Varcoe: Province must do more after giving ‘pittance’ to downtown Calgary revival

Shortly after he spoke to the Calgary Chamber of Commerce last winter, I asked Finance Minister Travis Toews if the UCP government was going to help Alberta’s two largest cities fill their empty downtown office towers.

It’s the province’s role to create a competitive business environment to grow the economy, he said, adding: “I’d suggest that the province shouldn’t be putting out a specific program for vacancies in both of our major cities.”

That went over like a lead balloon in Calgary, where about one-third of office towers sat empty.

The Kenney government soon assembled a working group to examine Calgary’s downtown issue. The study is now working its way through the government.

In Thursday’s latest provincial budget, some money finally arrived, but not much. Four-million dollars each to Edmonton and Calgary, and another $1 million apiece to downtown business associations in both cities.

In Calgary, the small sum went over poorly, like giving socks out as a Valentine’s Day gift.

“Five-million dollars doesn’t get you anywhere and doesn’t do anything. The only positive is there’s a recognition that we have to do something,” said Hannes Kovac, CEO of commercial real estate company Opus Corp.

“It’s better than nothing, but it is a joke.”

Mayor Jyoti Gondek was also unimpressed.

“It is a pittance,” she said Monday in an interview.

The mayor points out city council has already approved a comprehensive plan to earmark $250 million for downtown rejuvenation. The provincial contribution amounts to just two per cent of the total.

So when Toews got up Monday to speak at a sold-out chamber luncheon address, the first question he faced from CEO Deborah Yedlin was about assistance to the downtown.

And this time, the finance minister left the door open, ever so slightly.

“Our work is not done there and the book is not closed,” Toews told the crowd of about 250.

“We will be a willing partner and a co-operative partner of finding solutions for downtown.”

For Gondek and the city, the response provides a sliver of hope.

But it’s not a concrete promise of more cash.

“It’s always nice to hear the book is not closed, but I just wonder, if he didn’t put the money in the budget, where is it magically going to come from?” the mayor said.

“How many more consultations and roundtables do you need to have?”

Mayor Jyoti Gondek speaks to reporters following the release of this year’s provincial budget at City Hall. Thursday, February 24, 2022.
Mayor Jyoti Gondek speaks to reporters following the release of this year’s provincial budget at City Hall. Thursday, February 24, 2022. Photo by Brendan Miller/Postmedia

Monday’s non-commitment also left a big target for the official Opposition to blast away at, just as it did a year ago.

On Monday, NDP MLA Shannon Phillips called it shameful that Toews arrived empty-handed for the downtown.

Just last month, NDP Leader Rachel Notley pledged at a chamber event to provide $100 million in funding for downtown office conversions, more affordable housing and small business grants, if her party wins next year’s provincial election.

The reality is more help is needed — soon.

The vacancy rate is still staggering with more than 13 million square feet of empty office space in the core.

This year’s city assessment data shows downtown office properties hemorrhaged $1.1 billion in value over the previous 12 months. They’ve lost more than $17 billion over the past seven years.

The trend has shifted hundreds of millions of dollars of taxes onto businesses outside the core.

How much more time does the province need to study this issue?

“We really need funding to accelerate the process,” Yedlin said after Monday’s event.

“We don’t have the luxury of time.”

Downtown office towers in Calgary on Wednesday, January 12, 2022.
Downtown office towers in Calgary on Wednesday, January 12, 2022. Photo by Darren Makowichuk/Postmedia

City council developed its own downtown revitalization blueprint last spring. It offered $45 million in incentives to encourage the conversion of office buildings into residential units, an amount since bumped up to $100 million.

It also included $55 million to make the downtown more vibrant and $80 million for the first phase of the Arts Common transformation project.

A report by the province’s downtown working group will likely be released in March.

Two veteran business leaders who attended Monday’s speech say additional provincial money will be required, although they also preached patience.

“I would like to see more . . . $5 million is a good start,” said George Brookman, chairman of WCD Inc. and past-chair of Tourism Calgary and the Calgary Stampede.

“Clearly it’s not enough. It is symbolic, rather than an investment,” added veteran oilman Jim Gray, who co-founded Canadian Hunter Exploration.

“On the other hand, we have got to be very thoughtful about the definition of downtown revitalization . . . We don’t want to prepare for yesterday. We have to prepare for tomorrow.”

The Calgary skyline was photographed on Thursday, January 27, 2022.
The Calgary skyline was photographed on Thursday, January 27, 2022. Photo by Azin Ghaffari/Postmedia

The future of the downtown is evolving with more people working remotely during the pandemic.

We may see just how much it’s shifted in the past two years as work-from-home public health orders are lifted Tuesday and office employees begin to return to the core.

The energy sector is also undergoing a seismic transition. Key investment decisions in areas such as hydrogen development and decarbonization initiatives are being considered today.

Adding more vibrancy to the inner city, such as through converting old offices to apartments or bringing university faculties into the core, should take place.

But waiting another year, or two, must not be on the table.

Paralysis by analysis can’t become the order of the day.

“Still, we wait,” the mayor lamented.

Indeed, we still do.

Chris Varcoe is a Calgary Herald columnist.

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