August 17, 2021 | NAIOP Calgary
Downtown Calgary Development Incentive Program
A thriving downtown means a thriving Calgary. The success of our city relies on our downtown being a place where people want to live and be, and where businesses want to set up shop, now, and for decades to come. Downtown must transform toward a vision of a resilient and vibrant downtown for everyone, with welcoming neighbourhoods, active streets, and well-used public spaces.
Calgary, as a whole, benefits from a strong downtown, as it contributes to its economic success and The City’s revenues, tax base, and ability to provide services. The downtown is connected to the rest of the city and is not an island – what happens downtown has a direct impact on the rest of the city. We need to create a community that moves beyond the traditional office-based downtown central business district and instead is a dynamic, vibrant 24/7 centre of our city. We need to move forward and reinvent downtown for the future.
The City of Calgary is taking action to make Calgary’s downtown even more vibrant and address downtown office vacancy. Today, The City launched the Downtown Calgary Development Incentive Program to support downtown office conversions, office replacement, and new residential development.
An initial $45 million in program funding is available to downtown office building owners who are interested in converting office space to another use. The initial phase of the program will run from August to December 2021 and will focus on office to residential conversion, with a priority placed on the Downtown Core, which currently has the greatest level of office vacancy in the greater downtown.
Downtown office vacancy is at approximately 14 million square feet which translates into approximately 32.59 per cent (CBRE, Q2 2021). As downtown office vacancy rates continue to rise, the impacts are far-reaching. The status quo scenario is the biggest risk to downtown vibrancy, Calgary’s economic competitiveness, and fiscal sustainability. Downtown office property values have declined by $16 billion since 2015, or 60 percent, resulting in the tax shift situation that affects City finances and residential, commercial, and industrial property taxes throughout the city.
Approximately six million square feet of office space needs to be removed from the market through leasing, conversion, adaptive reuse, and/or demolition to help address downtown office vacancy and stabilize downtown office property values over the next decade. In order to start the process of office space removal, The City worked in collaboration with industry experts including Calgary Economic Development’s (CED) Real Estate Sector Advisory Committee (RESAC) and the Real Estate Working Group (REWG) to develop the Downtown Calgary Development Incentive Program.
Property owners within the Greater Downtown Plan area (Downtown Core, Eau Claire, Chinatown, Downtown West, East Village, the Beltline) can apply for funding between August 16 and September 15, 2021. A priority will be placed on properties within the Downtown Core. The program is offering a grant for office to residential conversions of $75 per square foot, based on the original gross building area of existing office space that will be converted. The grant will be up to a maximum of $10 million per property unless City Council approves a greater amount for a particular application.
Further information about the program can be found at calgary.ca/downtownincentives.
The Downtown Calgary Development Incentive Program is a component of The City’s investment in actioning Calgary’s Greater Downtown Plan – our downtown’s roadmap to reinvention. The initial investment is earmarked for actions that will address office vacancy, improve downtown vibrancy, and support the development of thriving neighbourhoods. Learn more about Calgary’s Greater Downtown Plan and downtown investment package at calgary.ca/greaterdowntownplan.
Program Lead, Downtown Strategy