Calgary city council will be asked to approve $200 million to fund a plan aimed at revitalizing the downtown core at their meeting on Monday.
Calgary’s Greater Downtown Plan has already been endorsed by the city’s Planning and Urban Development Committee earlier this month, but needs the initial investment to implement it.
The 10-year plan sets out strategies to attract more people to live, seek entertainment and work in the downtown, while simultaneously lowering the vacancy rate in the core.
It’s $200 million, which is a big number,” Ward 7 city councillor Druh Farrell said. “But the payback will be significant; the cost of doing nothing is more significant.”
Plan to revitalize Calgary’s downtown seeks to attract more people to live, work, play
$80 million would fund the first phase of the Arts Commons transformation project.
$55 million of the initial money would be earmarked to create a program to fund vibrancy projects in the downtown core.
Other funds would be directed to programming and a dedicated team to oversee the implementation of the plan.
“It’s an area that we have extracted value for many years, and not reinvested for a very long time, and it shows,” Farrell said. “So now this is about reinvestment.”
That value has seen a decline in recent years as office towers are emptying out.
There is 12 million square feet of vacant office space in the downtown core, city documents show, which translates to a vacancy rate of 30 per cent.
According to those city documents, downtown office property values have declined by $16 billion, or 60 per cent, since 2015.
In an effort to lower the office vacancy rate to low double digits, the funding would include $45 million to incentivize office to residential conversion, redevelopment, or adaptive use projects for post secondary institutions.
“That would all be money and activation that would not happen otherwise, there’s there’s lots of people looking at these office buildings and trying to make the numbers work, and they just don’t,” City of Calgary urban initiatives manager Thom Mahler said.
“They need an incentive to move ahead with it.”
Calgary’s downtown office vacancy rates hit record levels amid oilpatch woes
The city’s request to council proposes the $200-million investment be funded with $60 million from the budget savings account, $63 million from the Fiscal Stability Reserve and $77 million from the Canada Community Building Fund.
According to city officials, the needed investment over the next 10 years is at $1 billion.
The city estimates an investment of $450 million by 2031 would be needed to reduce the vacancy rate to 13 per cent. The report said $500 million would also be needed over the next decade for downtown vibrancy infrastructure and amenities.
“The initial investment proposed in the report represents only 20 percent of the overall need to get started,” a city report said. “We will need to look hard at alternate sources of funding and support from other orders of government to help address 80 percent of the funding gap.”
Ward 6 city councillor Jeff Davison said the key to a successful revitalization is attracting private sector investment to the core.
“The time is now, the opportunity is before us, it is time to capitalize not just in the short term, but what does that look like over the long term with private sector partners,” Davison said. “Setting up the right regulatory environment provides security and certainty for those investments, and over the long term that’s what the goal of this strategic document is.”
City council will make their decision on Monday.
–With files from Global News’ Adam Toy
© 2021 Global News, a division of Corus Entertainment Inc.