Midtown Station | ?m | ?s | IBI Group

Calgcouver said:
Would work at a smaller scale if it was someone like Minto who knows what they are doing and would likely buildout as townhomes and 4 and 6 storey apartments with some commercial. Then it would build out in ~20ish years. Towers at this scale proposed aren’t economical and would take an eternity to build out even with a seasoned developer.
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Would a couple of high-rises built for rental be economical though? We’ve been seeing lots of rental high-rises being built.
 
CBBarnett said:
I always struggle with understanding this side of the development world - if the proposal is so outlandish to be not economic in almost any timeline, but any developer, why would the zoning create a marketable land lift at all here?

Why wouldn't the lift value float more closely to the use value of the land - i.e. if there's no market for towers now or far into the future, why isn't the land value just near the highest realistic development potential of today?

Relatedly, if the city burdens this new upzoned land with some requirements to make the zoning conditional on an LRT station contribution, wouldn't that reduce the uplift potential? If the problem is unrealistically high land costs, would a burden like an LRT station actually lower the value, and therefore paradoxically make it more likely to transact?
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Land lift only matters when the land transacts as you eluded to. But in calgary so many people have inherited land or got in so low that they will just sit on it instead of selling for what makes sense today. The problem isn’t so much that I can’t lowball what the land is worth in a realistic, short term development scenario, we always can. It’s more often that there are many delusional, greedy land owners that will get the crazy high density through a land use redesignstion and will often not budge significantly on price. They stick to the idea that the land is worth the max GFA it is zoned for.

These types of people are abundant here, and there are a lot of people in Calgary that hold land at a kings ransom for decades, waiting for the delusional massive payout that often never comes. People are not rational actors, so they will often hold price forever assuming they will hit it big in a future market condition that has yet to come and is completely unproven or supported by current numbers.

I would be supportive of taxation measures that crank up the tax rate based on the zoned land use. I’d like to see this with surface parking lots throughout the inner city too. Every time a parking lot goes in for a DP to continue it’s temporary land use, raise the tax rate. When handing out land use for lots of density, increase the tax rate proportionately. This would increase the carrying cost of leaving the land unproductive and underdeveloped and might stop people from shooting for the moon on density with every LOC. It would reduce land speculators that hold out for this lottery payout scenario.

The landowner has no skin in the game paying for the future LRT station they are asking for. Just looking for public dollars to be spent to enrich themselves. The city would not encumber the land with additional costs at land use, I don’t believe they have a mechanism of taxation that allows them to do that (they only really have OSLs, which the province seems to want to kill). If you want an example of a company that does this, Landstar is a good example. They don’t build anything and zone land to hold forever hoping for a massive payout someday. So why give them land use for above ARP densities in a lot of cases when they aren’t going to ever build.
 
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Cowtown said:
Would a couple of high-rises built for rental be economical though? We’ve been seeing lots of rental high-rises being built.
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Yes one or two might be if they have a pension fund or a similar end user in tow to buy it. But this landowner almost guaranteed does not. If Cidex owned this, maybe that could happen
 
Calgcouver said:
Land lift only matters when the land transacts as you eluded to. But in calgary so many people have inherited land or got in so low that they will just sit on it instead of selling for what makes sense today. The problem isn’t so much that I can’t lowball what the land is worth in a realistic, short term development scenario, we always can. It’s more often that there are many delusional, greedy land owners that will get the crazy high density through a land use redesignstion and will often not budge significantly on price. They stick to the idea that the land is worth the max GFA it is zoned for.

These types of people are abundant here, and there are a lot of people in Calgary that hold land at a kings ransom for decades, waiting for the delusional massive payout that often never comes. People are not rational actors, so they will often hold price forever assuming they will hit it big in a future market condition that has yet to come and is completely unproven or supported by current numbers.

