Uncertain future of Edmonton City Centre offers hope for transformation

The looming question around the future of Edmonton City Centre has stirred concern, but for some, it’s also sparked cautious optimism. With the property now in receivership, the downtown Edmonton shopping centre, once a vital core retail hub, stands at a critical crossroads.

“It’s a massive asset right in the middle of the core,” said Puneeta McBryan, CEO of the Edmonton Downtown Business Association. “I think for the general public, who aren’t intimately involved in the commercial real estate industry or the downtown business community, it was probably a bit of a shock and really concerning to hear.”

But for those closely involved in the downtown file, McBryan says the news came as no surprise.

“We’ve all been pretty acutely aware that the property changed hands at probably the worst possible time,” she explained. “Downtown Edmonton was doing really well through 2017, 2018, 2019. So the property changed hands when values reflected how well things were going. But the fact that it changed hands in 2019, and then the pandemic hit, we’ve all had a front-row seat to how incredibly challenging, nearly impossible, it’s been to bring that asset back to what it could and should be.”

McBryan believes there’s now real potential for progress.

“Frankly, and this might sound crazy, but for some of us really close to the issue, it’s almost a bit of a relief right now because it means that, hopefully soon, we’ll have new owners coming in with a very clear and realistic view of what’s required, and who are willing and able to make the significant investment needed to reimagine that property.”

Downtown Edmonton itself is still wrestling with many of the same post-pandemic challenges facing urban centres across North America.

“We’re in downtown Edmonton battling the same issues that major cities all over North America are dealing with: a complete change in how, where, and when people are working in offices, which has led to the devaluation of commercial real estate; safety and security concerns; visible homelessness; and open-air drug use that makes customers uncomfortable and puts staff in danger,” said McBryan.

However, she adds, Edmonton’s downtown struggles are amplified by factors specific to the city.

“Our downtown is too large geographically,” McBryan said. “The neighbourhood we call ‘downtown’ spans a huge area—about 2.6 square kilometres. We have office buildings, residential towers—everything you’d expect in a downtown—spread across that whole area, along with a lot of undeveloped land.

“Just for context, Calgary’s downtown is the next largest, and that’s only 1.9 square kilometres.”

This lack of density, McBryan said, contributes to the challenge of creating a vibrant and safe urban core.

“Even on a good day, when we have 30,000 to 40,000 people working downtown, they’re spread over a massive area,” she said. “That makes it hard to create the density and critical mass that make a downtown feel busy, bustling, safe, and prosperous.”

Compounding the problem is a relatively low residential population.

“Over that entire huge area, we only have about 13,000 residents,” she added. “That’s changing slowly—there are great new developments, especially in the Warehouse District between about 104th Street and 108th Street but it’s not happening fast enough. Still not enough density.”

There are also long-standing social issues at play.

“We have the highest concentration of correctional facilities per capita of any major city in Canada,” McBryan noted. “So when we talk about homelessness, crime, and disorder there are very entrenched issues driving that. It’s going to take all orders of government to solve these problems. We’ve been saying that for years.”

While CBRE signage has been spotted on-site, the real estate firm isn’t commenting publicly on the situation. Yet, there is a growing sense of potential.

“I think there’s a huge opportunity with that mall,” said McBryan. “What’s happening in the ICE District (nearby) there’s a lot of success there we can build on. There’s so much opportunity in downtown Edmonton right now. A lot of people are hopeful.”

“It saddens me to see the current state of downtown Edmonton and the negative effects that social disorder is having on the Edmonton City Centre,” said Michael Kehoe, Broker of Record, Fairfield Commercial Real Estate.

“This mixed-use urban complex was formed in 1999 when two separate shopping centres, The Edmonton Centre developed by Oxford Properties in 1974 and the Eaton Centre developed by the builders of the West Edmonton Mall, Tripple Five Corp in 1987 were combined to create the Edmonton City Centre.

“I remember with fondness attending the Eaton Centre grand opening reception hosted by the developer. The property had a glitzy feel to it that was uncommon in downtown Edmonton at the time. The 1980’s was a transformational decade on the Edmonton shopping centre scene. New malls were being constructed and existing ones expanded, and the Oilers were on top of the NHL. It was an era where anything was possible in Edmonton, and the City quickly became saturated with retail space and seriously over built.

