At a glance Calgary’s downtown appears to be vibrant and thriving.
Huge modern buildings shine and tower while cranes are hard at work building even more. Traffic appears to be bustling until one realizes that this is more due to lane reductions from bicycle tracks and poor traffic light synchronization rather than a volume of commuters. Parking lots are expensive and bursting at the seams but then one realizes that this is due to a purposeful strangling of parking supply by the city of Calgary which led to Calgary being second only to New York city in parking costs throughout North America only a few years ago.
The reality is that Calgary’s downtown is languishing with near a whopping 30% vacancy rate!
People don’t see it but this is nearly catastrophic when measured against other major cities in North America. A 10% vacancy is considered high. 30% is unimaginable (except in Calgary).
Of course most of this is due to the crash in Alberta’s energy industry but there is a great deal more to this picture than that. Large companies were bailing out of Calgary’s downtown well before the most recent crash.
CP rail moved their headquarters out of the core in 2012 in a move that saved them an estimated $19 million per year.
Imperial Oil decided to move from downtown to Quarry Park in 2012.
The trend of companies leaving Calgary’s congested and expensive downtown has been going on for quite some years now. The energy crash only made the trend much more acute.
A friend of mine who was working in multiple buildings last spring shared some video with me of the spaces.
It’s almost eerie seeing these modern yet abandoned spaces. Some are portions of buildings, some are entire floors.
Some areas are gutted, some are partially renovated.
Some offices are still furnished.
Some even have packing boxes left behind almost as if folks were fleeing an impending disaster (I guess in a sense they were).
This urban catastrophe could actually be turned into an opportunity but Calgary city hall will need a complete change of attitude and ideology in order to take advantage of it.
We have all of this modern space within a city with an international airport. In the right conditions businesses could be flooding into the city.
To begin with, the city needs to court small to medium businesses to fill all of these gaps. It was almost embarrassing to see tossing their figurative panties at Amazon as they dove into a spiral to the bottom in whoring themselves in hopes of gaining a massive new entity. Logistically Calgary was never in the race for new headquarters. Why on earth would a company that specializes in shipping items stay on the same side of the continent as their current headquarters in an expansion? They needed an eastern location with modest labor costs. While Calgary only spent $600,000 and didn’t offer massive subsidies to draw Amazon, it still was utterly wasted money on an unrealistic dream.
The powers that be in Calgary city hall now want to piss away 10s of millions chasing an Olympic dream which may cost billions if we get it. Meanwhile Calgary’s downtown ghost town gathers dust.
Instead of chasing these whales that demand massive taxpayer subsidies, the city needs to look for those small to medium businesses that are flourishing within the modern economy. All these offices are virtually plug and play as some are even furnished.
As was written recently, Calgary’s business taxes are outright out of control.
It’s a competitive world. Businesses simply won’t move to a location where taxes are too high and Calgary’s are way too high. Sadly Mayor Nenshi and most of city council are obsessed with vanity projects such as the Olympics and ugly public art projects which consume tax dollars when they should be seeking ways to reduce spending in order to reduce taxes.
Unless Calgary reduces the business tax burden, Calgary’s downtown will keep its vast number of empty offices.
Calgary needs to drastically reduce the parking rates.
Parking costs downtown amount to another tax on businesses down there. Companies either have to spend to pay for their employees parking spaces or compensate their employees more in order to offset the cost for the employees.
This is due to an ideological push from Calgary city hall over the years to try and force people out of their cars and into public transit. The city owns the bulk of the parking spaces downtown which allows them to essentially set the baseline price. In keeping supplies of parking spaces down through regulation on new buildings and in taking spaces out for barely used bicycle tracks Calgary managed to get the grossly expensive parking rates that were highlighted earlier.
The effort failed. Calgarians still overwhelmingly choose to live in the suburbs and they choose to drive their personal vehicles to work. They won’t ride bikes or get on cramped sporadic buses. City hall needs to face reality and accommodate consumer demand by reducing parking costs downtown and adding more spaces as needed. Despite their rainbow and unicorn ideals professed, companies don’t choose headquarters based on the number of bike tracks. They look at the dollars spent and the comfort and convenience of their staff.
Next, the city of Calgary needs to massively reduce their regulatory burden on businesses. Just this week it was in the news how a local brew pub had to spend over $10,000 and wait 11 months just to get a tiny patio approved.
This is ridiculous but this is typical. Calgary city hall is massively bloated and massively over managed. Useless regulatory burdens cost businesses in the city untold millions in compliance. These regulations cost taxpayers millions in administration and staff that we simply don’t need. City hall needs a strong bureaucratic suppository to flush out the clingons which would allow for the tax cuts that businesses to desperately need.
Calgary is run by a tax and spend administration right now and we all are paying the price for it. Council and administration need a massive change of attitude which likely won’t happen for at least another 3 years.
Small business needs to be courted and embraced rather than seen as a tax cow to be milked and regulated.
Downtown Calgary needs to be seen as a place to do business in rather than being a giant pet project where a pipe dream of some sort of bike riding, pedestrian utopia is to be created with tax dollars despite the wishes of citizens.
Until all the above changes are made, the massive empty spaces sitting in downtown will remain as an opportunity lost.