With approximately 32 per cent of office space sitting vacant in downtown Calgary, city council is being asked to approve a revitalization plan for the core that would involve an initial investment of $200 million.
The downtown strategy is a guiding document that would attempt to retool the core from being a business district that is often empty at night to one with more amenities, more pedestrian and cyclist infrastructure, better connections to green space, more housing and more life beyond the work week.
The first round of money would come from reserves, savings and a federal infrastructure fund.
“Fixing downtown is a citywide issue. Our downtown is central to Calgary’s economic recovery, and we are facing a long road, there is no looking back,” Thom Mahler, manager of urban strategy for the city, told council on Monday.
“Our biggest risk for the downtown is to do nothing as there is no forecast that shows those property values will ever come back on their own without significant and sustained action.”
Hollowing out of the core has removed $16 billion in value from the city’s tax rolls since 2015. That means businesses outside the core have to make up the shortfall of taxes. Council has repeatedly reached into reserves to subsidize those businesses facing steep tax increases.
The city plan would see:
- $45 million for incentives for existing office space to convert to residential, redevelop or look at “adaptive use.”
- $5 million to offset contributions to the Plus-15 fund for residential developments.
- $55 million for a “downtown vibrancy capital program.”
- $5 million for programming events.
- $10 million for a “dedicated downtown team” to oversee implementation.
- $80 million for the previously announced Arts Commons transformation.
City administration estimates the plan would cost $1 billion over the next 10 years.
Council heard from a steady stream of pre-selected Calgarians touting the importance of the plan.
Scott Hutcheson, the executive chair and co-founder of Aspen Properties, which has significant holdings in downtown Calgary, said action is needed.
“Councillors, chances are you’re not going to like what I have to say next: Calgary’s a no-fly zone for institutional capital,” he said of the challenges facing the downtown.
“The pension funds, and the large real estate investors in that community that has typically owned the assets in the downtown, is neither interested in investing in our city core with new equity, nor is new debt available to our market.”
Hutcheson said estimates of a 20-year turnaround for downtown real estate can’t be allowed to become reality — and won’t if council approves the strategy.
Administration wants the mayor to ask other levels of government for funding to help transform the core. It also wants authorization to move forward on an affordable housing project conversion at 706 Seventh Ave. S.W.