A program designed to start turning around Calgary’s downtown vacancy problem is now open for applications.
The Downtown Calgary Development Incentive Program offers property owners a grant to redevelop vacant office space into residential space.
It hopes to address the 32.6 per cent vacancy rate and help remove nearly half of the 14 million square feet of downtown office space sitting empty.
“This is an issue with wide-reaching impacts,” Thom Mahler, program lead for the city’s downtown strategy, said in a statement. “High downtown office vacancy means low downtown property values which creates property tax burdens to residential and commercial properties outside the downtown core. This program is part of the city’s effort to stop that shift.”
Applicants could get $75 per square feet, up to $10 million, for the renovation project, but must meet criteria that includes evidence of project financing and the applicant’s track record.
Part of the Greater Downtown Plan that council approved in April, the incentive program is currently only being offered in the downtown core, areas south of Eau Claire and Chinatown, west of 3 Street S.E., east of 9 Street S.W. and north of CPR’s main line.
Trent Edwards, Canadian prescient of land and housing at Brookfield Properties Development and co-chair of Calgary Economic Development’s real estate sector advisory committee, said incentives are required to stimulate the often complex and expensive investment of office-to-residential conversion.
“Similar public investments have also been made in cities such as Denver, Nashville, Austin, Pittsburgh, Houston and Detroit to successfully improve vibrancy, private investment and tax base,” Edwards said in a statement.
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“The status quo or ‘do-nothing’ scenario for Calgary’s downtown office vacancy rate is the biggest risk to downtown vibrancy, Calgary’s economic competitiveness, and the city’s fiscal sustainability.”
City council approved $45 million for conversion incentives and city officials have previously said if demands for the program are greater than that, they will go back to council with a larger request.
The second phase of an incentive program to allow for office conversions to other things like schools or event spaces is expected to begin in 2022. Applications for the first phase close on Sept. 15.
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