Council approves $10M fund to revitalize downtown core
The City of Calgary has set aside $10 million to help revitalize a struggling downtown, amid a record-high office vacancy rate that’s expected to worsen when two new towers open this fall.
Council approved taking $10 million from the rainy-day fund to start the Economic Development Investment Fund, which will respond to the ongoing economic downturn, in a 14-1 vote.
“This is something we need. We need the city to have some skin in the game as we look at economic resiliency and economic growth,” said Mayor Naheed Nenshi.
Calgary’s elected officials spent several hours Monday discussing how to create jobs and fill 12 million square feet of unoccupied office space downtown, following an invitation-only spring summit that brought together 160 people to talk about fixes for the pressing issue.
Calgary’s city centre is considered an economic driver that historically generated 40 per cent of non-residential tax revenue and employed a quarter of Calgary’s workforce.
But the downtown vacancy rate was a record high 25 per cent in 2016 and is projected to rise to 27 per cent later this year when two new offices (totalling nearly two million square feet) open, according to projections from the Conference Board of Canada.
The organization’s research shows Calgary is unlikely to see any new investment in downtown office real estate for at least 12 years, and it will take about a decade for the existing space to be absorbed.
“The old phrase that this too shall pass is just not going to be the case in the future,” said city manager Jeff Fielding, noting the $10-million infusion was a prudent place to start.
But Ward 13 Coun. Diane Colley-Urquhart, the lone council member to vote against the fund, said it’s not the municipal government’s job to manage the economy.
“If we go down this slippery slope of the expectation being there that this is what government should be doing, and more handouts, and so on and so forth, that’s where it really concerns me a lot,” she said.
A recommendation to set aside $2 million for the Calgary Arts Development Authority to invest immediately in 10 arts organizations was delayed until July in a 10-5 vote.
Michael Brown, president and CEO of the Calgary Municipal Land Corp., told council that without help, half of those arts organizations could soon be out of business.
Colley-Urquhart told reporters giving money to specific groups would pre-empt the city’s November budgeting process and the funds weren’t a priority for the citizens she’s talked to.
“When I’m door-knocking and I see houses that are empty with no furniture because people are having to sell off all of their assets before they lose their house, people don’t relate to this conversation we’re having today,” she said.
But Ward 7 Coun. Druh Farrell said other struggling cities have found success with similar economic development funds.
“What we’ve been hearing from the mayors who’ve gone through the regeneration and transformation of their cities’ economy, everyone of them has said, ‘The city needs to take an active role in economic development,’ ” Farrell said.
“We haven’t done that, historically. We have simply waited for the economy to bounce back … Nostalgia isn’t a good economic strategy.”
A list of 67 short, medium and long-term actions created after the downtown economic summit in March to tackle the vacancy issue include having post-secondary institutions expand their presence in the core and repurposing existing downtown real estate.