National Post (National Edition)
Calgary's downtown slowly rises from its slumber
After suffering through a nightmarish two-year pandemic, downtown Calgary business owners are starting to see a reawakening. People are coming back.
New data that measures the pace of people returning to downtowns in 23 North American cities highlights a promising trend.
Calgary has seen the second-strongest recovery of downtown weekday foot traffic from pre-pandemic levels among six Canadian cities — and it's ranked fifth among 23 centres in North America, according to an index from commercial real estate services firm Avison Young.
“It tells us we have a lot more people coming back to work downtown than competitive marketplaces in other cities,” said Todd Throndson, Avison Young's managing director in Calgary.
“That tells us companies are confident with regard to having their people back.”
Avison Young's index is based on aggregated cellphone location data that is geofenced to downtown areas. More phones mean more people in the core.
As of last week, foot traffic is down 62 per cent across all of the Canadian and U.S. cities since the pandemic started in March 2020, with the steepest decline seen in Ottawa at 80 per cent.
The smallest drop-off was in Austin, Texas, with a 42 per cent decline, while Edmonton was ranked third at 48 per cent, and Calgary was close behind at 49 per cent.
It isn't a recovery that will prompt business owners to do cartwheels.
Yet, it shows some vibrancy is starting to return to the core after two miserable years of layoffs, lockdowns and retrenchment.
“I am turning people away now at lunches and I haven't said that in over two years,” said Jeff Hanna, co-owner of the Barcelona Tavern in downtown Calgary.
Hanna's sales are down 18 per cent from 2019. But in the past two months, his business has increased by about 40 per cent from earlier in the year.
Similarly, retailers are seeing an upswing in customers walking through store aisles, which began shortly after employees began returning to office towers in March as provincial work-from-home health orders were removed.
“It's not 100 per cent back to normal by any means, but if you compare it to six months ago, it's like night and day,” said Elena Achilleos, owner of La Chic designer clothing store in Bankers Hall.
“It's very busy down here.” Other indicators are pointing in the same direction.
The number of vehicles parking in city-owned lots is rising, up 96 per cent during the first three months of 2022 from a year earlier.
Calgary Transit, which saw its ridership languish around 40 per cent of pre-COVID numbers in January and February, says levels increased to 54 per cent this week, and they're projected to recover to 65 per cent by September.
“The food courts are humming. There are people out there,” said Brad Parry, chief executive of Calgary Economic Development.
“You are starting to see people wanting to come back and see that interaction happening with their co-workers.”
Data collected from pedestrian traffic counters on Stephen Avenue are also trending upward, 137 per cent higher in the first three weeks of April compared with the first three weeks of January, according to information from the Calgary Downtown Association.
The lifting of work-from-home orders has coincided with an improving economy, the return of US$100-a-barrel oil and soaring natural gas prices.
Colton Lewis, president of junior oil and gas producer Cleo Energy Corp., said he increased staffing in the business by about 10 per cent in the last quarter as more projects became economic.
Lewis, who also owns the Pioneer Event Co. hospitality firm located on Stephen Avenue, said the company's bookings are at their highest point in four years.
“It's been a long time coming and the businesses that have stuck around downtown knew there would be a turn for the better — and it feels like it's finally happening now,” said Lewis, who is also co-chair of the Calgary Downtown Association.
“We have this opportunity with the increase in commodity prices to just get back on track much, much quicker than any major city.”
Calgary's downtown office market, another barometer of the area's chronic economic woes, is slowly heading in the right direction.
A report released this week by Avison Young said the downtown office vacancy rate fell to 28.9 per cent in the first three months of the year, almost a full percentage point dip from the fourth quarter.
Companies are coming off the sidelines and moving into higher-quality properties. There is also increased confidence for tenants to sign longer-term leases with an economic recovery underway, fuelled by stronger commodity prices.
However, there are many obstacles to overcome.
The downtown is still quiet once the workday ends. Calgary has the highest downtown office vacancy rate among 10 major Canadian cities, almost double the national average, according to a recent study by CBRE.
Another wave of COVID-19 could derail plans by employers to bring staff back to the office, while inflation is running at its highest point since 1991.
Leslie Echino, owner of Annabelle's Kitchen Downtown, noted some large corporations are only bringing back workers to the office for a few days each week. While her business has picked up, it remains well below pre-pandemic levels.
“When you are at absolute zero, everything is a positive turn,” Echino said. “It's not going to be as simple as opening the doors and people come in.”
It will take a while for a recovery to take root. It will be uneven.
But for the first time in a couple of years, Calgary's downtown is seeing early signs of a much-needed revival.