan said the issue is outdated planning regulations.

"I think we counted over 50 ground floor shops in commercial-residential mix buildings that were vacant," he said.

In Wollongong, multi-storey buildings built in the B3 mixed-use zone are required to have commercial tenancies on the ground floor. In the eyes of Mr Machan and others, this is leading to empty stores sitting beneath fully occupied apartment complexes.

"The idea that all buildings within that [mixed use] zoning require ground floor commercial or retail is not appropriate.

"There are many instances on the fringe of the CBD that have these ground floor shops, and they're just empty, they're sitting vacant."

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As Wollongong has become attractive for businesses to relocate as part of an exodus from the capital cities, Mr Machan fields calls from those wanting to set up shop in Wollongong.

Naturally, he directs them to the city's pedestrianised mall, in what would be in other cities the focus for retail activity and a hub of foot traffic.

These prospective tenants however turn away from the mall, seeing its low foot traffic and high rents as prohibitive for a successful business.

"Crown Street Mall is twice as long as Pitt Street Mall," Mr Machan said. "It's one of the largest closed mall precincts in the southern hemisphere."

While the block between Keira and Church streets is generally thriving, Mr Machan notes that further east, empty shopfronts increase and tenants change over frequently.

This is attributed to a number of factors, including the lack of vehicle traffic in the mall, the small size of buildings in the block - compared to the mix of large and small closer to Wollongong Central - and the absence of an anchor retail tenant between Church and Kembla streets.

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What is further compounding the issue of a lacklustre CBD when it comes to ground floor retail is the spread of Wollongong's commercial core.

In 2020, Mr Machan joined with a number of other stakeholders and lobbied council as part of a review of the planning controls for Wollongong's City Centre.

The resulting draft plan, which was presented to councillors in 2020, proposed to segregate the Wollongong CBD into areas of activity. A commercial core close to the corner of Crown and Keira streets, a professional precinct on Burelli Street, health further west closer to the hospital and nightlife and entertainment further east, towards the Wollongong Entertainment Centre.

The plan also proposed to scrap the requirement for 'shop-top' developments, whereby multiple storey buildings had to have a commercial premises on the ground floor.

At a meeting in December 2020, councillors resolved to send the plan away for further work and revision, and in the intervening year the problem has only gotten worse.

At the gateway to Wollongong CBD, the ground floor of the Parq on Flinders development, completed in November 2020, remains largely empty.

Across the road, on the corner of Keria and Smith streets, a development application has been lodged for 43 apartments on top of two commercial suites, with similar developments where car yards formerly lined the strip between Wollongong CBD and North Wollongong train station.

While the apartments are snapped up quickly, Mr Machan said that in many cases, the ground floor is an afterthought.

"Developers will concentrate on ensuring they get the residential design correct, to meet the market and sell well. Those ground floor commercial shops, they're doing it to simply tick a box," he said.

"There's only so many hairdressers and cafes available to put in those shops."

Other observers also counter that there needs to be a limit to this type of development outside of the Wollongong CBD. Adam Zarth, executive director of Business Illawarra, is upbeat about the post-pandemic Wollongong CBD but argues that a dilution of commercial activity outside of the CBD undermines the vibrancy of the city's core.

"It becomes a matter of how far out from the CBD do we want to see concentrated commercial activity if we want a vibrant CBD? I would say you need to draw the line somewhere and you could arguably draw that line to the north of the intersection of Smith Street intersection and Keira Street.

Michelle Guido, Property Council Illawarra regional director, said a vision for the city, such as is contained in the Draft City Centre Planning Strategy, should guide where development should occur and what form it should take.

"When you just have random commercial places, all over the city, it does push a lot of the commercial out of the CBD."

A Wollongong City Council spokesperson said the council took a holistic approach to planning and development, with a number of planning documents feeding into the overarching strategy.

"For example, a survey to support the Wollongong LGA-wide Retail and Business Centres Study was out for responses at the end of last year, so that we could gather community feedback on where they go to shop, why they go there, and what they like about these places," the spokesperson said.

"This feedback will inform the draft Retail and Business Centres Study and feed into the revisions of the draft Wollongong City Council Planning Strategy."

Ms Guido said a strategy would encourage investment in the areas most suited to development.

"When developers are looking to invest in the city, and they know where to put that investment, it incentivises certain investment in certain areas."

The Wollongong Council spokesperson said it worked proactively to encourage activity and investment in the Wollongong CBD including through music events and promoting Wollongong to businesses from outside of the region through Invest Wollongong.

"We want to balance commercial needs while also delivering a centre that is a desirable place to work, as well as live and socialise," the spokesperson said.

Mr Machan said that the longer the city waited and the more developments that went ahead, the greater the pressure would be put on the city's existing core.

"We need to keep our CBD alive and functioning. We're very fragmented at the moment, and that's only going to continue unless we make that change."

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