Calgary Decision: Will the future of downtown become an electoral issue? – Calgary | The Canadian News

As Calgarians head to the polls in October, the city’s mayor hopes the city center isn’t an afterthought.

There are currently five buildings downtown that are vacant, including the former Nexen building at 7 Avenue SW, which adds 600,000 square feet to the downtown office vacancy problem.

According to Avison Young, the downtown office vacancy rate has risen from six percent to about 30 percent after the oil price collapse seven years ago.

Susan Thompson, Alberta information manager with Avison Young, said there are currently 14 million square feet of vacant office space downtown.

“Average office space occupancy is 150 to 250 square feet per person,” Thompson said. “So 14 million square feet is a lot of jobs that no longer exist in downtown Calgary.”

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Impact of the center on taxes

The exodus from downtown Calgary has also had a ripple effect on the city’s finances.

The reduction in property values ​​in the core has forced the city council to find that tax revenue elsewhere, which has contributed to increasing property taxes for businesses across the city.

“What (the city council) has done in response over the last few years has been really aiming to raise the same amount of dollars from businesses,” said University of Calgary associate professor of economics Trevor Tombe. “But with fewer dollars coming from downtown non-residential properties, it has meant big tax increases for businesses elsewhere.”

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To deal with the problem of dramatic property tax increases for businesses outside of the city center, the city council began work on a tax change in 2019. That led to millions of dollars in cuts to utility services. the city, as the city council tried to bring property tax rates for businesses and homeowners more in line.

“So right now they collect about 48 percent of the city’s revenue from businesses, that’s less than 56 percent in 2014,” Tombe said. “A better approach for the city would not be to target that many dollars it collects from businesses versus homeowners, but rather to ensure that tax rates between businesses and homeowners are stable with each other.”

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Tombe said he believes the city council should have acted faster in response to the burden that falling property taxes in the center of the city had on revenue.

“One can only assume that they, like the provincial government, were only expecting a rebound in the energy sector and therefore an increase in activity that would spare them tough decisions,” Tombe said.

However, without a clear sign that oil prices would rebound to boom levels, the city council has shifted its approach to tackling the problem in the city center.


Click to play video: 'Calgary Decision: What to do about downtown decline'



Calgary decision: what to do about the decline of downtown


Calgary decision: what to do about the decline of downtown

The future of the city center

Earlier this year, the city council approved the Greater Downtown Plan, along with $ 200 million in seed funding to kick-start the strategy to revitalize downtown.

This financing includes incentives to remodel empty office spaces in residential areas and incentives for Plus 15 connections to residential developments.

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$ 80 million of the funds will also be allocated to the Arts Commons transformation project.

According to the city, the center’s strategy will focus on reducing office availability, improving the vitality of the center and supporting the development of areas that attract residents, visitors and businesses.

“Our job is to change our core from what it really was a workplace to a place to live and a place to do things, an active tourist destination,” said Downtown Strategy Program Leader Thom Mahler. . “That will bring in the talent to help fill those office towers.”

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However, its $ 1 billion in public and private investment will be needed over the next 10 years to fully execute the center’s strategy.

According to Mahler, the success of the city is linked to the success of the city center and depends on private investment in the local economy.

“We can build all the infrastructure we want, but if we don’t see the investment in real estate and we don’t see businesses and companies that are located here, it will not achieve that increase in the value of the property that we are also targeting. “Mahler said.

According to the city’s website, the city center will not be the same as it was before the pandemic, or as it was 15 years ago due to work-from-home orders and changes in the energy industry.

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Avison Young has also observed those changes in the market, noticing a change in the most recent leasing agreements for office space for technology companies and the agri-food industry.

“We used to deal with tenants who occupied multiple floors and buildings, sometimes even entire buildings, whereas today the average deal we do is less than 10,000 square feet,” Thompson said. “It has been quite active because there are many companies that are being formed as a result of the changes that have occurred in the market.”

Outgoing Mayor Naheed Nenshi said he hopes to see candidates running in the upcoming elections questioned about their views on the revitalization of the center and their visions for the future of the nucleus.

“I think it would be a very fair question to ask the candidates what their plan for the city center is, how is it different from the city plan, and if so, why?” Nenshi said. “If not, how are you going to get the rest of the money to fund the existing plan?”

Calgarians will go to the polls on October 18.

–With files from Adam Toy of Global News

© 2021 Global News, a division of Corus Entertainment Inc.



Reference-globalnews.ca

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