The City of Calgary is aggressively moving forward in a concerted effort to bring life to its downtown core that has been decimated in recent years with a record office vacancy rate spurred on by thousands of layoffs in the oilpatch.
City Council has approved an initial investment of $200 million for Calgary’s Greater Downtown Plan which is focused on creating a vibrant area in the city’s core.
The initial investment includes:
- $45 million in financial incentives for office conversion, office replacement, and new residential development;
- $5 million in financial incentives to offset +15 Fund contributions for residential development;
- $55 million for impactful capital projects to improve public spaces, improve vibrancy, and support complete neighbourhoods;
- $5 million to activate downtown public spaces with festivals, events, and community spaces to build vibrancy;
- $80 million for Arts Commons Transformation Phase 1; and
- $10 million over four years for a dedicated City of Calgary Downtown team.
Murray Sigler, interim CEO of the Calgary Chamber of Commerce, said vibrant communities lead to vibrant businesses, which are critical to Calgary’s inclusive economic recovery, and Calgary’s Greater Downtown Plan will advance the important work needed to reimagine and build on the vibrancy of the downtown.
“Calgary competes with other cities in Canada and around the world on much more than economics. To attract and retain top talent, we must invest in the capital and social infrastructure that supports community well-being, including childcare, parks, public transit, the arts, and the charitable sector. Calgary’s Greater Downtown Plan builds on the work that is already being done, and this significant investment is needed to address one of our city’s greatest challenges,” said Sigler.
“The plan begins this work through reimagining our downtown for mixed-use neighbourhoods and transportation; addressing climate change through design and land use; continuing to build a strong, well-developed public transit network; and focusing on innovation and regulatory reform. It will also generate investment and support the growth of our business community downtown, which can alleviate pressures on the property tax system caused by downtown vacancy in the years to come.
“A plan that invests, enhances, and builds on Calgary’s vibrancy is needed now, more than ever, and its success will require ongoing collaboration with the business community. As we await further details, we look forward to the renewed community vibrancy that the Greater Downtown Plan will deliver for all Calgarians.”
The 10-year plan, pegged at about $1 billion, was developed through public engagement as well as the input of downtown businesses and community associations. The overall plan includes $450 million to $500 million to address office vacancy and $500 million for downtown vibrancy infrastructure and amenities. The initial investment package represents only 20 percent of the overall need over the next decade. The City said it will require support from all levels of government to help address this 80 percent funding gap. City Council has directed the Mayor and City Administration to initiate a formal request to the federal and provincial governments.
Michael Kehoe, Broker/Owner with Fairfield Commercial Real Estate and a retail specialist, said healthy downtowns are the economic engines of Canadian cities and their return to vibrancy will be an important part of the post-pandemic recovery.
“The recovery will be dependent on workers returning to reinvented downtown work environments where the commercial viability of stores and restaurants is driven by foot traffic. The downtown core in Calgary as we all know has been severely impacted by the fall in oil prices and the pandemic,” he said.
“Any turnaround in the fortunes of the city’s downtown will take years and will require a long-term strategy driven by the private sector and a significant financial reinvestment by building owners that will be executed by their management teams. Time will tell if the recent Calgary City Council’s pledge of $1 billion with an initial $200 million to help address the problems of the downtown core will have any meaningful effect on the fortunes of their ailing downtown core. The city’s function must focus on creating a business-friendly environment with affordable taxes, limiting bureaucratic restrictions, combined with timely approval processes that encourage new investment.
“The market will decide the highest and best use for downtown space and the occupancy levels of commercial buildings. Building owners in Canadian central business districts are a creative and entrepreneurial lot and solutions will emerge as many commercial spaces I am sure will be repurposed to alternate uses. Cities need to encourage citizens and shoppers in particular to come downtown with relaxed parking fees, events, attractions, and other incentives in a post-pandemic Canada. Civic leaders across Canada need to address the social challenges of the many homeless citizens and those struggling with poverty that are evident on the streets of our downtowns.”
In the heart of corporate Calgary lies The CORE, a shopping centre with about 120 retailers, restaurants, and services in about 610,000 square feet stretching over four floors and home to such high-profile retail brands as Holt Renfrew, Harry Rosen, and Simons. The centre was recently profiled in a photo tour in Retail Insider.
