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Revitalizing Calgary's core: Some possibilities for rebirth

'Calgary has reinvented itself before ... from a ranching/agriculture-based economy to oil and gas'

By Richard White, CBC News Posted: Jun 17, 2016



While it is shocking that Calgary's downtown skyscraper vacancy rate skyrocketed to 20 per cent at the end of March, and that it could soon surpass the vacancy record of 22 per cent set in 1983 (twice what it was a year ago), we should keep some perspective.


These numbers are not unheard of in major corporate headquarter cities.


Back in the 1970s, New York City was in decline. By the mid-70s, the city came close to bankruptcy and its office vacancy rate hit 20 per cent.


In 1993, Toronto's downtown office vacancy rate hit 20.4 per cent. Vancouver's rose to 17.4 per cent in 2004. And these may not even be records, as data only goes back to 1990 for those cities.


Today, New York City, Toronto and Vancouver's downtowns are booming. All downtowns go through periods of growth, decline and rebirth.



Montreal's decline and rebirth


In the '60s, the case could still be made Montreal was Canada's business capital. Its downtown was a major office headquarters for Quebec's natural resource industry as well as a thriving financial industry, including the head offices of the Bank of Montreal, Royal Bank of Canada and insurance giant Sun Life.


In 1962, when the Place Ville Marie office designed by iconic architects I.M. Pei and Henry N. Cobb opened, it symbolized Montreal's arrival as a world-class city. This was further reinforced with the hosting of Expo '67, the arrival of Montreal Expos baseball team in 1969, and the 1976 Olympics.


However, the '70s brought the threat of separation, which prompted many corporate headquarters and their executives to move to Toronto. By 1971, Toronto's population surpassed Montreal's. The 1976 Montreal Olympics, the most expensive in history, plunged the city into a legacy of debt and decline for decades.


Today, Montreal has reinvented itself as an international tourist destination and a major player in the gaming and music industries.



New York's return from the brink


In 1975, New York City was on the brink of bankruptcy.


The gradual economic and social decay set in during the '60s.


The city's subway system was regarded as unsafe due to crime and frequent mechanical breakdowns. Central Park was the site of numerous muggings and rapes; homeless persons and drug dealers occupied boarded-up and abandoned buildings.


Times Square became an ugly, seedy place dominated by crime, drugs and prostitution.


Today, New York City is back as one of the world's most successful cities, economically and culturally, and Times Square is again one of the world's most popular urban tourist attractions.



Calgary's future


Perhaps Calgary has already begun to reinvent itself.


Despite the growing vacancy rate downtown, the CBRE's First Quarter 2016 Report says, "Not all commercial real estate in the city has been affected, though. Suburban office space held steady from the last quarter, and the industrial real estate market is still robust because it's not tied to oil and gas."


Indeed, Calgary has become one of North America's largest inland port cities, including two state-of-the art intermodal rail operations. Calgary is now the distribution headquarters for Western Canada, a position once held by Winnipeg. And so Calgary's industrial sectors employ more people than the energy sector.


Calgary Economic Development is working with the real estate community to implement a "Head Office/Downtown Office Plan" with three action items.


One idea is the repurposing of smaller older office spaces as incubators and innovation hubs to attract millennials and/or entrepreneurs.


A good example of this is in West Hillhurst, where Arlene Dickenson has converted an old office building at the corner of Memorial Drive and Kensington Road that was once home to an engineering firm into District Ventures, home to several startup packaged goods companies.


Another repurposing idea would be to convert some older office buildings into residential uses.


In the U.S., programs like Vacant Places Into Vibrant Spaces have been successful but mostly for office to residential conversions of older buildings with smaller floor plates.


They don't work for offices buildings with floor plates over 7,500 square feet (which is the case for most of Calgary's empty high-rise office space), as it is expensive and difficult to meet residential building codes, which are very different from commercial ones, making it tough to compete with new residential construction.


In an ideal world, Calgary could become a global talent hub, where skilled workers who have been displaced from the energy and related industries continue to live in Calgary but become a remote workforce for energy projects around the world. Temporary and permanent satellite offices could be established in Calgary with teams of engineers, geologists, accountants, bankers etc. working on projects around the world.


The obvious strategy would be to woo international companies in the finance, insurance, transportation, agriculture, digital media and renewable resources to set up a Canadian or North American office in Calgary, maybe even relocate here.


With cities like San Francisco, Seattle and Boston facing major affordable housing crises for millennial workers, Calgary could become a very attractive place for a satellite office for companies in those cities.


One "off the wall" idea postulated by George Brookman, CEO of West Canadian Industries, would be to promote Calgary as an "International Centre for Energy Dispute Resolution," similar to the Netherland's TAMARA (Transportation And Maritime Arbitration Rotterdam-Amsterdam), which offers an extrajudicial platform for conducting professional arbitration for settling disputes.


However, one wonders: Could Calgary compete with London and New York, which are already leaders in the international arbitration business?



Incentivize rebirth


Calgary has reinvented itself before, evolving from a ranching/agriculture-based economy to oil and gas in the middle of the 20th century.


Indeed, the downtown core, which is an office ghetto today, would benefit immensely if incentives could be made to convert a dozen or so office buildings into condos, apartments or hotels to foster a rebirth of the core as a place to live.


Calgary at a Crossroads is CBC Calgary's special focus on life in our city during the downturn. A look at Calgary's culture, identity and what it means to be Calgarian. Read more stories from the series at Calgary at a Crossroads.



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C'est bien. Je partage l'opinion selon laquelle Calgary a acquis d'autres points forts au cours des années, notamment en transport terrestre et centre majeur de distribution. Il faudrait aussi mentionner que sa population est bien instruite, et que ses talents pourraient bien s'exercer dans des domaines connexes.


Mais il y a un point particulier à ne pas négliger: la fiscalité provinciale (jusqu'à présent avantageuse). Celle-ci a sans doute constitué un motif important dans le choix de cette ville pour des établissements/entreprises d'envergure nationale ou régionale (tout l'ouest du Canada). Or, la baisse du prix du pétrole porte un coup très fort aux recettes du gouvernement albertain, entraînant des déficits budgétaires qui ne sont pas soutenables à moyen/long terme. Cela laisse présager des hausses de taxes et d'impôts qui pourraient faire disparaître l'avantage albertain --donc de Calgary. Il ne faut pas oublier que le niveau des dépenses publiques per capita y dépasse largement la moyenne nationale, et qu'il n'est pas facile de revenir en arrière (coupures de postes, baisses de salaires, suppressions de programmes etc.).

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