Developers and architects looking at how to redevelop buildings in Calgary’s greater downtown got more clarity on what an incentive program could look like.
On Tuesday, the city’s priorities and finance committee approved the terms for the first phase of that program, to spur office-to-residential refits.
“We had requested (city) administration to create details on how they were going to decide who gets the grant for conversion and it sounds like that work is near completion, if not complete,” Calgary Mayor Naheed Nenshi said. “We’ll be able to open up that process soon.”
Running from August to December, the first phase would offer grants of $75 per square foot based on the original area of the building to be converted, up to a maximum of $10 million from an existing $45 million in a first tranche of funding.
Calgary’s offer of incentives follows other U.S. cities that have rejuvenated their downtowns with similar grant models.
“There was some sort of funding that in all the cities, whether it’s Philadelphia, Detroit, Dallas Houston, Chicago … that we talked to,” said Hannes Kovac, chair of the city’s real estate sector advisory committee. “They all had quasi-government or government institutions that lead some sort of a funding initiative.”
Kovac said the City of Houston tracked its return on investment for a similar initiative, calling those results “very impressive and very powerful.”
“It showed that the initial public investment is followed in subsequent years by multiples in dollars in private investment.”
Kovacs said the Calgary numbers show similar benefit.
“You put $450 million in, you will get $580 million out — both measured over a period of 10 years,” Kovacs said.
“In the business world, we call this a no-brainer investment.”
If approved by city council, the first phase would open applications in mid-August and run for a month.
The second phase is anticipated to begin in 2022, allowing for additional conversions to things like schools, event space or other adaptive uses.
“Downtown needs more grocery stores,” Kovacs added. “If you look at a city like Philadelphia, when they started their conversion program in the 1990s, they already had three grocery stores downtown. Today they have 33 and Calgary right now has one in the East Village.”
The committee also approved shifting capital funding for culture to a pair of projects downtown: $11 million for the Glenbow Museum revitalization and $4.5 million for the Fort Calgary renovations and new museum.
Nenshi said it made sense to get those projects “over the finish line and start building.”
“It’s not that those other projects aren’t important, but the money has been parked for a really long time and they’re not really ready to go, where we have two projects that just needed a little bit more so that they can actually get going, create jobs and build,” Nenshi said.
The mayor said he had some “tricks up my sleeve” to be able to replenish funds from those other areas.