General Construction Updates

[CalgaryTiger]

I wonder if we will get to a point where new office towers will be needed because of the success of conversions like this. I know we have a long way yet to go, but hoping that we incrementally approach a balanced market. Selfishly I just want Calgary to get a supertall.

I'd take a tall proposal (mixed commercial and residential, see the Stantec in Edmonton). Toronto's Supertall The One struggles and that market WAS crazy (granted mostly investor condos as far as I can tell).

doesn’t accrue a public good

Financially, on its face, no it does not. But more people downtown, even in market housing, is a good thing. I'd argue the market housing actually brings people with more disposable income which creates more retail and dining options and more of an economic churn. The concern was never a financial return on investment, IMO. It was about does this make Calgary a better city and not have huge negative affects on our budget? I think the answer is a resounding yes.

 

[MichaelS]

Financially, on its face, no it does not. But more people downtown, even in market housing, is a good thing. I'd argue the market housing actually brings people with more disposable income which creates more retail and dining options and more of an economic churn. The concern was never a financial return on investment, IMO. It was about does this make Calgary a better city and not have huge negative affects on our budget? I think the answer is a resounding yes.

I thought that was the ENTIRE reason? As in, we are so reliant on downtown tax revenue, we needed to do this to stem the bleeding and try and recoup that tax loss. Was the $121ish million successful in doing so? How long until we recover that investment? If the answer is never, how is that a good thing?

The vitriol we hear directed at suburbs is because they are not financially viable for the most part, needing a big subsidy. But somehow subsidizing the downtown is considered fine, because vibes?

 

[Albertasaurus]

I'd argue that the adaptive reuse of vacant buildings into residential and other uses is a public good from a "downtown revitalization" perspective. If we didn't create a program that incentivized finding a way to reuse existing vacant buildings, there'd be a risk of them sitting unused for decades like Plaza Tower in New Orleans (which may now be demolished sadly), or a number of skyscrapers in places like Detroit and Memphis that have been vacant for decades. This would likely result in an even worse scenario (in my opinion) of some of them being demolished so that our downtown would be a combination of skyscrapers surrounded by blocks of parking lots like so many large US cities. And I won't even get into the safety concerns a largely derelict downtown would bring. I see the conversions as an important investment, as are the Event Centre, Glenbow, Central Library and Arts Commons, in shaping the future of downtown. Getting downtown to thrive again (which seems to be slowly happening) is a public good, IMO.

Memphis' tallest building is being renovated into mixed use space after sitting vacant a long time. Here's what the mayor of Memphis said about that project and the difficulties in executing it:

“It’s very difficult to make a project like this work. It’s much, much easier to tear this building down and offer a vacant lot up for development and we would see a nice six or seven-story building come in its place,” said Memphis Mayor-Elect Paul Young. “You wouldn’t see a 37-story tower come in its place. So, I’m personally excited to see this history preserved in our city. This is what brings the character, the vibe to our city.”

 

[CalgaryTiger]

I thought that was the ENTIRE reason? As in, we are so reliant on downtown tax revenue, we needed to do this to stem the bleeding and try and recoup that tax loss. Was the $121ish million successful in doing so? How long until we recover that investment? If the answer is never, how is that a good thing?

The vitriol we hear directed at suburbs is because they are not financially viable for the most part, needing a big subsidy. But somehow subsidizing the downtown is considered fine, because vibes?

As you say, stop the bleeding. I have no idea what the financial details work out to be but a occupied building is better than vacant one. We make fun of cornerstone but look at the businesses that have opened up in its first floor, is that not worth something?

When you have so much invested in the downtown already, you need to take care of that investment by diversifying what you're investing in, not just places for people to go but places for people to live. The ROI on downtown investment is much higher than suburban investment.

Technically vibes is short for vibrant, so yeah vibes in the sense of people walking around, putting eyes on the street, and spending their money at downtown businesses.

 

[Albertasaurus]

Back in the day, when Boeing was looking to relocate its HQ from Seattle to somewhere more central in the USA, Oklahoma City made a strong effort to lure them. They offered generous incentives and the low cost of doing business in a pro-business red state. What ultimately lost them the HQ was their small, stagnant downtown, and Boeing went instead to Chicago (and later, metro DC). The result of that lesson was a lot of public investment that helped turn downtown OKC into a much more interesting place, which continues to this day with their ridiculous supertall proposal.

OKC's downtown is still tiny in comparison to ours, but it's hard to argue against the fact that they seem to have turned perceptions around. And our downtown had been bleeding office tenants, workers and retail space since around 2015-2016. Downtown is our city's showcase - having a healthy, thriving downtown is crucial to the regional economy, to ensuring our city continues to grow, and to building our tourism industry.

 

[JoeUrban]

With many of these conversions around 7th street this might lead to 'Downtown West' expanding a block to the east. Initially I expected this program to sprinkle residential in the core but it may instead just shrink the CDB.

 

[trtcttc]

I wonder if we will get to a point where new office towers will be needed because of the success of conversions like this. I know we have a long way yet to go, but hoping that we incrementally approach a balanced market. Selfishly I just want Calgary to get a supertall.

Our office vacancies vary widely between AA and the rest. The conversions mostly removing supply at the low end, where vacancies are 28-38%. The AA towers are only 13% vacant, which is still high. To get a new tower, that vacancy would need to drop but more likely from corporate relocation than conversion of class B/C buildings.

 

[darwink]

.

is a good thing

Not all good things deserve tax dollars.

 

[darwink]

public good from a "downtown revitalization" perspective

We could have used the same money for other revitalization purposes.

 

[darwink]

we needed to do this to stem the bleeding and try and recoup that tax loss

That is a hand wavy thing that was never demonstrated in modelling.

A thing needed to be done. This was a thing. So it was done.

 

[darwink]

How long until we recover that investment? If the answer is never, how is that a good thing?

The answer is never

 

[Golfing guy]

We could have used the same money for other revitalization purposes.

What other projects need to be done downtown? Glenbow Museum, Arts common, Olympic Plaza and Eau Clair plaza are all currently or will be currently major projects. Think the city does a good job in spreading the dollars around

 

[darwink]

What other projects need to be done downtown? Glenn’s Museum, Arts common, Olympic Plaza and Eau Clair plaza are all currently or will be currently major projects. Think the city does a good job in spreading the dollars around

I think projects which brought lots of people downtown which accrued secondary public benefits and where that $ per person added to downtown is as low as possible.

Apartments in that people added are less valuable than student residence and hotels.

Students spend lots of money at businesses and are out and about. Hotels very similar.

So what crosses over to secondary public benefits and the people downtown factor.

 

[CalgaryTiger]

I think projects which brought lots of people downtown which accrued secondary public benefits and where that $ per person added to downtown is as low as possible.

Apartments in that people added are less valuable than student residence and hotels.

Students spend lots of money at businesses and are out and about. Hotels very similar.

So what crosses over to secondary public benefits and the people downtown factor.

One of the conversions is to a hotel but I do see the point you're trying to make. Money could've been allocated elsewhere. Much like suburban sprawl gets subsidized so should this. The city can also do the basics and big projects, it can. People make jokes about the city and city workers but I think it is pretty well run. Although not perfect... Councillors can go off on some weird crusades (the takeaway plastics thing) but I'll take the problems we have versus other places.

 

[darwink]

It’s not the hugest problem. But when they’re talking about ultimately spending $500 million bucks+, I think they’re are better ways to do it that accomplish similar goals. Also cognizant that the east village infrastructure investment could be seen as a similar large subsidy and to let the project without sin cast the first stone.