DOWNTOWN REVIVAL
`Significant' price tag
A proposed plan to rescue Calgary's ailing downtown will come at a “substantial” cost to the public purse, civic officials said Thursday.
City council will be asked to vote later this month on a formal request for money for the city's proposed new downtown plan, which was endorsed by a city committee last week. Among other things, the plan includes a proposal to create taxpayer-funded financial incentives for developers to convert empty office towers to residential buildings, as well as public investments in streetscape improvements and capital projects aimed at improving the look and feel of the downtown.
Funding would also be provided for festivals and other public events aimed at bringing vibrancy and people into the core.
While an estimated price tag for the proposed plan has not yet been made public, Mayor Naheed Nenshi said Calgarians should expect it to be “big.”
“It'll be coming to council . . . with a pretty significant financial ask,” Nenshi said in a speech during Calgary Economic Development's annual Report to the Community on Thursday. “I hope council will support that investment into Calgary's future and that that will attract funding from the federal and provincial governments.”
City council has been wrestling for years with Calgary's “downtown problem,” caused by the collapse in oil prices and years of recession, layoffs and consolidation in the energy sector.
Approximately 30 per cent — or about 12 million square feet — of the office space in the city's core now sits empty. Since 2015, the city's downtown has lost $16 billion of property value, forcing a shift of the tax burden onto businesses outside of the core as well as residential ratepayers.
CED president and CEO Mary Moran told reporters Thursday that the investments required in the downtown are significant, but if property values in the downtown are allowed to continue to erode as they have been, it will be more costly in the long run.
“The alternative is rising taxes,” Moran said. “There isn't a choice, to be quite honest.”
Moran added that while a wellthought-out downtown plan will require an initial civic investment, the goal is to ultimately attract even larger private sector contributions.
“We've talked to a lot of cities about how they've gotten there, and it's always required government investment initially to spur it, but the payback in long-term private sector investment is quite significant,” she said. “It's a space where government has to play to spur that investment and spur that change.”
In an interview, Coun. Jeff Davison said public investment is “absolutely” required. He said a significant amount of work is needed in the downtown if Calgary wants to be able to attract new companies and businesses in the future.
“I don't know what the recommendation coming is yet. But, look, whether it's the city or the private sector doing it, the downtown is going to require between half a billion and a billion dollars worth of investment,” Davison said.
Coun. Druh Farrell, who also supports the downtown plan, said key to any revitalization project will be getting more people living in the downtown. While office-to-residential conversions have long been floated as one solution, Farrell said it's unlikely that developers will take on that risk without some kind of financial incentive.
“It is far more expensive to convert an existing building than it is to build new elsewhere,” she said. “But we know conversions have to be part of the solution.”
Farrell added the city needs to commit to an entire reimagining of the area, as it did with the East Village revitalization project. There is no time to waste, she said.
“To turn the downtown around, we need to act,” she said. “We've been ponderously reviewing the downtown problem for years.”
In addition to the core, Calgary's proposed downtown plan covers downtown west, the Beltline, Eau Claire, Chinatown and the East Village. Its stated goal is to “move beyond the traditional 9 to 5 business district toward a vibrant city centre people enjoy 24/7 with a balanced mix of residential, office, retail, entertainment, tourism and culture.”