Currently, 22.52 percent of retail space is vacant; however, this is partly attributed to the vacancy of a 40,000 square-foot retail building downtown. Without that vacant space, the rate would be 12.22 percent, according to Powell.

The retail vacancy rates downtown coincide with an increase in lease rates for downtown storefronts. Salem's Urban Development Director Rick Scott said rising rates aren't an inhibitor to growth.

"You want rates in the downtown area to go up," he said. "As a result you'll lose some business but new ones will come in."

This is attributed to a high interest in downtown retail space, he said.

Ross Swartzendruber, who organizes many downtown events, says that ever since last year's parking and streetscape changes, downtown has seemed empty of retail space as well as shoppers.

"It's like all the customers left downtown to find friendlier places to shop," he said.

Downtown vacancy rates could be a reaction to several factors, Scott said. Among them are lower lease rates in other parts of the city and the current economy.

But Swartzendruber says that part of the blame lies with the business owners.

"Failure of downtown businesses to promote First Wednesday in April, a first since its inception years ago,  is symptomatic of the problems created by the flight of retail from the core," he said.

"I'm anticipating the return of a professionally organized effort to get people downtown again."
Office space vacancies are painting a different scene in Salem's big picture. The survey did not focus on the downtown core, but the entire city. While still not an all-time low, the overall 8.06 percent vacancy is down from a 2005 high of more than 11 percent.

While the downtown retail vacancy numbers are up, Scott said he isn't worried.

"Things are a little tight on the retail end and we're a little concerned but not overly so," he said. "We would like to see those numbers in the single digits, but it's still far better than we saw in 2003."

For more information or to read the entire survey, visit www.powellvaluation.com.