A”nd here we are almost 40 years later, and Edmonton is spiraling into a Canadian version of an urban ”doom loop” in the post-pandemic era. Doom loop is an academic term coined in the United States that refers to a scenario that applies to a city’s problems such as a drugs, people with mental health issues, homelessness, and crime. Edmonton city leadership has failed to reign in this dangerous level of disorder. At times downtown Edmonton feels like a zombie movie and unfortunately it has affected many aspects of urban life including the downtown shopping scene. The stark contrast between the shiny new Ice District a few city blocks away and the Edmonton City Centre is the tale of two cities. If Edmonton can clean this situation up it will present an amazing opportunity for the ownership of Edmonton City Centre to reposition the property, but it will take money and patience.” 

George Minakakis, Founder and CEO of the Inception Retail Group, said downtown retailers have long faced challenges in remaining relevant.

“Many businesses come and go. Over the last decade a sharp decline in foot traffic driven by hybrid work and a slow post pandemic recovery, elevated operating costs, and public concerns around safety. Unlike suburban malls, downtowns lack centralized management. This makes it difficult to maintain consistency in branding, cleanliness, and tenant mix. Add to that limited parking, aging infrastructure, and rising competition from e-commerce, soon AI-commerce and suburban retail, and it’s clear that traditional downtown retail models need to reinvent themselves to match changing consumer behaviors. Retailers at the end of the day need foot traffic and merchants that will compliment them not over competition, unsurprisingly larger retailers stay away because of uncertainty,” he said.

“Downtowns can absolutely be revitalized, but not by returning to what they were. They need to evolve into open-air, curated urban villages, essentially, the new mall without walls. That means increasing residential density, embracing mixed-use developments, investing in street-level vibrancy, and supporting experiential, independent retailers. Municipalities must also foster shared stewardship among businesses and landlords to create unified branding, events, and programming that draw people in for more than just shopping. And this shift can attract larger retailers who rely on heavy traffic, giving the shopping areas more variety and credibility. Downtown areas will also need SOHOs to create a diverse business hub. Some communities are getting it right, but not all. Smaller communities may be able to respond more quickly than larger ones. Real estate owners need to go beyond filling vacancies and be far more strategic with their choices in tenants; securing the right tenants can lead to long-term success and value for their properties and the tenants. I’ve seen this practice work well in other countries.

“Not the end, but indeed a transformation. Traditional downtown malls designed around department store anchors and commuter crowds are fading; it will be a challenge even for suburban malls, but many downtown malls are being reimagined as mixed-use hubs with housing, healthcare, education, co-working, and entertainment. The mall of the future won’t be enclosed; it will be the entire downtown, walkable, diverse, culturally active space where people live, work, and gather. In that sense, we’re not losing malls; property owners and merchants need to see this shift as an opportunity to reimagine things, but that will take time and a concerted effort to sell the idea to themselves as the right direction.”

Retail analyst and author Bruce Winder said the biggest challenge is obviously the traffic declines post pandemic.

“Although some traffic has returned, many cities are not back at the levels they used to be, pre-pandemic, despite Canada’s massive population growth. Recent back-to-work mandates will help as employers push to bring empoyees back 4 or 5 days. Another challenge is crime. Canada’s homelessness and druge use issues have grown significantly in downtown areas and this can scare shoppers away but also increase shoplifting. Another issue is that some conusmer segments are tight with their spending. Although overall retail sales have been good recently, some economists feel that it is the next shoe to drop as our GDP softened last quarter and unemployment levels have increased,” he said.

“The return-to-office mandates will help but until governments tackle homelessness, drug addiction and crime, Canada’s downtowns will not be what they once where. The question is, will governments act and can they? We are entering an era of austerity and I don’t think these social, judicial and medical issues are on the front burner as we need to get our economy moving again.

“I think select downtown malls, particularly in affluent, tourist areas will do well. Middle retail malls will probably go away as shoppers spend in the suburbs where some of the issues I discuss above are less prevelent. Also, select convenience retail below condominiums and office towers will do business as shoppers need not travel outside of their bubble to buy.”

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