“The CORE is excited to hear that the city has approved a plan to revitalize and energize Calgary’s downtown. We look forward to the execution of this plan to add vibrancy to the downtown through programming, residential density, and capital investments. This is a real opportunity to chart a new more positive course for the downtown,” said Domenic Mazzocchi, Director, Property Management, The CORE
When oil prices began their collapse in late 2014, it triggered an economic downturn with a vicious domino effect in Alberta, and particularly Calgary — home of the corporate oilpatch. Thousands of people were laid off from downtown offices, driving the office vacancy rate to more than 30 percent. More than six years later, the vacancy rate still hovers at that level, and, because of the pandemic as well, fewer people are downtown. On many days it looks like a dead zone.
That has impacted businesses and retailers who for years have relied on a healthy corporate world to drive their business.
“A thriving downtown where people want to live and be, and where businesses want to set down roots, means a thriving Calgary,” said Thom Mahler, program lead for The City’s Downtown Strategy. ”We have been working extensively over the past several years with our civic partners, Calgary’s real estate industry, post-secondary institutions, and the downtown business community. We’re doing what we can with what we have, but there is a definite need for broader commitments and funding to make this a reality.”
Kate Thompson, President and CEO of Calgary Municipal Land Corporation which is spearheading development in areas near the city’s downtown core, said the investment in Arts Commons underscores the value of the arts to the city’s wellbeing and will ensure the ongoing growth of Calgary’s cultural identity, adding that it “secures the long-awaited expansion of our city’s important arts and cultural centre—something essential not only to the arts community but to downtown’s renewal as a whole.”
Jyoti Gondek, a city councillor who is running for Mayor in the fall election, voted in favour of the $80 million allocation to transform Arts Commons.
“Why? Because an investment in Calgary’s creative sector is an investment in Calgary’s future,” she said.
Gondek said the creative sector has much to offer in the city’s efforts for economic diversification.
“We need to create an even-more thriving downtown community that moves beyond the traditional office-based downtown central business district and instead is a dynamic, vibrant 24/7 centre of our city,” added Mayor Naheed Nenshi. “This means taking bold action and making intentional investments in public spaces, supporting vibrant neighbourhoods, and ensuring we continue to create a downtown that people want to live and work in.”
“A vibrant downtown is essential for attracting and retaining talent and our city’s long term success,” said Trent Edwards, President, Canada Land & Housing, Brookfield Properties Development and Co-Chair of Calgary Economic Development’s Real Estate Sector Advisory Committee.
“Harnessing the full potential of our city is dependent on creating a significantly improved tax base downtown which will help reduce the tax burden, where it has recently shifted outside the core, and help us to be more competitive throughout the city. These financial investments are part of a necessary take-action approach to attract people who want to spend time living, working and playing in our downtown, providing long-term benefit to all Calgarians. We simply can’t afford not to do this.”
Richard White, a Calgary blogger as the Everyday Tourist and former executive director of the city’s downtown association years ago, said city planners and politicians want this robust downtown like they see in New York or Chicago or even Vancouver.
“But my experience is that you only have a robust, vibrant downtown when you have tourists,” he said.
“You go to New York, you go to Montreal. It’s the tourists that make the downtown vibrant. Most other cities in North America and even in Europe, if you don’t have a ton of tourists in your downtown, you probably don’t have a vibrant downtown.
“I’m not sure that Calgary can do anything to become a tourist city. We just don’t have the population close by. When I was in Nashville, there was tons of people on the weekend. But they have something like 50 million that are within a three-hour drive. So people on Wednesday or Thursday can say hey let’s go to Nashville for the weekend. And they hop in their car . . . You look at places that are tourist attractions. They have that rubber tire market. Vancouver has Seattle. Toronto has the whole sort of Golden Horseshoe and Buffalo. Montreal’s got Ottawa, Quebec City and all of northern New York. You need a density of people. We only have Edmonton and people don’t go from Calgary and Edmonton because they’re perceived as the same city. They don’t have anything different to offer.”
White said another thing to consider is that the whole concept of the downtown is an early 20th Century model that is no longer valid. People don’t need to go downtown to go to the cinema. Or to go to the bank. All of those things. The suburbs have all that in place now for people.
Also, Calgary’s culture is focused on the outdoors with people spending much of their time on the city’s pathway system and along the rivers. In some ways, that desire has taken away from the downtown appeal.
For example, he points out, the extensive pathway system along the Bow River and its rich natural landscape is only a few blocks away from Stephen Avenue, the pedestrian-friendly roadway in the heart of the downtown core.