I would be supportive of taxation measures that crank up the tax rate based on the zoned land use. I’d like to see this with surface parking lots throughout the inner city too. Every time a parking lot goes in for a DP to continue it’s temporary land use, raise the tax rate. When handing out land use for lots of density, increase the tax rate proportionately. This would increase the carrying cost of leaving the land unproductive and underdeveloped and might stop people from shooting for the moon on density with every LOC. It would reduce land speculators that hold out for this lottery payout scenario.

The landowner has no skin in the game paying for the future LRT station they are asking for. Just looking for public dollars to be spent to enrich themselves. The city would not encumber the land with additional costs at land use, I don’t believe they have a mechanism of taxation that allows them to do that (they only really have OSLs, which the province seems to want to kill). If you want an example of a company that does this, Landstar is a good example. They don’t build anything and zone land to hold forever hoping for a massive payout someday. So why give them land use for above ARP densities in a lot of cases when they aren’t going to ever build.
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Gotcha I think - so to summarize in market economic terms, the land market attracts more sellers (landowners) than buyers (developers) for this type of density. This is largely driven by possible - but unrealistic - valuations of land potential, a cheap cost to create that entitlement (i.e. all it took was a redesignation), and minimal holding costs.

Taken together, this results in a situation where landholders can afford to wait for nearly forever - there is no downward pressure on their price expectations that requires them to adjust downward to meet a buyers price that is actually developable.

If this behaviour by the landowners became dominant in a market, the consequence seems like it would actually reduce actual development - too much land is sitting idle at far too high of a price, forcing development interest to move elsewhere or start competing on the fewer remaining parcels with landowners willing to transact at a reasonable price.

Two questions come to mind:
  1. In theory, what would happen if we overwhelm the landowners with supply? Something like the R-CG citywide proposal but for higher densities - make many, many lots have the same entitlements, therefore there's no scarcity of land exists to hang an imaginary price to. Or does that only work at lower densities where the land to support infill is more interchangeable because buildings are small, simple and relatively easy?
  2. If we just allow the ARP densities (and landowners and developers all believed that this was a hard maximum), would that create other problems? What if an area has real demand for additional density but a hard maximum exists that prevents it? Thinking of Marda Loop redevelopment here - the existing ARP is laughably low and realized development is much beyond it. Seems like this approach would solve some things, but create other problems.
 
Calgcouver said:
supportive of taxation measures that crank up the tax rate based on the zoned land use
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This is already the case. Zoning most definitely goes into the valuation model. It’s why we had the tax issues with the 17th Ave Popeyes a while ago—the owner went for rezoning and due to triple net lease the Popeyes paid the price.
 
It
Albertasaurus said:
Does anyone ever see this getting built? Has this developer ever built anything?
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I doubt this gets built in my lifetime. My guess is the landowner only wants to get the land use approved so they can flip it. Either that or they’re doing this for another company that wants to remain low profile for now.
 
Albertasaurus said:
Does anyone ever see this getting built? Has this developer ever built anything?
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Maybe, but not like shown in the rendering. It doesn’t cost anything to create a rendering with a bunch of high-rise towers, but it costs a lot to actually build it out. Look how long it’s taken for desirable area like University District to get built up.
I hate to be the Debbie downer, but if I were a betting man I would say there’s a 0.1% chance this gets built to what they are showing.
 
Sorry, but I highly doubt this will get built. If it was something like East Village, with CMLC, and a group of multiple developers, yes, I could see it being built, but this developer has no history and not even any online information.
These guys have less experience than the people building Harmony and look where that one is.
 
The CPC documents for next week are now posted, and indeed Midtown's outline plan is on the agenda:
Report, Background, DC Bylaw, Applicant Submission, Outline Plan, Fairview CA letter, Kingsland CA letter
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If you look at the outline plan you can see that the streets incorporate cycle tracks, similar to the Main Streets design used in Montgomery. Also interesting, if you look at the DC bylaw, the density across the entire site is capped at 2.0 FAR if no train station is built. So, they could do 4-6 storey wood frame condos, without the cost of building the train station if they want to.
 
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