City announces new downtown office-to-residential conversion
Calgary announced another downtown office-to-residential conversion Wednesday afternoon, which will take nearly 100,000 square feet of office space off the market.
Included in the announcement was news that a previously approved residential conversion is shifting to a hotel development, while another is moving into its second phase of development.
The announcement comes as the city will consider adding more than $54 million in bridge funding for affordable housing initiatives in its 2024 budget — half of which would support a program encouraging post-secondary institution conversion projects.
“We're blown away by the level of interest by the development industry,” said Thom Mahler, director of downtown strategy at the city.
The Dominion Centre, at 665 8th
St. S.W., which is steps away from the 8th Street S.W. Ctrain, will become 132 homes over 10 floors — 25 per cent of which will be rentals at affordable rates, a requirement on the funding received from the Canada Mortgage and Housing Corp. (CMHC).
The conversion is also getting $1.2 million in grant funding “to help offset the design, construction and performance verification costs that are related to emissions reductions and climate resilience measures,” Mayor Jyoti Gondek said at the announcement.
The space is being developed by Alston Properties and Slate Asset Management. Meanwhile, the Canadian Centre, at 833 4th Ave. S.W., is being retrofitted into a hotel. When the conversion was announced in July 2022, it was expected to be converted to short-term residential housing with more than $12 million from the city. It's being developed by the PBA Group of Companies.
None of the PBA'S representatives was at Wednesday's announcement.
“I think one of their components is we have a shortage of hotel spaces within the city, so there was an opportunity to go full hotel and it still worked for them,” Mahler said, adding it's in a location downtown that doesn't have many hotels.
The city provides $65 per square foot for hotel conversions — $10 less than the $75 per square foot provided to residential conversions. The city had previously adjusted its terms of reference to include a specific provision for hotels, Mahler said.
“The main driver of our program is to remove office space. The more office space we remove, the better the property values recover within the downtown,” he said.
Mahler said the revised plan has been received well among Calgary hoteliers.
The city recently paused accepting applications due to high demand. Two more projects haven't been announced and six more are still in the pipeline, the city says, which would exhaust its budgeted $153-million program.
The city is applying for $54.4 million in bridge funding in the upcoming budget cycle, which lumps together affordable housing initiatives covering secondary suite incentives, a land fund to increase the number of parcels available for development and funding for a city program that helps people access non-market housing.
Mahler said $25 million of that package would be set aside for post-secondary conversions.
“We're also continuing to talk with the provincial government and federal government about potential funding options to support our programs,” Mahler said.