Varcoe: It’s time to revitalize downtown Calgary

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Calgary’s downtown faces problems that are so daunting, it sometimes seems difficult to see a way out of the morass.

Yet, Monday was a hopeful moment: change is coming.

For many Calgarians, it can’t happen soon enough as several tough challenges are confronting the city’s core today — too many empty office towers, an eroding tax base, and not enough people living and working in the area.

During a meeting Monday, council adopted a new area blueprint — called Calgary’s Greater Downtown Plan — and took tangible steps to fix the problems and revitalize the area.

It adopted a $200-million investment strategy, which includes $45 million in incentives to encourage the conversion of office buildings to residential units and other uses.

Another $55 million will go into a program to make the downtown more vibrant with new capital investments — such as work on the Stephen Avenue or the Olympic Plaza area — and money is set aside for additional programs.

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Another $80 million will allow the first phase of the Arts Commons transformation project to move ahead, which includes the construction of a new 1,200-seat theatre and two smaller theatres.

“This will make a big difference,” Mayor Naheed Nenshi told reporters after the meeting.

“It’s not just aspirational statements. It is real money to do real things that are going to solve real problems.”

The cash will come from city reserve funds, along with $77 million flowing from the federal government.

The decision came after several brutally honest presentations painted a bleak picture of the risks of doing nothing.

During one panel during Monday’s hearing, John Bunting, a business development manager at PCL Construction, described the magnitude of the vacancy dilemma facing Calgary.

If the city was “able to convince Apple HQ and Google HQ to relocate to Calgary tomorrow, combined they would not even fill half of the 12 million square feet of vacant office space available today,” Bunting said.

The issue of downtown office vacancy has been dragging along like an anchor behind Calgary since oil prices collapsed in 2015, vaporizing thousands of jobs.

The vacancy rate now hovers around 30 per cent.

Since 2015, the value of the downtown buildings has plummeted by $16 billion. In just a few years, about $320 million of taxes have had to be shifted on to other businesses — and to homeowners.

It sparked the city to adopt a number of expensive one-off programs to shelter businesses outside the core from facing massive tax hikes during the annual property reassessment process.

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Now, the pandemic has more people working from home. It’s unclear exactly how many employees will return to the offices once the crisis passes.

Amid this uncertainty, it will be essential to see more people live in the area or come downtown for arts and cultural gatherings, to attend sporting events and festivals, enjoy the nightlife and go to restaurants.

To help address downtown office woes and stabilize values in the next decade, about six million square feet of vacant office space must be removed from the mix, either from conversions, demolition, or from new tenants moving in.

City documents show 28 potential empty office buildings have been identified that could be converted to residential space, student or seniors housing, or other uses.

An incentive program will be designed to get such projects off the ground.

“It has the opportunity to work,” said Jenna Dutton, a research co-ordinator at the University of Calgary’s Urban Policy Platform, who co-wrote a report advocating for the conversion of local office space to residential or mixed uses.

“It is a start. It needs to be part of a bigger picture.”

During the meeting, Aspen Properties executive chair Scott Hutcheson spoke bluntly about the challenges facing the downtown and its ability to attract outside investment without a strategy to fix the core’s challenges.

“Calgary is a no-fly zone for institutional capital today,” he said. “Our brand is hurt … I know we can turn it around.”

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The broader downtown plan isn’t just about vacant buildings. It also strives to make the area more vibrant and find ways to pull more people into the area, such as through the Arts Commons development.

What is clear is Calgary’s downtown is critical for the rest of the city.

The greater downtown area has historically generated 40 per cent of non-residential tax revenue and been home to about one-quarter of all jobs in Calgary.

In a statement, Calgary Chamber of Commerce interim CEO Murray Sigler said adopting the plan will advance necessary work to “build on the vibrancy of our downtown.”

The investment blueprint won the support of council in a 10-3 vote, although Coun. Sean Chu opposed its costs — expenses are expected to grow over time —  while Coun. Jeromy Farkas questioned a lack of specific measures to improve safety for those living and working in the area.

Those are legitimate issues.

However, doing nothing, as many people said during the hearing, keeps the status quo in place.

The downtown has limped along for years, with people crossing their fingers and waiting for the economy and oil prices to roar back.

The energy industry is evolving, but jobs in the oilpatch are not returning like they did a decade ago. The tech industry is making strides but will take time to grow.

Monday’s decision might not be perfect; it will cost money.

The new plan comes from months of research and examining other cities that have charted a similar path. It embraces a broad consensus carved out by business leaders, academics, industry groups and Calgary’s economic development authority.

Now, city council is on board.

It’s time to get busy and start patching up the big problems with downtown Calgary.

Chris Varcoe is a Calgary Herald columnist.

cvarcoe@postmedia.com